Morning News

Source: Wall Street News

### Market Overview

On Friday, the non-farm payrolls data exceeded expectations, partially alleviating recession concerns. Coupled with the boost from trade news, the S&P 500 touched 6,000. The feud between Trump and Musk did not further intensify for the time being. Tesla once rose more than 7% intraday and closed up more than 3%.

Large-cap US tech stocks strengthened overall, and the seven tech giants all saw gains. US rare earth concept stocks generally declined. The China Index fell slightly by 0.06% on Friday, cumulatively rising more than 3% for the whole week.

The market's expectations for the Fed to cut interest rates within the year decreased. US Treasury yields rose sharply, with the yield on the two-year US Treasury bond breaking through 4%, and the US dollar also increased.

Spot gold fell more than 1%. Silver continued its upward trend, rising more than 1.4% and then slightly pulling back. Bullish sentiment for crude oil was high, with US oil rising nearly 2%.

### Key News

The spokesperson of the Ministry of Foreign Affairs announced that at the invitation of the British government, He Lifeng, a member of the Political Bureau of the Central Committee and Vice Premier of the State Council, will visit the UK from June 8th to 13th. During this period, the first meeting of the China-US economic and trade consultation mechanism will be held with the US side.

The Ministry of Commerce answered reporters' questions regarding export control measures for medium and heavy rare earths, stating that implementing export controls is in line with international common practices, and a certain number of compliant applications have been approved according to law.

The People's Bank of China has increased its gold holdings for the 7th consecutive month, increasing by 60,000 ounces month-on-month, and the pace of increase continues to slow down.

Musk "quietly deleted posts", and Trump said "the relationship is over", warning Musk of "serious consequences" if he funds the Democratic Party. The inside story of the "Trump-Musk" breakup leaked: drug addiction, getting into a fight with the Treasury Secretary in the White House, revenge from the president's aides. Musk can't overthrow the Republican Party, but he really has a chance to disrupt the midterm elections!

Tesla's RoboTaxi was released this week! Bulls and bears had a fierce debate: Bulls saw key progress, while bears questioned the path to scale.

Well-known Bank of America analyst Hartnett: Trump cuts taxes like a Republican and spends money like a Democrat. The US stock market is like the "deregulation in the 80s + tech boom in the 90s".

BYD's Li Yunfei angrily scolded someone as "both stupid and bad", and Geely's Yang Xueliang pointed out that someone was "the thief shouting catch the thief".

Browsers have become the core entry point of AI, and Google, Perplexity, Tencent, and Alibaba all want to seize this opportunity.

### Market Closing Reports

- **European and American Stocks**: The Dow Jones Industrial Average rose 1.05%, the S&P 500 Index rose 1.03%, and the Nasdaq rose 1.2%. The European STOXX 600 Index closed up 0.32%.

- **A-shares**: At the close, the Shanghai Composite Index rose 0.04%, the Shenzhen Component Index fell 0.19%, and the ChiNext Index fell 0.45%.

- **Bond Market**: The yield on the 10-year benchmark US Treasury bond rose 11.50 basis points, cumulatively rising 10.52 basis points for the whole week. The yield on the two-year US Treasury bond rose 11.64 basis points to 4.0365%, cumulatively rising 13.90 basis points for the whole week.

- **Commodities**: Spot gold fell 1.23% to $3,311.34 per ounce. WTI July crude oil futures closed up 1.91% at $64.58 per barrel, cumulatively rising 6.23% for the whole week. Brent August crude oil futures closed up 1.73% at $66.47 per barrel, cumulatively rising 5.88% for the whole week.

### Detailed Key News  

#### Global Highlights  

**He Lifeng to Visit UK and Hold First China-US Economic and Trade Consultation Mechanism Meeting**. The Spokesperson of the Ministry of Foreign Affairs announced that at the invitation of the British government, He Lifeng, Member of the Political Bureau of the Communist Party of China Central Committee and Vice Premier of the State Council, will visit the UK from June 8 to 13. During the visit, the first meeting of the China-US economic and trade consultation mechanism will be held with the US side.  

**Ministry of Commerce Answers Questions on Export Controls for Medium and Heavy Rare Earths**: Implementing export controls is in line with international common practices, and a certain number of compliant applications have been approved according to law.  

**Question**: Recently, many countries have expressed concern about China’s rare earth export control measures. What measures will China take to address these concerns?  

**Answer**: Rare earth-related items have dual civilian and military uses, and implementing export controls on them conforms to international common practices. China legally imposes export controls on rare earth-related items to better safeguard national security and interests, fulfill international obligations such as non-proliferation, and reflect its consistent position of upholding world peace and regional stability.  

The People’s Bank of China increased its gold holdings for the 7th consecutive month, adding 60,000 ounces month-on-month, with the pace of increase continuing to slow. For comparison, it added 70,000 ounces in April, 90,000 ounces in March, and the growth rate further slowed in May. At the end of May, China’s foreign exchange reserves stood at $3,285.3 billion, an increase of $3.6 billion (0.11%) from the end of April.  

**Retail Investors Bottom-Fish Tesla, Which Rebounds, but Musk’s Troubles Are Far from Over**: Government contracts under review, financing risks emerging, and robotics chief resigning. Tesla suffered its largest single-week decline since 2023 last week, but rebounded on Friday with retail investor bottom-fishing. However, Musk’s troubles are far from over, and hidden worries in his business empire have emerged. Trump said on Friday he would “review” government contracts awarded to Musk. Additionally, Wall Street bankers fear that financing for xAI may be disrupted. Media also reported the same day that the head of Tesla’s Optimus humanoid robot project is set to resign.  

**Musk ‘Quietly Deletes Posts,’ Trump Says ‘Relationship Is Over,’ Warns Musk of ‘Serious Consequences’ if Funding Democrats**: During his recent heated public dispute with Trump, Musk posted on social media implying Trump’s connection to the “Epstein case.” Now, the post has been deleted by Musk. When asked about Musk on June 6 local time, Trump told the media on Air Force One that he was too busy to “think about Elon” and “just wished him well.” Hours later, Musk replied to the video clip on social platform X, leaving a message “Same.”  

**Inside Story of the ‘Trump-Musk’ Breakup Leaked: Drug Addiction, Fistfight with Treasury Secretary in the White House, and Revenge from Presidential Aides**: As the “Trump-Musk” honeymoon period collapses, more inside details have been exposed by the media recently: Trump privately called Musk a “drug addict,” and Musk allegedly shouldered the Treasury Secretary like a football player in the White House corridor. The real fatal blow came from the White House personnel chief’s elaborate political calculations against Musk’s space dreams.  

**Trump ‘Doesn’t Want to Talk,’ Musk ‘Doesn’t Answer Calls’—Where Is the ‘Political Marriage’ Between Silicon Valley and MAGA Heading?** The feud will ultimately distract from Trump’s agenda. Establishment Republicans worry that the once-in-a-term legislative opportunity window is closing rapidly. Republican base voters have begun fiercely debating three positions: supporting Trump, supporting Musk, or hoping for a reconciliation between the two.  

**Can Musk Overthrow the Republican Party? Unlikely, but He Really Has a Chance to Disrupt Midterm Elections!** There are not many seats at stake in the midterm elections—about 40 House seats will be true swing seats. This means a small disruptive faction could multiply the targeting effect of precision bombing by leveraging carefully selected 5% of voters in fewer than 10% of seats, with considerable returns.  

**Tesla RoboTaxi Launched This Week! Bulls and Bears Clash**: Bulls see key progress; bears question the path to scaling. Bulls focus on Tesla’s rapid technological iteration and key moats in data and computing, while bears question scaling challenges, such as a lack of core competitiveness in infrastructure and municipal relations, as well as data quality concerns. Barclays believes the Robotaxi launch may fall short of expectations, with weak fundamentals not yet fully acknowledged, but long-term market perception of Tesla’s autonomous driving/AI value will not change.  

**BofA Renowned Analyst Hartnett: Trump Cuts Taxes Like a Republican, Spends Like a Democrat; US Stocks Resemble the ‘1980s Deregulation + 1990s Tech Boom’**: Michael Hartnett noted that the U.S. government is spending $7 trillion against $5 trillion in revenue, with a $2 trillion deficit gap causing the dollar to plummet despite 5% Treasury yields. Behind the market’s exuberance lie a collapsing dollar, surging debt, and uncertainties driven by AI.  

**BYD’s Li Yunfei Angrily Calls Someone ‘Stupid and Evil’; Geely’s Yang Xueliang Accuses ‘The Thief Crying Stop Thief’**: Li Yunfei responded to the “Automotive Industry Evergrande” and “Atmospheric Pressure Fuel Tank” incidents, stating the fuel tanks are compliant and finances are sound. Geely’s Li Shufu said some automakers’ competitive methods are unspeakable; the global automotive industry currently faces severe overcapacity, and no new auto production plants should be built.  

In 2023, at the launch event for its 5 millionth new energy vehicle, BYD publicly called on the industry to “stand together as Chinese automotive enterprises,” garnering responses from most automakers. Unexpectedly, two years later, tensions among major automakers have intensified. Perhaps this reflects the extreme escalation of market competition and is a necessary step for China’s automotive industry to mature after rapid growth.  

**Browsers Become the Core Entry Point for AI—Google, Perplexity, Tencent, and Alibaba All Vying for Dominance**: Perplexity is developing an AI browser named Comet, expected to launch in the coming months. Google is embedding its Gemini AI assistant into Chrome, OpenAI is considering developing a browser, Tencent’s QQ Browser has launched QBot smart assistant and upgraded to an AI browser, and Alibaba’s夸克浏览器 (KuaiKe Browser) has also integrated AI features.  

#### Domestic Macro  

**Ministry of Commerce: Price Undertaking Consultations for China-EU Electric Vehicle Cases Enter Final Stage, but Joint Efforts Still Needed**: Minister Wang Wentao and Commissioner Šefčovič held professional and in-depth discussions on electric vehicle cases, pushing the issue a major step closer to a proper resolution. Currently, price undertaking consultations for China-EU electric vehicle cases have entered the final stage, but both sides still need to make efforts. The EU proposed exploring new technological pathways simultaneously, and China will assess the feasibility of the EU’s proposal from legal and technical perspectives. Both sides instructed their working levels to redouble efforts to find a mutually acceptable solution in a manner consistent with their respective legal provisions and WTO rules, properly resolving trade disputes.  

**Yu Yongding: Investment-Driven or Consumption-Driven?** Yu Yongding, Member of the Chinese Academy of Social Sciences, stated that when discussing long-term economic growth, a “consumption-driven” growth model does not exist. Regarding policy options to boost consumption demand, since reduced consumption may primarily stem from weak demand for high-end consumer goods among middle-to-high-income groups, measures such as issuing consumption vouchers, cutting personal income taxes, and “trade-in” programs may have limited effects. To increase consumption, income distribution equalization is needed to narrow the income gap as much as possible.  

Boeing resumes aircraft deliveries to China.  

#### Domestic Companies  

**Could Mixue Become the First ‘Fallen Treasure’ of the New Consumption Era?** Following BofA’s downgrade of Mixue Ice Cream & Tea to “Underperform,” UBS also downgraded Mixue from “Neutral” to “Sell,” arguing its valuation is too high, fully reflecting or even ahead of long-term growth expectations. Its 2.2x PEG ratio also exceeds the industry average of 1.9x. Meanwhile, significant setbacks in overseas operations, including negative growth, further weaken its investment value.  

#### Overseas Macro  

**Japanese Media: Japan Plans to Sacrifice Chinese Interests for US Tariff Concessions**: According to Global Times, on June 5, Japan’s Chief Trade Negotiator and Minister of Economic Revitalization, Akazawa Ryo, traveled to the US for the fifth round of Japan-US tariff negotiations. Nikkei Asia reported the same day that Japan will propose a China-targeted package of cooperation measures in the tariff talks, focusing on Chinese rare earths and US liquefied natural gas supply chains disrupted by Sino-US tensions. The report suggests Japan is seeking US tariff concessions by introducing such a “targeted plan” against the backdrop of the US government viewing China as the “primary target” of its tariff war.  

**Trump Attacks Powell Again: Cut Rates by 1%! If Inflation Rebounds, Just Raise Rates**: Trump said he is considering candidates for the next Federal Reserve chair and will announce a decision soon.  

**US May Nonfarm Payrolls Increased by 139,000, Lowest Since February**: While higher than market expectations, the previous two months’ data were collectively revised down by 95,000; the unemployment rate was 4.2%. Wages grew unexpectedly, but the total labor force shrank. “New Fed News Agency” (WSJ’s Nick Timiraos): Slower job growth may not signal economic weakness, allowing the Fed to stay on hold this summer.  

The US State Department resumes processing international student visas for Harvard University.  

**No Sign of Weakening US Consumption: April Consumer Credit Surges, Including Most-Watched Student Loans**: Fed data shows US consumers are borrowing at an alarming rate: April consumer credit doubled to $17.9 billion, with student loans surging to a record $1.8 trillion, as millions of borrowers face massive default risks.  

**US Stocks Approach All-Time Highs, but Investors Are in a Dilemma: Chase the Rally or Wait for a Pullback?** On the surface, tariff and US recession risks are diminishing, but the S&P 500 appears to have hit a short-term resistance level at 6,000. Some tail risks remain: recent escalation of the Russia-Ukraine conflict and uncertainties around Section 899. Apart from Trump’s tariff factors, no one can identify a catalyst for deleveraging.  

**After Los Angeles, New York Is in Turmoil: Nearly 150 Protesters Clash with Police, Over 20 Arrested**.  

**Japan’s Q1 Real Estate Investment Hits All-Time High; Tokyo Overtakes New York as World’s Top Destination for Capital**: Global real estate investment increased 34% year-over-year in Q1 2025, with investment in Japan exceeding ¥2 trillion, a quarterly record and 23% growth from the same period last year. Among global cities, Tokyo led with $11 billion in real estate investment, far surpassing New York ($7.3 billion).  

**South Korean Stocks Surge Under New Government; Foreign Investors Rekindle Enthusiasm for ‘Korea Special Valuation’**: As major global asset managers increase holdings of South Korean stocks and upgrade their ratings, investors are optimistic about the Korean market. This optimism stems primarily from new President Lee Jae-myung’s “shareholder-friendly” policies, which are expected to address the long-standing “Korea discount” problem plaguing the stock market.  

#### Overseas Companies  

**Meta Plans to Invest Over $10 Billion in Scale AI, Setting a New Private Company Funding Record**: Reports say Meta is in negotiations to invest possibly over $10 billion in AI startup Scale AI, which labels data for training AI models to help companies develop machine learning. Of greater concern is the shared interest between Scale and Meta in defense technology.  

**‘US Version of Unitree’ Figure Responds to质疑 Over ‘Robots Entering BMW Factories’**: A 60-minute unedited video claims “performance surged in three months.” Figure stated that after just three months of deployment in logistics environments, Helix’s average package handling speed improved from 5.0 seconds to 4.05 seconds, a nearly 20% efficiency gain, while also handling complex package types like deformable plastic bags and flat envelopes, nearing human operator efficiency.  

**Singapore Begins Driving Out Crypto Players**: On May 30, the Monetary Authority of Singapore announced that all crypto service providers registered or operating in Singapore must cease providing services to overseas clients by June 30, 2025, if they have not obtained a DTSP license. Under the consultation document, all entities related to crypto asset transactions—including exchanges, custodians, payment providers, and issuers—must be licensed.  

#### Sectors/Concepts  

1. **Humanoid Robots**: Guotai Junan and Haitong Securities research reports note that as the core component of robot joints, bearings are expected to drive significant market growth with the development of the humanoid robotics industry. Against the backdrop of accelerated domestic substitution, companies engaged in humanoid robot bearings and their supporting core processing equipment (grinding machines) are poised for new development opportunities.  

2. **Water Conservancy**: GF Securities reports that on June 3, the Three Gorges Electronic Procurement Platform issued a tender for the “Three Gorges Water Transport New Channel Project Survey and Design,” marking a substantive advance in the project. In the industrial chain, midstream construction enterprises are well-positioned to benefit first.  

3. **Coal**: Guosheng Securities reviews three price bottoming processes in 2008 (around 500 yuan/ton), 2015 (around 350 yuan/ton), and 2020 (around 470 yuan/ton). With nearly four years of price adjustment in the current cycle, signs of a turnaround are emerging, and a rebound will depend on policy regulation.  

4. **ASIC**: Guosheng Securities points out that North American CSP manufacturers are accelerating the development of self-developed ASIC products. Downstream industry chain signals—such as Broadcom’s guidance that XPU deployments will exceed expectations in 2026 and Wistron’s 5% revenue growth—indicate that ASIC demand has entered a full outbreak phase, benefiting domestic ASIC-related firms.  

#### Upcoming Key News  

- China’s May CPI, PPI  

- China’s May financial data  

- China’s May import-export data  

- Japan’s Q1 real GDP  

- The U.S. government must submit a response to the Federal Circuit Court of Appeals (CAFC) ruling, which will determine whether to continue “staying” the International Trade Court’s ruling that Trump’s tariffs are illegal, maintaining the tariffs until the appeal is concluded.  

- At the invitation of the British government, He Lifeng, Member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, will visit the UK from June 8 to 13, during which the first meeting of the China-US economic and trade consultation mechanism will be held.  

- Apple’s Worldwide Developers Conference  

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