News breakfast

Source: Wall Street Journal

**Market Overview**

Trump's fierce criticism of Powell has spooked the market, leading to a repeat of the stock - bond - currency rout in the United States.

All three major US stock indexes closed down more than 2%, with the Nasdaq down nearly 4% at one point. The day before the earnings report, Tesla fell 6%. Nvidia dropped 4.5%. The China stock index rebounded 0.2% in a narrow escape.

The yield on the 10 - year US Treasury bond rose for two consecutive days, while the yield on the 2 - year US Treasury bond hit a new low in more than a week. The US dollar index fell more than 1% intraday and dropped below 98 for the first time in three years. The Swiss franc rose more than 1% to a 10 - year high. The offshore RMB rose more than 200 points intraday and broke through 7.29. Bitcoin once rose nearly $4000, breaking through $88,000.

Gold surged more than 3% intraday, reaching a new high again. Crude oil once fell more than 3%.

During the Asian session, A - shares closed higher across the board. The Shanghai Composite Index approached 3300 points. Gold stocks witnessed a huge rally, with many hitting the daily limit. The Shanghai gold price stood above 800 yuan for the first time in history. Treasury bond futures generally declined.

**Key News**

The Central Committee of the Communist Party of China and the State Council: Promote the optimization and upgrading of goods trade and support qualified free trade zones to deepen the road testing of intelligent connected vehicles.

Trump attacks Powell again: Big loser, cut interest rates now! Otherwise, it will harm the economy. Republican lawmakers support Powell: No president has the right to fire the head of the US central bank! The core logic of the recent sell - off of US dollar assets: Trump is pressuring Powell.

Ishiba Shigeru makes a tough statement: Japan will not make one - sided concessions in the US - Japan tariff negotiations. Trump says the tariff negotiations are progressing well, while the Mexican president says: We haven't even reached a consensus. South Korean Acting President Han Duck - soo announces that South Korea and the US will hold the first round of "2 + 2" high - level trade talks this Thursday.

It is reported that the White House has started looking for a new US Defense Secretary, and the White House Press Secretary quickly refutes it.

Analysts at Wells Fargo: After Microsoft, Amazon has also suspended the leasing commitment of some data centers.

Amid the tariff storm, Tesla is about to release its earnings report. The Q1 report, together with the first "company update", will be released. Investors are closely watching five major issues.

The new trend of risk - aversion in the shadow of tariffs: Asian consumer stocks, Indian bank stocks, and Japanese long - term bonds.

**Market Closing Report**

European and American stock markets: The Dow Jones Industrial Average fell 2.48%, the S&P 500 Index fell 2.36%, and the Nasdaq Composite Index fell 2.55%.

A - shares: The Shanghai Composite Index rose 0.45%, the Shenzhen Component Index rose 1.27%, and the ChiNext Index rose 1.59%.

Bond market: The yield on the 10 - year US Treasury bond rose 8.57 basis points to 4.4106%. The yield on the 2 - year US Treasury bond fell 4.22 basis points to 3.7560%.

Commodities: The May WTI crude oil futures closed down 2.47% at $63.08 per barrel. The June Brent crude oil futures closed down 2.50% at $66.26 per barrel. The COMEX gold futures rose 3.17% to $3433.50 per ounce.

**Details of Key News**

**Global Highlights**

The Central Committee of the Communist Party of China and the State Council: Promote the optimization and upgrading of goods trade and support qualified free trade zones to deepen the road testing of intelligent connected vehicles. The opinions propose to create a high - energy - level scientific and technological innovation ecosystem, promote the integration of the innovation chain and the industrial chain, and expand international scientific and technological exchanges and cooperation. It is necessary to build a modern industrial system, improve the modernization level of the industrial chain, promote the construction of advanced industrial clusters, and promote the industrial collaborative linkage of free trade pilot zones. Free trade pilot zones are encouraged to carry out integrated innovation across the entire industrial chain.

Trump attacks Powell again: Big loser, cut interest rates now! Otherwise, it will harm the economy. After criticizing Powell last Thursday and Friday, Trump said on Monday that the cost of food such as energy and eggs has decreased, and there is almost no inflation, but the economy may slow down unless Powell, "Mr. Too Late" and a big loser, cuts interest rates now. The "New Fed News Agency" believes that Trump's call for interest rate cuts is aimed at alleviating the impact of the trade war. This time, the scale of tariffs is larger, and inflation may be more serious than in his first term. The Federal Reserve may face a more difficult choice.

Republican lawmakers support Powell: No president has the right to fire the head of the US central bank! Senator John Kennedy of Louisiana, a member of the Senate Banking Committee, believes that Powell will not allow inflation to soar, and he "will only do what he thinks is right". Austan Goolsbee, the president of the Federal Reserve Bank of Chicago, points out that in countries where the independence of the central bank is damaged, the inflation rate is usually higher, the growth is slower, and the job market is worse.

The core logic of the recent sell - off of US dollar assets: Trump is pressuring Powell. After the White House advisor admitted to studying the dismissal of Powell last Friday, the decline in US dollar assets expanded. Macquarie said that the latest catalyst for the US dollar sell - off may be the pressure on Powell. But in fact, the US dollar sell - off does not need further excuses. What has happened in the past three months is enough to prove the persistence of the US dollar sell - off, and this sell - off may continue for several months.

The sharp drop in the US dollar is affected not only by the tariff policy but also by the fact that the People's Bank of China does not "cut interest rates" and the subtle change in Japan's negotiation language. Analysts point out that the current market and the Trump administration have completely different interpretations of the US dollar's decline. The former believes that the end of "American exceptionalism" has shaken the US dollar's status as a reserve currency, while the latter believes that the strength of the US dollar has damaged the competitiveness of exporters, and its decline may be one of the means to accelerate the "transfer from the virtual to the real" of capital.

Ishiba Shigeru makes a tough statement: Japan will not make one - sided concessions in the US - Japan tariff negotiations. Ishiba Shigeru said in parliament on Monday: "If Japan gives up everything, we will not be able to ensure our national interests." This is one of the most confrontational remarks made by Ishiba Shigeru since the Trump administration launched a trade war against Japan's sensitive automotive and agricultural sectors.

Rumors about the "US - Japan agreement" are spreading, and the US market "falls without an agreement". The three - day Easter long weekend in the US has ended, but there is no news of the trade agreement priced in by the market last week, creating a market environment of "no news is bad news". When the market urgently needs an agreement to boost morale, there is news that Bessent is about to announce an important trade agreement, most likely with Japan.

Trump says the tariff negotiations are progressing well, while the Mexican president says: We haven't even reached a consensus. Mexican President Cienbaum said that he and Trump talked on the phone last week to discuss steel, aluminum, and automotive tariffs. Both of them believed that the call was "very productive", but the two sides did not reach a final agreement in the call, and they did not even reach any consensus.

South Korean Acting President Han Duck - soo announces that South Korea and the US will hold the first round of "2 + 2" high - level trade talks this Thursday, focusing on issues such as trade balance, the shipbuilding industry, and liquefied natural gas. The South Korean side will also request the exemption of steel and automotive tariffs. The South Korean side emphasizes that national interests come first, and the negotiation will not be easy.

It is reported that the White House has started looking for a new US Defense Secretary, and the White House Press Secretary quickly refutes it. Local time on Monday, according to a report by NPR, the White House has launched a process to find a new US Defense Secretary. However, shortly after, White House Press Secretary Leavitt refuted the report by NPR, saying that US President Trump supports the current Defense Secretary Hegseth.

Analysts at Wells Fargo: After Microsoft, Amazon has also suspended the leasing commitment of some data centers. Analysts at Wells Fargo said in a report on Monday that they learned over the weekend that Amazon had suspended lease negotiations for shared data centers with other companies. This is another sign that after Microsoft, another technology giant is cautious about capital expenditure, indicating that economic concerns may be affecting the spending plans of technology companies.

The earnings season of the Mag 7 companies has kicked off. Amid the tariff storm, Tesla has sounded the "red alarm", and Google is facing the "chain reaction" of tariffs. In the latest guidance, investors will be able to clearly distinguish which tariff risks have been fully digested by the market and which potential impacts have not been priced in.

Tesla's Q1 report, together with the first "company update", will be released. Investors are closely watching five major issues. Tesla will release its Q1 2025 earnings report at 5:30 a.m. on April 23, Beijing time, and will conduct a "company update" for the first time. Investors will closely monitor the progress of Musk's self - driving commitment, the progress of the affordable model, the trend of declining sales, the impact of tariffs, and the damage to the company's image caused by Musk's political participation.

The new trend of risk - aversion in the shadow of tariffs: Asian consumer stocks, Indian bank stocks, and Japanese long - term bonds. The sudden rise of these three major asset categories marks the shift of investors' thinking from "chasing global growth and exports" to "seeking the shelter of domestic demand resilience". "Investors are starting to price a more divided and protectionist world."

**Domestic Macroeconomy**

China's April LPR quotation was released, with both the 1 - year and 5 - year rates remaining unchanged. The 1 - year LPR is 3.1%, and the 5 - year - plus LPR is 3.6%, both unchanged from the previous values, remaining unchanged for the sixth consecutive month.

Analysis shows that the LPR has remained unchanged for six consecutive months, and the expectation of a reserve requirement ratio cut and interest rate cut in the second quarter has increased. Since the beginning of the year, the LPR has remained unchanged. Fundamentally, the economic trend in the first quarter was relatively strong. The time is ripe for a reserve requirement ratio cut and interest rate cut in the second quarter. The short - term policy interest rate may be cut by 30 basis points, driving the LPR down and reducing the financing cost of the real economy.

Four departments including the People's Bank of China: Pilot in Shanghai to support cross - border RMB trade financing through the rediscount window. The notice states that it is necessary to strengthen the construction of CIPS, improve the system functions, and study and promote the application of blockchain technology to provide safe and efficient settlement and clearing services for global trade, shipping, and investment and financing denominated in RMB.

Four departments including the Ministry of Commerce of China have spoken out on issues related to the expansion of the opening - up of the service industry. The central bank said that the "Work Plan for Accelerating the Comprehensive Pilot of the Expansion of the Opening - up of the Service Industry" promotes the pilot - first of science and technology finance measures. For example, it supports the launch of national - level financial pilot projects such as the pilot of capital market financial technology innovation, the pilot of internal evaluation of intellectual property pledge financing by banks, and encourages the development of intelligent evaluation tools for intellectual property rights, so as to enhance the ability of science and technology finance to support high - level opening - up.

**Domestic Companies**

NINGDE TIMES' first technology day focuses on: 12C lithium - iron fast - charging, self - generating anode, and "dual - core" architecture. The second - generation Shenxing battery can provide a range of 800 kilometers, while supporting a peak charging rate of up to 12C, corresponding to a charging power of 1.3MW, achieving a 5 - minute energy replenishment of 520 kilometers. The key breakthrough of the "self - generating anode technology" lies in overcoming the bottleneck of the cycle decay of lithium metal.

China's C909 aircraft has been put into operation in Vietnam, and the first - day ticket sales are booming! This marks the official entry of Chinese - made aircraft into the Vietnamese market, expanding the coverage and usage rate of the C909 aircraft in Southeast Asia. Malaysia is also considering introducing Chinese commercial aircraft.

iFLYTEK's Q1 revenue increased by 27.7%, and the loss narrowed by nearly 36%, with the commercialization process of the large - model accelerating. The company has maintained a strategic investment in the research and development of the "iFLYTEK Xinghuo" large - model.

Goertek's Q1 revenue decreased by 15.57% year - on - year, while its net profit increased by 23.53% year - on - year. The company has invested in the VR/AR optical track and added an investment in Shanghai Conant Optical Technology Group, with long - term equity investment soaring nearly two - fold.

"Ne Zha 2" is a hit, and Enlight Media's Q1 net profit increased by 375% year - on - year. Enlight Media's revenue in 2024 increased by 2.58% year - on - year, but its net profit attributable to the parent company decreased by 30.11%.

**Overseas Macroeconomy**

The real Trump 2.0 trade: Sell off the US! Media analysis shows that Trump's attack on the Federal Reserve is pushing the world further away from the US - dominated track, as governments and investors are losing confidence in the US dollar and US Treasury bonds.

BofA's Hartnett: Sell off US stocks on rallies in Q2 until the Fed cuts interest rates and Trump cuts tariffs. Michael Hartnett adheres to his "long BIG" concept - bonds, gold, and international stocks. He believes that investors should sell off US stocks on rallies in the second quarter until the Fed starts cutting interest rates and Trump cuts tariffs.

Trump's trade war is destroying the US's "financial hegemony". Analysts point out that the volatility in the US Treasury bond market and the unexpected weakness of the US dollar indicate that confidence in the safety of US Treasury bonds or the attractiveness of US dollar assets is beginning to waver. The initial trade conflict may escalate into a more dangerous "capital war", weakening the US's "financial hegemony" that has lasted for more than half a century.

New evidence shows that the US housing market is cooling: Miami's sales volume has plummeted, demand has dropped sharply, and inventory has soared. The Miami real estate market is facing a significant decline in demand and a significant downward risk. Data shows that the number of home sales in Miami has decreased by 50% compared to the peak of the epidemic, and inventory has soared to 51,000 units, reaching the second - highest level in March in history.

The US dollar has plunged, and emerging markets are making a big comeback: The Thai baht and the Malaysian ringgit are soaring, and the Indian stock market has risen for five consecutive days! After recording the largest weekly gain in six weeks last week, the emerging - market currency index continued to rise on Monday. The Thai baht and the Malaysian ringgit performed strongly, with a daily gain of 1% each. Over the past month, the Thai baht has appreciated 3.2% against the US dollar, with a remarkable upward trend. The Indian Nifty 50 index has risen 5.99% in five days, reaching the highest level since February 2021.

Under the threat of tariffs, the Bank of Japan maintains a gradual interest - rate - hike stance. Japanese central bank officials generally believe that there is no need to change the established stance of gradually raising interest rates for the time being, and the central bank still prefers to wait for more data before making a decision. Analysts point out that the central bank may lower its economic growth forecast in the next quarterly report from the current 1.1% to about 0.5%.

Impact of the "tariff war": South Korea's exports have collapsed. Data from the South Korean Customs Service shows that in the first 20 days of April (adjusted for working days), South Korea's exports decreased by 5.2% year - on - year, in sharp contrast to the 5.5% growth in March. South Korea's exports to the US and China decreased by 14.3% and 3.4% respectively, while its exports to the EU increased by 13.8%.

**Overseas Companies**

The iPhone 17 series is facing a shortage of core materials. Wall Street Journal has learned from the supply chain that due to the shortage of low - thermal - expansion - coefficient fiberglass cloth materials, the inventory preparation for Apple's new - generation smartphone iPhone 17 series is extremely tight. "Cook is extremely anxious and urges suppliers every day. This material has a great impact and is an indispensable core component material for SoC chips, RF packaging substrates, camera modules, and batteries."

Industry/concept

1. Infrastructure: Caitong Securities pointed out that my country's fiscal policy is generally more active in 2025, and infrastructure investment may have increased expectations, helping the industry's fundamentals continue to improve marginally. In addition, based on the perspective of development strategy, investment in business layout in countries along the "Belt and Road" may be increased, and many leading companies in the construction industry are actively expanding their international layout, and overseas engineering construction releases the increase in market demand.

2. Health products: Dongwu Securities Research Report points out that health products have the characteristics of new consumption in three levels: new channels, new circles, and new product categories. The growth of the industry and the evolution of business models have been underestimated by the market. Under the wave of new consumption, the traditional aesthetic system and valuation perspective no longer fits in the new industry cycle, and pays attention to the possibility of sector valuation switching.

3. Large aircraft: Guolian Minsheng Securities pointed out that under the background of tariff friction, Boeing will suffer significant damage, and domestic civil aviation orders are expected to tilt towards COMAC. In March, COMAC Supplier Conference raised its 2025-2029 C919 production capacity and downline volume targets. The large aircraft industry is showing a strong supply and demand trend, and the domesticization process of the large aircraft industry chain is expected to accelerate.

4. Military Industry: The market has doubts about fluctuations in military industry orders. Shenwan Hongyuan Research Report believes that the fundamentals of military industry are certain to rise, and it is expected that military industry will continue to maintain rapid growth in the next few years. Tariff conflict highlights the "comparative advantage" of demand in the military industry, and under the influence of geopolitical factors, military industry investment will be more certain and faster.

Today's news preview

The IMF released the World Economic Outlook report.

Federal Reserve Vice Chairman Jefferson, Philadelphia Fed Chairman and Minneapolis Fed Chairman spoke.

European Central Bank President Lagarde spoke.

Tesla announced its financial report.

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