Breakfast | Alibaba surged 8% to a new high, leading a major rebound in Chinese concept stocks!

Market Overview

Tech stocks continue to drag down, the three major U.S. stock indices fell for two consecutive days, Oracle fell nearly 2%, and both Nvidia and the chip index also experienced two consecutive declines, but Intel rose over 6%, and Tesla rebounded nearly 4%. Chinese concept stocks rebounded significantly, with the Chinese concept index rising nearly 3%, reversing four consecutive declines, Alibaba closed up over 8%, reaching a nearly four-year high, and JD.com rose nearly 6%.

U.S. Treasury yields fell, approaching a two-week high. The U.S. dollar index rebounded to a nearly two-week high; the offshore yuan recorded its largest decline in nearly two months, falling below 7.14 for the first time in over two weeks during intraday trading; Bitcoin rebounded nearly $3,000 after dropping below the 112,000 mark during intraday trading.

London copper rose over 3% to a new high in over a year. New York copper closed at a nearly two-month high, rising over 4% during intraday trading. Gold fell from record highs, with futures gold dropping nearly 2% at one point. Supply concerns intensified, with crude oil rising over 2% during intraday trading for two consecutive days, and Brent crude closed at a new high in over seven weeks.

During the Asian session, on the anniversary of "924", AH shares surged, with the ChiNext index rising over 2%, and a surge in semiconductor stocks, with SMIC reaching a historical high, the Hang Seng index rising over 2%, and Alibaba's Hong Kong stock soaring over 9%.

Key News

Chinese President delivered a video speech at the UN Climate Change Summit, announcing a new round of national contributions from China, aiming for a 7%-10% reduction in net greenhouse gas emissions from peak levels by 2035, and striving to reach a total installed capacity of 360 million kilowatts for wind and solar power generation.

Li Qiang met with European Commission President Ursula von der Leyen.

Minister of Commerce Wang Wentao held a roundtable meeting with some Chinese-funded enterprises in the U.S.

The U.S. officially announced the implementation of the U.S.-EU trade agreement, reducing tariffs on EU automobiles to 15% starting August 1.

Bessenet: does not understand why Powell is "backing down", urging a rate cut of 100-150 basis points before the end of the year, and is interviewing 11 candidates for the Federal Reserve Chair; the U.S. Treasury is preparing to buy Argentine dollar bonds, and is discussing a $20 billion currency swap limit.

Alibaba 2025 Cloud Summit: will add capital expenditures on top of the 380 billion yuan, and has reached a physical AI cooperation with Nvidia.

Reports: Intel is seeking investment from Apple to help turn around its difficulties, with its stock price surging 8% during intraday trading.

OpenAI is facing challenges: Microsoft's 365 Copilot commercial customers can now use the Anthropic model for the first time.

SAP and OpenAI announced a partnership, planning to launch a "German version of OpenAI".

New York copper surged over 4% during intraday trading, as the world's second-largest copper mine, Grasberg, faced a mining disaster and production halt, with copper and gold output expected to plummet by 35% by 2026.

Saudi Arabia's stock market surged 5% in a single day, with foreign ownership restrictions possibly being relaxed

Market Report

US and European Stock Markets: The S&P 500 index fell by 0.28%, closing at 6,637.97 points. The Dow Jones Industrial Average dropped by 0.37%, closing at 46,121.28 points. The Nasdaq Composite decreased by 0.34%, closing at 22,497.855 points. The European STOXX 600 index fell by 0.19%, closing at 553.88 points.

A-shares: The Shanghai Composite Index rose by 0.83%, closing at 3,853.64 points. The Shenzhen Component Index increased by 1.8%, closing at 13,356.14 points. The ChiNext Index rose by 2.28%, closing at 3,185.57 points.

Bond Market: By the end of the bond market, the yield on the US ten-year benchmark Treasury bond was about 4.15%, up about 4 basis points during the day; the yield on the two-year Treasury bond was about 3.60%, up about 1 basis point during the day.

Commodities: WTI November crude oil futures rose by 2.49%, closing at $64.99 per barrel. Brent November crude oil futures increased by 2.48%, closing at $69.31 per barrel. COMEX December gold futures fell by 1.25%, closing at $3,768.1 per ounce. London copper rose by 3.63%, closing at $10,336 per ton. COMEX December copper futures rose by 3.65%, closing at $4.8135 per pound.

News Details

Global Highlights

Chinese President delivers video address at the UN Climate Change Summit, announcing a new round of national contributions from China. By 2035, China's net greenhouse gas emissions across the entire economy are expected to decrease by 7% to 10% from peak levels, with efforts to do better. The proportion of non-fossil energy consumption in total energy consumption will reach over 30%, and the total installed capacity of wind and solar power generation will exceed six times that of 2020, aiming for 3.6 billion kilowatts. The forest stock will exceed 24 billion cubic meters, and new energy vehicles will become the mainstream of new vehicle sales. The national carbon emissions trading market will cover major high-emission industries, and a climate-adaptive society will be basically established.

Li Qiang meets with European Commission President Ursula von der Leyen. Li Qiang expressed hope that the EU would fulfill its commitment to keep trade and investment markets open, adhere to fair competition and WTO rules, and avoid politicizing and securitizing economic and trade issues. Von der Leyen stated that the EU is willing to actively implement the consensus reached at this year's China-EU leaders' meeting with China, properly resolve differences through dialogue and consultation, achieve new cooperation results in trade investment, environmental protection, and development assistance, and deepen cooperation in the field of climate change to promote each other's green transformation and jointly advance global sustainable development Minister of Commerce Wang Wentao Holds Roundtable Meeting with Some Chinese Enterprises in the U.S.. On September 23, Minister of Commerce Wang Wentao held a roundtable meeting with some Chinese enterprises in the U.S. in New York. Representatives from over ten Chinese enterprises in the U.S. across sectors such as finance, logistics, cross-border e-commerce, petrochemicals, telecommunications, rail transit, auto parts, new energy, and pharmaceuticals attended the meeting to introduce their business situations in the U.S. and put forward specific demands and suggestions regarding the protection of corporate interests and the expansion of practical cooperation.

The U.S. Officially Announces: Implementing the U.S.-EU Trade Agreement, Tariffs on EU Cars to be Reduced to 15% Starting August 1. The European stock automotive sector briefly erased an earlier 1.7% decline, slightly turning positive, but ultimately closed down about 0.6%. According to CCTV News, on the 24th local time, the Trump administration in the U.S. issued an official announcement implementing the trade agreement reached with the European Union, confirming that starting August 1, a 15% tariff will be imposed on imported cars and automotive products from the EU. The document also listed tariff exemptions for certain pharmaceutical compounds, aircraft parts, and other imported goods.

Beisent: Does Not Understand Why Powell "Backed Down," Urges for a 100-150 Basis Point Rate Cut by Year-End, Currently Interviewing 11 Candidates for Federal Reserve Chair. Beisent stated on Wednesday that they are looking for an open-minded person to serve as the Federal Reserve Chair. The current interest rates are "too restrictive and need to be lowered." They expressed "some surprise" that Powell failed to signal at least a 100 to 150 basis point rate cut by year-end.

Beisent: U.S. Treasury Prepares to Buy Argentine Dollar Bonds, Discussing $20 Billion Currency Swap Line. Beisent referred to U.S. assistance as a "bridge" to Argentina's crucial mid-term elections, stating that market fluctuations will not hinder Milei from implementing significant economic reforms. Media reports on Wednesday indicated that Argentina's central bank significantly lowered the one-day repo rate for the peso by 10 percentage points to 25%. This move curbed the peso's rise, which had previously increased by 2.7% during the day but later rose by less than 1%.

Alibaba 2025 Yunqi Conference: Will Increase Capital Expenditure on Top of 380 Billion Yuan, Forming Physical AI Partnership with NVIDIA. Alibaba Cloud's artificial intelligence platform PAI will integrate NVIDIA's Physical AI software stack, providing enterprise users with full-link platform services such as data preprocessing, simulation data generation, model training evaluation, robot reinforcement learning, and simulation testing. Alibaba CEO Eddie Wu stated that large models are the next-generation operating systems, AI Cloud is the next-generation computer, and in the future, there may only be 5-6 super cloud computing platforms worldwide By 2032, the energy consumption scale of Alibaba Cloud's global data centers will increase tenfold. This means that Alibaba Cloud's computing power investment will grow exponentially. The company's stock price has continued to rise, increasing by over 9%.

Report: Intel seeks investment from Apple to help turn around its predicament, stock price surged 8% during trading. The two companies are also discussing the possibility of strengthening cooperation, but negotiations are still in the early stages and may not result in an agreement.

OpenAI under pressure: Microsoft 365 Copilot commercial customers can now use Anthropic models for the first time. Starting this Wednesday, Microsoft 365 Copilot's Researcher agent and Copilot Studio platform will add options for the Claude Sonnet 4 and Claude Opus 4.1 models, allowing users to switch flexibly between OpenAI models and these models. The president of Copilot stated that the Anthropic models will bring a "more powerful experience" to 365 Copilot.

SAP and OpenAI announce collaboration, planning to launch the "German version of OpenAI". The "German version of OpenAI" project involves clear division of labor among three tech giants: SAP is responsible for providing enterprise application expertise and sovereign cloud infrastructure, OpenAI contributes leading AI technology, and Microsoft provides technical support for Delos Cloud through the Azure platform. Currently, SAP offers sovereign cloud services in ten regions, including the United States and Europe, and has allocated €20 billion to support the global promotion of sovereign cloud products.

Copper prices surged over 4% during trading, the world's second-largest copper mine Grasberg faces a mining accident and production halt, expected copper-gold output to plummet by 35% in 2026. Freeport expects to restore production levels to pre-accident levels no earlier than 2027, with copper-gold output in 2026 expected to decline by about 35% from previous estimates. Driven by expectations of supply disruptions, the stock prices of copper companies such as Glencore and Boliden have risen.

Saudi stock market surged 5% in a single day, foreign investment holding limits may be relaxed. Reports indicate that Saudi Arabia will relax the holding limits for foreign investors. If the policy is implemented, it is expected to attract hundreds of billions of dollars in new investment and increase the weight of the Saudi market in global capital indices. Boosted by this news, the Saudi Tadawul All Share Index surged 5% at one point, with a market capitalization increase of $123 billion, particularly strong performance in the financial sector, especially bank stocks

Domestic Macro

Support for service exports, 9 departments release 13 policy measures. According to CCTV News, support will be provided for the establishment of international data centers and cloud computing centers in free trade pilot zones, Hainan Free Trade Port, and national comprehensive pilot demonstration areas for the expansion of the service industry, offering data processing services to various enterprises in need.

New regulations for food delivery are here, standardizing platform fees and merchant onboarding, with Meituan and JD stocks rising together. The State Administration for Market Regulation has released the "Basic Requirements for Service Management of Food Delivery Platforms (Draft for Comments)," which clearly limits the fee items that food delivery platforms can charge merchants and prohibits arbitrary new fee items. The new regulations detail platform fees in terms of publicity methods, content, settlement details, and promotional effects to prevent opaque charging practices.

Nuclear fusion "national team" will build a high-temperature superconducting fusion device in Shanghai, named "Circulation No. 4". According to The Paper, at the 25th China International Industry Fair being held in Shanghai, China Fusion Energy Co., Ltd., which has a registered capital of 15 billion yuan and was officially established just over two months ago, made its first public appearance, showcasing its technological route and business layout. It is reported that according to the general rules of nuclear energy development from experimental reactors to demonstration reactors to commercial reactors, the company aims for a commercial fusion energy target by 2050, with research and development coordinated in Shanghai and Chengdu.

Domestic Companies

"China's version of Nvidia" will be reviewed on Friday, A-share related stocks have surged: multiple stocks hit the limit up, Heertai has 3 boards in 4 days. Moore Threads' IPO on the Sci-Tech Innovation Board will be reviewed on September 26. This GPU chip company, dubbed "China's version of Nvidia," plans to raise 8 billion yuan. Affected by this news, related concept stocks in A-shares surged, with directly invested Heertai recording 3 boards in 4 days, and several indirectly held companies like Lianmei Holdings also hitting the limit up. However, most related companies have very low shareholding ratios and limited business connections, posing a high risk of irrational market speculation.

YuTree Technology's Wang Xingxing: The differences in general robot technology routes are greatly restricting the speed of development. Although the general robotics industry is currently gaining popularity, Wang Xingxing believes that the robot industry is still in the "pre-dawn" stage, with the biggest challenge being the "significant differences in technology routes" among various companies, which restricts the overall progress of the industry. This is reflected in the robotics industry having "monthly breakthroughs but lacking immediate major breakthroughs." Wang Xingxing advocates for "promoting collaboration with an open attitude" to break this deadlock After the "anti-involution" wave, Morgan Stanley: The Chinese wind power industry has entered a profit recovery cycle. Morgan Stanley believes that after nearly three years of a downward cycle, the Chinese wind power value chain has successfully achieved anti-involution through industry self-discipline, realizing a turnaround in prices and overall profitability by early 2025. It is expected that during the "14th Five-Year Plan" period, the average annual new installed capacity will exceed 110GW, reaching about 120GW during the 2028-2030 period.

Overseas Macro

US new home sales surged in August, significantly exceeding expectations, the highest since early 2022. US new home sales in August were annualized at 800,000 units, significantly higher than the expected 650,000 units, with the previous value at 652,000 units; new home sales in August increased by 20.5% month-on-month, while the expectation was a month-on-month decline of 0.3%, and the previous value was a month-on-month decline of 0.6%. The surge in demand has significantly absorbed the large inventory of new homes in the market. The increase in new home sales is attributed to substantial price cuts and sales incentives from home builders, as well as a decline in mortgage rates.

"Crash expert" Black Swan Fund: US stocks will rise sharply, followed by a "1929-style crash". Mark Spitznagel, manager of the US "Black Swan" fund, predicts that US stocks will repeat the rise seen in early 1929, with the S&P 500 index potentially reaching 8,000 points "quite quickly," indicating about a 20% upside from current levels. However, he warns that this rally will be a prelude to disaster, potentially leading to the most severe crash since 1929.

Nomura: Continue to enjoy the AI bull market, but warns not to abandon hedging now. Nomura warns that the foundation of the AI-driven US stock bull market is solid and supported by multiple favorable factors, but the market has accumulated significant downside risks. Current investors are overly bullish, with a surge in call option demand in the options market, and the "circular investment" model among tech giants is concerning. Nomura warns that the market is in an extreme net long and negative gamma state, and once a catalyst occurs, it may trigger a rapid and severe correction due to deleveraging.

Overseas Companies

There is too much money, NVIDIA has nowhere to invest, instead of buybacks, it is better to choose "to close the AI loop". With mergers and acquisitions nearly impossible and buybacks and R&D unable to absorb the "excess money," NVIDIA is attempting a brand new way of capital utilization by investing money in customers, partners, and even competitors to create a self-circulating "AI closed-loop ecosystem," thereby locking in long-term demand for future chips

• Wall Street is hotly discussing the "AI closed loop": Bulls say "suppress ASIC, Nvidia has a long bull market," while bears say "loan to customers, just like Cisco back in the day". Nvidia plans to invest $100 billion in OpenAI, which will "use this money" to buy Nvidia's chips. This model of "giving money to customers, who then buy their own products" has raised concerns on Wall Street about a potential replay of the internet bubble, "loaning to customers, just like Cisco back in the day." However, bulls believe this is Nvidia's strategic move to consolidate its dominance in the GPU market and suppress ASIC competition.

Oracle's AI expansion ambition: issuing $18 billion in bonds, becoming the second-largest financing in the bond market this year. Oracle successfully completed an issuance of $18 billion in investment-grade bonds, with peak subscription demand nearing $88 billion. This bond issuance includes a rare 40-year bond, with a final yield 1.37 percentage points higher than that of U.S. Treasuries during the same period. The financing is primarily for AI infrastructure construction, and to support expansion, the company's cash flow has turned negative for the first time since 1992, with rising debt levels. The timing of the financing coincides with the replacement of CEO Safra Catz, raising market concerns about future financial strategies.

• In-depth analysis of Oracle's "growth model". Morgan Stanley stated that Oracle is transforming from a traditional software giant to a GPU data center operator, expecting that by fiscal year 2030, its AI-related business will contribute 60% of total revenue, with OCI revenue increasing from approximately $18 billion to $144 billion. However, this high-growth model comes with capital expenditures as high as $405 billion and rising debt, which will also erode the company's overall profit margin due to the low margins of AI business.

The fate of the "capital expenditure bull market"—the rise and fall of the stock market during the canal, railway, and telecommunications technology revolutions. Tech giants like Microsoft and Google are engaged in an unprecedented AI capital expenditure race. Deutsche Bank warns that historically, capital expenditure booms driven by technological revolutions, such as the canals of the 18th century, railways of the 19th century, and telecommunications in 2000, ultimately evolved into cycles of "boom-bust," leading to the bursting of related stock bubbles and significant losses for investors. "Since the bursting of the 2000 telecommunications bubble, it has yet to return to the highs of that year."

• Who will foot the bill for the "AI capital frenzy"? In the next three years, Silicon Valley will contribute $14 trillion, while Wall Street will raise $12 trillion. Morgan Stanley predicts that by 2028, investments in AI data centers and chips will reach $29 trillion, with tech giants bearing about $14 trillion of that. The remaining gap is expected to be filled through debt financing, amounting to $12 trillion, with private credit funds expected to provide $8 trillion of that After Goldman Sachs, UBS follows suit, and Wall Street competes to raise Tesla's third-quarter delivery expectations. UBS has raised its Tesla third-quarter delivery forecast to 475,000 units, above market consensus, driven by strong deliveries in the U.S. market due to the expiration of tax incentives under the Inflation Reduction Act, as well as solid performance in Europe and China. Nevertheless, UBS maintains a "sell" rating, expecting a quarter-on-quarter decline in fourth-quarter deliveries, and notes that Tesla's stock price is currently driven more by AI themes rather than the fundamentals of its automotive business.

Today's News Preview

Alibaba 2025 Cloud Habitat Conference.

Xiaomi 17 series launch event. Lei Jun's annual speech "Change."

U.S. Q2 real GDP, core Personal Consumption Expenditures (PCE) price index annualized quarter-on-quarter final value.

U.S. initial jobless claims for last week.

U.S. August goods trade balance.

U.S. August existing home sales.

U.S. August durable goods orders.

Speeches by New York Fed President Williams, Fed Governor Bowman, Fed Governor Barr, Chicago Fed President Goolsbee, Kansas Fed President George, Dallas Fed President Logan, and San Francisco Fed President Daly.

Costco announces financial results