Morning News

**Source**: Wall Street Insights

**Market Overview**

The unexpectedly strong US PPI dampened rate - cut expectations, causing the rally in US stocks to fade. The Nasdaq and Dow Jones Industrial Average slightly declined, while the S&P 500 slightly rose and barely reached a new high. Bullish, a popular stock in the cryptocurrency circle, rose nearly 10% on the second day of its listing. Coreweave plunged again, closing down more than 15%. Intel soared more than 7%. After the market, UnitedHealth and Nucor Steel rose more than 9% and 8% respectively.

The China - stock index dropped more than 2%. After releasing its earnings, Weibo rose 11%, but JD.com fell nearly 3%, and Tencent's stock price dropped 3% on the second day after releasing its financial report.

After the US PPI was released, the yield on the two - year US Treasury bond, which had hit a new low in more than a week, turned up. The US dollar rebounded, accelerating its departure from a two - week low. After the US Treasury Secretary called on Japan to raise interest rates, the Japanese yen reached a three - week high, but then turned down after the US PPI was released.

Bitcoin rose above $124,000 to a new high, but then dropped more than $7,000 at one point. Gold fell to a nearly two - week low, and gold futures once fell nearly 1%. Before the "Trump - Putin meeting", US oil rose more than 2% at one point.

During the Asian session, stocks, bonds and commodities all fell. The Shanghai Composite Index ended its eight - consecutive - day winning streak, the ChiNext Index fell more than 1%, Cambricon Technology approached the 1,000 - yuan mark, the Hang Seng Tech Index fell 1%, and Internet stocks generally declined.

**Important News**

US inflation "exploded", with the July PPI soaring to 0.9% month - on - month, a three - year high, and rising to 3.3% year - on - year.

Bessent "clarified" that he was not calling for a rate cut, but only discussing the neutral interest rate model. Federal Reserve voter Musalem said it was too early to decide whether to support a rate cut next month, pouring cold water on a 50 - basis - point rate cut. Federal Reserve voter Goolsbee poured cold water on the September rate - cut expectations, saying not to be hasty. Federal Reserve's Daly said a large - scale rate cut in September was not necessary. Two newly - proposed candidates for the Federal Reserve chairmanship supported large - scale rate cuts despite the higher - than - expected PPI.

Bessent said the Bank of Japan was clearly "moving too slowly" and should raise interest rates.

The usage volume of the Federal Reserve's reverse - repurchase tool hit a new low since 2021.

As the "Trump - Putin meeting"倒计时, Trump expected a 25% probability of failure. The US temporarily exempted some sanctions, and the White House threatened that it had many tools at its disposal.

JD.com's Q2 revenue increased 22.4% year - on - year, exceeding expectations. The revenue of new businesses driven by food delivery soared 198.8%, but dragged down overall profitability. In the conference call, it was stated that core retailing grew steadily, and the long - term strategy of "quality food delivery" was reaffirmed, focusing on user experience instead of engaging in price wars.

NetEase's Q2 revenue increased 9.4% year - on - year, falling short of expectations, and net profit increased 12.5% year - on - year, with the growth of the game business slowing down.

The Trump administration discussed state ownership of Intel, and Intel's stock price once soared nearly 9%.

Buffett resumed selling Apple in Q2, further reduced his stake in Bank of America, and newly bought UnitedHealth. The "mysterious" holdings were revealed: real - estate stocks DR Horton and Lennar, plus Nucor Steel.

Goldman Sachs heavily bet on technology stocks in the second quarter, taking large positions in Nvidia, Microsoft, S&P 500 ETF, Apple, and Meta.

**Market Closing Report**

European and US stocks: The S&P 500 Index rose 0.03%, closing at 6,468.54 points. The Dow Jones Industrial Average fell 0.02%, closing at 44,911.26 points. The Nasdaq Composite Index fell 0.01%, closing at 21,710.67 points. The European STOXX 600 Index closed up 0.55%, at 553.87 points.

A - shares: The Shanghai Composite Index fell 0.46%, closing at 3,666.44 points. The Shenzhen Component Index fell 0.87%, closing at 11,451.43 points. The ChiNext Index fell 1.08%, closing at 2,469.66 points.

Bond market: The yield on the 10 - year US Treasury bond rose 5.23 basis points, to 4.2849%. The yield on the two - year US Treasury bond rose 5.79 basis points, to 3.7324%.

Commodities: WTI September crude oil futures closed up 2.09%, at $63.96 per barrel. Brent October crude oil futures closed up 1.84%, at $66.84 per barrel. COMEX gold futures fell 0.77%, to $3,382.00 per ounce.

**Details of Key News**  

**Global Highlights**  

US inflation "surges beyond expectations": July PPI soars 0.9% month-on-month to a three-year high, with year-on-year growth rising to 3.3%. The year-on-year increase in US July PPI jumped from 2.3% in the previous month to 3.3%, the highest level since February this year, and far exceeding the expected 2.5%. The month-on-month increase of 0.9% in US July PPI was the largest since June 2022. After the data was released, traders reduced their bets on the Federal Reserve cutting interest rates in September.  

Bessent "clarifies": Not calling for rate cuts, only discussing the neutral interest rate model. Bessent stated, "I am not telling the Federal Reserve what to do," attempting to downplay his remarks on Wednesday that the Federal Reserve "may enter a series of rate-cutting cycles." He emphasized that he only mentioned that "the neutral interest rate model suggests it should be about 150 basis points lower than the current level."  

Fed voter Musalem: Too early to judge whether to support a rate cut next month, pouring cold water on a 50-basis-point cut. St. Louis Fed President Musalem said it is too early to determine whether he will support a rate cut at next month's meeting. When asked about the possibility of a 50-basis-point rate cut next month, he stated that it does not align with current economic conditions and prospects.  

Fed voter Goolsbee cools expectations for a September rate cut: Do not rush. Chicago Fed President Goolsbee noted that the Federal Reserve may face a "difficult period" in pushing inflation back to the 2% target. He emphasized that the central bank should not process information as quickly as the market, implying a need for a more cautious policy path.  

Fed's Daly: No need for a large rate cut in September. Daly said a 50-basis-point rate cut "sounds like we are seeing an emergency," but she is not worried about the labor market and does not believe a catch-up rate cut is necessary. She supports a gradual adjustment to a more neutral policy stance over "the next year or so."  

Despite the higher-than-expected PPI, two new candidates for Fed Chair support significant rate cuts. Economist Sumerlin, who served as Deputy Director of the US National Economic Council during the George W. Bush administration, believes aggressive rate cuts are appropriate, with a 50-basis-point cut feasible, while emphasizing the importance of Federal Reserve independence. David Zervos, Chief Market Strategist at Jefferies and another candidate for Fed Chair, also stated on the same day that he supports significant rate cuts, regardless of the higher-than-expected US PPI data.  

Bessent: Bank of Japan is clearly "acting too slowly" and should raise interest rates. Bessent argued that the Bank of Japan needs to "control the inflation problem" and therefore "raise interest rates." As Japan's ultra-long-term government bond yields soar, the "spillover" effect is dragging down US long-term Treasury bonds. According to Bloomberg statistics, about 42% of economists expect the Bank of Japan to raise rates in October, and another third expect action in January next year.  

Usage of the Federal Reserve's reverse repo tool hits a new low since 2021. The usage of the Federal Reserve's overnight reverse repurchase agreement (RRP) stood at $28.818 billion, the lowest since April 2021, compared with $57.202 billion the previous trading day. Citi strategists predict that RRP usage may approach zero by the end of August. Wall Street is closely monitoring potential signs of funding market stress, as once the reverse repo tool balance nears depletion, funds will start flowing out of bank reserve balances.  

Countdown to the "Trump-Putin meeting": Trump estimates a 25% probability of failure; US temporarily exempts some sanctions; White House threatens to have many tools.  

Trump stated that he believes Putin is convinced to reach an agreement; the "Trump-Putin meeting" will lay the groundwork for a second summit, which is more important and focused on reaching an agreement; Putin and Zelensky can get along harmoniously; if the meeting results are good, he will call European leaders and Zelensky to promote a US-Russia-Ukraine trilateral talks, with three potential venues considered; if not, he will not call and return home directly; if the issue remains unresolved, additional sanctions will be imposed on Russia.  

The White House said Trump has many tools available if necessary, although diplomatic negotiations remain the preferred option. The US temporarily exempted transactions needed to prepare for the "Trump-Putin meeting."  

Putin said the US has made "active and sincere" efforts to end the Ukraine crisis. Russia does not expect any documents to be signed after the meeting.  

Media reports that the Kremlin's economic envoy will attend, suggesting the "Trump-Putin meeting" will discuss potential economic deals.  

JD.com's Q2 revenue rises 22.4% year-on-year, exceeding expectations; new business revenue driven by food delivery surges 198.8% but drags down overall profits. Conference call: Core retail grows steadily; reaffirms long-term strategy of "quality food delivery," focusing on user experience instead of price wars.  

JD.com's Q2 revenue reached 356.7 billion yuan, up 22.4% year-on-year, but net profit declined significantly. Revenue from new businesses soared 198.8% year-on-year, mainly driven by JD Food Delivery. However, the operating loss of this segment expanded sharply from 700 million yuan in the same period last year to 14.8 billion yuan, with an operating profit margin of -106.7%, becoming the main drag on the group's overall profits.  

During the conference call, management reaffirmed its commitment to investing in new businesses such as food delivery and instant retail. The company focuses on "quality food delivery," does not engage in price wars, and revealed that new businesses have formed a synergistic effect with core retail operations. Although new businesses may affect profit margins in the short term, they will bring greater growth potential in the long run. Meanwhile, JD.com's core retail business showed strong resilience, international business advanced steadily, and shareholder returns continued.  

NetEase's Q2 revenue rises 9.4% year-on-year, below expectations; net profit up 12.5% year-on-year; game business growth slows. As NetEase's core engine, game and related value-added services generated 22.8 billion yuan in net revenue in Q2, up 13.7% year-on-year but below market expectations. Non-game businesses showed obvious divergence: NetEase Cloud Music's net revenue this quarter was 2 billion yuan, down 3.5% year-on-year; revenue from innovation and other businesses was 1.7 billion yuan, plummeting 17.8% year-on-year, mainly affected by declines in revenue from NetEase Yanxuan and advertising services.  

Trump administration discusses state ownership of Intel; Intel's stock surges nearly 9% at one point. Media reports that the Trump administration is negotiating with Intel for the US government to invest in and support the company's domestic chip manufacturing projects, promoting the stalled Ohio factory plan. The news pushed Intel's stock price up nearly 9% at one point on Thursday, with a further 3.6% rise after hours. Analysts said this move may help improve Intel's finances and implies that CEO Pat Gelsinger will remain in office.  

**13F Filings**  

Buffett resumes selling Apple in Q2, further reduces Bank of America stake, adds UnitedHealth; "mysterious" holdings revealed: real estate stocks DR Horton and Lennar, plus Nucor Steel. Berkshire reduced its Apple stake again after six months, cutting 20 million shares in Q2, reducing the market value of its holdings by $4.1 billion; Apple remains the top holding. It cut its Bank of America stake by over 26 million shares in Q2, with a more than 40% reduction in holdings over the past year. It liquidated T-Mobile during the quarter, added over 5 million shares of UnitedHealth, with a market value of nearly $1.6 billion by the end of the quarter, and the stock price rose over 9% after hours. It also added Nucor Steel and real estate stock Lennar, with market values exceeding $800 million and nearly $800 million respectively. Among the top 10 holdings, only Chevron was increased in Q2, with over 3.4 million shares bought.  

Goldman Sachs goes all-in on tech stocks in Q2, with heavy positions in Nvidia, Microsoft, S&P 500 ETF, Apple, and Meta. Goldman Sachs Group increased holdings of Nvidia, Microsoft, Tesla, Broadcom, and Meta in Q2. Currently, Nvidia is Goldman Sachs' largest holding, accounting for 4.1% of disclosed positions.  

**Domestic Macroeconomy**  

Wang Yi: Willing to expand cooperation with Vietnam in emerging fields such as artificial intelligence, digital economy, and commercial aircraft. According to the Ministry of Foreign Affairs website, Wang Yi said that China and Vietnam have close economic and trade ties, and both sides should jointly oppose unilateralism and protectionism, and safeguard free trade rules and the international trading system. China supports Vietnam in building an independent economic system, encourages Chinese enterprises to invest in Vietnam, and is willing to expand cooperation with Vietnam in emerging fields such as artificial intelligence, digital economy, and commercial aircraft. It will facilitate Vietnam's agricultural product exports to China and the establishment of trade promotion agencies in China, and hopes Vietnam will provide a sound business environment for Chinese enterprises. Both sides should continue to successfully host events marking the 75th anniversary of diplomatic relations and the "China-Vietnam People-to-People Exchange Year," as well as Vietnamese youth "red study tours" to China, to deeply root the friendship between the two countries in the hearts of the people.  

Banking industry "anti-involution" targets mortgage rebates! According to China Securities Journal, recently, financial regulatory bureaus and banking associations in Shanghai, Guangdong, Zhejiang, Anhui and other regions have proposed "anti-involution" measures, targeting industry practices such as "mortgage rebates, car loan commissions, and disguised interest subsidies." They call on local banks to break away from low-level price wars, abandon "losing money to attract customers," and adopt differentiated competition strategies to promote the sustainable and healthy development of the banking industry.  

CICC: Gradually entering a fiscal-led era, layout global liquidity-driven markets. CICC believes that the impact of US policy shocks is gradually weakening, and the economy is expected to return to the recovery track. Fiscal dominance combined with monetary coordination will become a long-term trend, and abundant US dollar liquidity will drive global stock markets to "blossom in multiple areas." Under expectations of a weaker US dollar, a large amount of pending foreign exchange settlement funds returning is expected to push the RMB higher. A weak US dollar cycle benefits emerging markets, with Hong Kong stocks benefiting more significantly. The current environment of "low interest rates, stable growth, and new industries" favors growth-style stocks, and exchange rate appreciation also supports growth sectors in A-shares and Hong Kong stocks.  

Are residents rushing into the market? The team of Cao Liulong from Western Securities believes that current market entrants are mainly high-net-worth investors, including private equity, leveraged funds, and hot money, with margin trading balances exceeding 2 trillion yuan, a new high. Resident funds have neither entered the market indirectly through public funds (new fund issuance remains low, and stock ETFs continue to see outflows) nor directly through large-scale stock trading (retail participation, capital inflows, and bank-securities transfers are all flat). Driven by abundant funds and asset shortage, resident funds are flowing into bank wealth management products to seek higher returns.  

**Domestic Companies**  

What is the biggest highlight of Tencent's Q2 earnings report? Goldman Sachs: AI empowerment potential and advertising growth space. Goldman Sachs believes that the strong Q2 results once again confirm that Tencent is one of the Chinese internet companies that can benefit the most from AI applications. Goldman Sachs analysis shows that AI technology is fully empowering Tencent's various business lines, including games, advertising, fintech, cloud services, and e-commerce. Among them, games and marketing services have maintained year-on-year growth of over 20% for two consecutive quarters. Based on this, Goldman Sachs raised Tencent's 2025-2027 revenue and earnings per share forecasts by 1-6%, and the target price from HK$658 to HK$701.  

Ten details and incremental information about the advertising segment in Tencent's earnings report. Tencent's Q2 advertising business achieved strong growth driven by AI technology, with revenue increasing 20% year-on-year. Video account advertising performed particularly prominently, with revenue growing over 50%, becoming the core driver. Management revealed that the current advertising load rate is far lower than that of peers, and coupled with the deepening application of AI technology, it indicates that the business still has huge growth potential and commercialization space in the future.  

Citi raises TSMC's CoWoS capacity forecast: Sustained high AI demand; Nvidia's iterations and cloud vendors' ASICs are key drivers. Citi raised its capacity forecast for TSMC's CoWoS advanced packaging technology from 800,000 units in 2026 to 870,000 units. Nvidia's order prospects are promising, and its wafer revenue at TSMC is expected to grow by more than 50% year-on-year in 2026. The ASIC development plans actively promoted by cloud service providers (CSPs) will become the second engine driving TSMC's steady growth.  

Supported by AI demand, Hon Hai's Q2 net profit surges 27% year-on-year; forecasts Q3 AI server revenue to grow 170%. Hon Hai's Q2 revenue was NT$1.79 trillion, in line with market expectations, up 16% year-on-year. Among them, revenue from cloud and network businesses (including AI servers) exceeded that from smart consumer electronics for the first time. Net profit was NT$44.36 billion, up 27% year-on-year. The company expects Q3 AI server revenue to soar over 170% year-on-year, driving significant year-on-year growth in overall revenue.  

Weibo's Q2 revenue rises 2% year-on-year; operating profit up 8%; monthly active users reach 588 million.  

China Telecom's first-half net profit rises 5.5% year-on-year; smart revenue up 89.4% year-on-year; proposes a dividend of 0.1812 yuan per share.  

**Overseas Macroeconomy**  

US initial jobless claims edge down last week; continuing claims remain at a 2021 high. In the week ending August 9, US initial jobless claims were 224,000, a slight decrease of 3,000, below expectations and the previous value, remaining at the lowest level since November 2021. Continuing claims fell to 1.953 million, slightly below expectations but still hovering at a high level since 2021.  

US mortgage rates fall for four consecutive weeks, hitting the lowest since last October. Freddie Mac stated in a release that the average rate for a 30-year fixed-rate mortgage was 6.58%, down from 6.63% last week.  

Bank of America: July credit card spending rebounds unexpectedly; Friday's retail sales may rise significantly. Bank of America credit card data shows that total household credit and debit card spending rose 1.8% year-on-year in July, a new high for the year. Among them, spending on services grew strongly, and spending in non-essential consumption areas rebounded. Bank of America analysis said the key question is how much of this growth is driven by real consumption and how much is the inflationary effect caused by tariffs.  

Chaotic tariff policy reversals; Los Angeles Port's July throughput hits a record high. As the busiest port in the US, the Port of Los Angeles handled more than 1 million TEUs in July, setting a new monthly record in its 117-year history. Traders rushed to ship goods before Trump's tariffs take effect to ensure timely delivery to US stores and avoid potential cost impacts.  

UK Q2 GDP grows 0.3% beyond expectations; further rate cuts recede. UK Q2 GDP grew 0.3% quarter-on-quarter, significantly better than the previously forecast 0.1%. The main driver of economic growth came from the service sector. Traders no longer fully price in further rate cuts this year and expect the benchmark interest rate to stabilize at 3.5% next year.  

Overseas Companies

Co-founder and Chief Engineer of xAI Announces Resignation, Saying "The Singularity is Near". Igor Babuschkin, co-founder of Elon Musk's xAI, announced his resignation in a post on X on Wednesday. He once led xAI's engineering team and helped the company grow into one of the leading AI model developers in Silicon Valley within just a few years of its establishment. In the future, he will set up his own venture capital firm, Babuschkin Ventures, to support startups that "drive human progress and unravel the mysteries of the universe".

Apple Watch's Blood Oxygen Feature Returns on the Eve of New Product Launch! Apple Inc. announced that it will restore the blood oxygen detection function of Apple Watch. This feature was previously removed due to a patent dispute with health technology company Masimo.

Founder "Vitalik": What Will Ethereum's "Next Decade" Be Like? On the 10th anniversary of Ethereum's birth, co-founder Vitalik Buterin expects Ethereum to shift its focus from a "world computer" to a more solid "world ledger". "If the ledger is a book, then ETH is the ink," he said. He emphasized that privacy is the core spirit of cypherpunks and should become a default function of wallets. Regarding the emerging ETH treasury, he holds a cautious attitude, acknowledging its role but warning of the risks of excessive leverage.

A Large Number of Stocks to Be Unlocked Soon, How Long Can CoreWeave's High Stock Price Last? About 84% of CoreWeave's Class A shares will be unlocked on Friday, which may trigger stock price fluctuations. Analysts generally have a neutral rating on its stock price. Currently, CoreWeave's market value is about 36 times its expected adjusted operating income in the next four quarters, even exceeding Nvidia's valuation level of 31 times.

Morgan Stanley Warns of a Shift in the Memory Market: Bearish on HBM's "Premium Myth", Bullish on the "Return of the Cycle" for Traditional Storage. Morgan Stanley stated that HBM's "premium myth" is facing challenges, with fierce competition and pricing pressures expected in 2026. SK Hynix's market share in Nvidia is expected to drop from 85-90% to more than 50%. Against the backdrop of expectations of the Federal Reserve's interest rate cuts and improved macroeconomic environment, market funds are shifting from AI-driven HBM to traditional storage sectors. Morgan Stanley is particularly optimistic about the investment value of traditional DRAM.

Industries/Concepts

1. Electric Tools: The hardware tool industry corresponds to a market of hundreds of billions of US dollars. At present, the painful period of channel de-stocking has passed. On the demand side, the US interest rate cut will take effect, and real estate demand is about to be released; on the supply side, electrification and intelligence are more conducive to the rise of independent brands of Chinese tool enterprises.

2. Traditional Chinese Medicine: Zheshang Securities pointed out that the traditional Chinese medicine industry has attributes similar to the banking industry in the pharmaceutical sector, with abundant cash, high dividends, little fluctuation in profit growth, and little impact from overseas situations. It is expected that the revenue and profit growth rates of the industry in Q2 2025 will be significantly improved compared with Q1 2025, and the revenue and profit growth rates in H2 2025 are expected to continue to rise.

3. 3D Printing: A research report by Zheshang Securities pointed out that relying on the three-dimensional resonance of technology, materials and applications, 3D printing has jumped from the "technology verification period" to the "commercial explosion period", with both ToB and ToC ends thriving. In particular, the penetration rate of 3D printing in consumer electronics is accelerating. Attention should be paid to related companies in the industrial chain.

4. Sustainable Aviation Fuel (SAF): Northeast Securities pointed out that at present, carbon emissions from the aviation industry have become one of the key areas for global carbon emission reduction due to their excessively fast growth rate. The transition from traditional fossil fuels to SAF is the only way for the global aviation industry to achieve carbon emission reduction. According to IATA's estimation, SAF needs to achieve nearly 60-fold capacity expansion within 25 years, and the market scale will reach the level of one trillion yuan.

Preview of Today's Key News

China's retail sales of social consumer goods, industrial added value of enterprises above designated size, fixed asset investment, real estate development investment, and residential sales prices in 70 large and medium-sized cities.

US retail sales in July.

US University of Michigan consumer confidence and inflation expectations in August.

US net international capital inflows in June.

Japan's real GDP in the second quarter.

The Russia-US summit will be held in Alaska on August 15.

2025 World Humanoid Robot Games.

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