Morning News

Source: Wall Street Journal  

**Market Overview**  

Eased U.S.-Europe trade tensions and improved U.S. consumer confidence drove the S&P 500 and Nasdaq up over 2%. Tesla led the "Magnificent Seven" tech stocks with a nearly 7% gain. Nvidia rose over 3% ahead of its earnings report. Trump Media fell 10%. The China-concept stock index extended its losing streak to six days. Pinduoduo dropped nearly 14% after Q1 revenue missed expectations. German stocks hit a record high.  

Japan intervened to stabilize its bond market, triggering a sharp rebound in Japanese bonds and boosting U.S. Treasuries. After the two-year Treasury auction, U.S. bond yields hit daily lows.  

The dollar strengthened amid Japan's bond market intervention and improved U.S. consumer confidence. The yen, after hitting a four-week high, fell over 1% at one point.  

Oil futures fell nearly 2% intraday, while gold futures dropped over 2%, marking a two-day decline for gold.  

In Asian trading, A-shares closed lower with turnover below ¥1 trillion. The innovation drug sector was active, while Hong Kong's Hang Seng Index rose in the afternoon session. Pop Mart hit a new high, while commodities and government bonds declined.  

**Key News**  

- **Trump praised the EU** for accelerating trade talks, a rare move. Europe, while pushing for faster negotiations, also threatened U.S. tech companies as potential "retaliation targets."  

- **Trump criticized Apple**, reportedly because CEO Tim Cook declined to join his Middle East trip.  

- **Japan's Nippon Steel** is set to acquire U.S. Steel at $55 per share, with "golden shares" ensuring U.S. control.  

- **U.S. Treasury cut short-term debt issuance** due to debt ceiling constraints. Japan's finance ministry surveyed the bond market, considering reducing ultra-long bond issuance, triggering a violent rebound in Japanese bonds. The U.K. also cut long-term bond issuance, shifting to short-term debt financing.  

- **Xiaomi's Q1 revenue and net profit hit record highs**, with smart home appliance revenue surging 113.8%. The company dismissed concerns about the YU7 affecting SU7 sales, stating SU7 needs no price cuts.  

- **Pinduoduo's Q1 net profit fell 47%**, with marketing expenses jumping 43%. The company acknowledged growth slowdowns are inevitable amid competition.  

- **Kuaishou's Q1 revenue grew 10.9%**, with its AI platform Ke Ling generating over ¥150 million.  

- **Reports suggest the Trump administration may screen international students' social media**, with the U.S. pausing new student visa interviews.  

**Market Close**  

- **Stocks**: Dow +1.78%, S&P 500 +2.05%, Nasdaq +2.47%. European STOXX 600 +0.33%.  

- **A-shares**: Shanghai -0.18%, Shenzhen -0.61%, ChiNext -0.68%.  

- **Bonds**: U.S. 10-year Treasury yield fell 7.92 bps to 4.4338%. Two-year yield dropped 1.89 bps to 3.9723%.  

- **Commodities**: WTI July crude -1.04% to $60.89/barrel. Brent July crude -1% to $64.09/barrel. COMEX gold -1.87% to $3,302.70/oz.  

**Key Details**  

- **Global**:  

 - Trump's rare praise for the EU boosted market sentiment. Europe is negotiating with the U.S. while threatening countermeasures against American tech firms.  

 - Trump's criticism of Apple reportedly stemmed from Cook skipping his Middle East trip. Analyst Ming-Chi Kuo suggested Apple might delay iPhone tariff discussions by appeasing Trump.  

 - Japan's Nippon Steel's U.S. Steel acquisition includes "golden shares" to address regulatory concerns.  

 - The U.S. Treasury reduced short-term debt issuance due to debt ceiling limits.  

 - Japan's finance ministry surveyed the bond market, considering cutting ultra-long bond issuance, triggering a bond rally. The U.K. also shifted to short-term debt financing.  

- **China**:  

 - Xiaomi's Q1 revenue and profit hit records, with smart home appliances surging 113.8%. The company remains confident in SU7 sales.  

 - Pinduoduo's Q1 profit fell 47%, with marketing costs up 43%. The company admitted growth slowdowns are inevitable.  

 - Kuaishou's Q1 revenue grew 10.9%, with its AI platform Ke Ling earning over ¥150 million.  

 - Reports indicate the Trump administration may screen international students' social media, pausing new visa interviews.  

- **Macro**:  

 - China's Jan-Apr industrial profits rose 1.4%, accelerating from Q1.  

 - Glencore bought Russian copper on the LME to meet tight supply in China.  

 - 52TOYS, a toy company, filed for a Hong Kong IPO, aiming to be the next Pop Mart.  

 - JD.com and Meituan's "food delivery war" has wiped out $100 billion in market value.  

 - BYD launched a new price war, cutting prices by up to ¥53,000. Analysts are mixed on the impact.  

- **Overseas**:  

 - U.S. April durable goods orders fell 6.3%, with core capital goods orders dropping the most since October.  

 - BofA's Hartnett called buying U.S. bonds the "biggest contrarian trade of 2025."  

 - Hedge fund star Robert Citrone sees the best opportunities in Latin America this year.  

 - French inflation unexpectedly dropped to a five-year low, boosting ECB rate cut bets.  

 - King Charles III opened Canada's parliament, emphasizing Canada's strength and freedom.  

 - The UAE became the first country to offer free ChatGPT Plus to all residents.  

 - Hedge funds are betting big on the Korean won's rise.  

 - The Russia-Ukraine drone war escalated, with Trump criticizing Putin.  

 - Iran's president warned the U.S. that sanctions won't starve Iran.  

- **Companies**:  

 - California's pension fund sold Apple shares, buying Meta, AMD, and McDonald's.  

 - A study showed the iPhone 16e underperformed Android phones with Qualcomm chips.  

 - Tesla faces declining consumer interest, with UBS reiterating a "sell" rating.  

**Sectors/Concepts to Watch**  

1. **Consumer**: Recovery remains the year's investment theme, with quality Chinese assets poised for revaluation.  

2. **Coal**: Analysts expect coal prices to bottom out in June as demand rises.  

3. **Waste Management**: Improved cash flow and efficiency are driving sector gains.  

4. **EVs**: Sales are expected to improve seasonally, but competition is intensifying.  

**Today's Preview**  

- Nvidia and Salesforce earnings.  

- Fed releases May meeting minutes.  

- Minneapolis Fed President speaks.  

- Japan's finance ministry auctions 40-year bonds.  

- OPEC+ ministerial meeting.  

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**Disclaimer**: The views expressed are solely the author's and do not constitute investment advice. The platform makes no guarantees regarding accuracy, completeness, originality, or timeliness and is not liable for any losses arising from reliance on this information.