Morning News

Source: Wall Street News

The U.S. is considering intervention in the Israel-Iran conflict, causing U.S. stock index futures and European stocks to decline. Nasdaq 100 futures fell by more than 1%, while the pan-European stock index recorded three consecutive daily declines, hitting a new low in over a month. Luxury giant Kering dropped by more than 3%, while the oil and gas sector rose by 0.8% against the market trend.  

U.S. Treasury bonds were closed. The Federal Reserve hinted at no rush to cut interest rates, the Bank of England kept policies unchanged, and European bond prices fell.  

After the White House announced it would decide whether to strike Iran and mentioned diplomatic channels, the U.S. Dollar Index, which had hit a one-week high during intraday trading, turned lower. The Bank of England's voting showed a more dovish divergence than expected, causing the British pound to drop briefly before rebounding. Canada plans to raise steel and aluminum tariffs in retaliation against the U.S., and the intraday decline of the Canadian dollar narrowed to less than 0.1%.  

Sustained Middle East risks continued to boost oil prices, with crude oil rising by more than 3% intraday. Brent crude closed at a new five-month high. Gold hit a one-week low intraday, but spot gold later turned higher.  

During the Asian trading session, declines in A-shares and Hong Kong stocks expanded in the afternoon. The three major A-share indices fell by more than 1%, oil and gas stocks rose, the Hang Seng Index dropped by 2%, and the "Three Treasures of New Consumption" plunged.  

### Key News  

- Leaders of China and Russia held a phone call, focusing on exchanging views on the Middle East situation.  

- China's Ministry of Commerce: It will accelerate the review of稀土 (rare earth)-related export license applications in accordance with laws and regulations.  

- China's National Narcotics Control Office decided to include nirtetraline substances and 12 new psychoactive substances under control.  

- The Israeli Prime Minister stated that Israel will forcefully respond to Iran's missile attack on Israeli hospitals, and eliminating Iran's nuclear and missile threats is a common goal of the U.S. and Israel. Trump is said to believe it is necessary to disable Iran's Fordo nuclear facility. The White House stated that Trump will decide within two weeks whether to attack Iran, noting that diplomatic channels remain an option; Iran has never been closer to acquiring nuclear weapons. Iran claimed it never requested negotiations with the U.S., denied deliberately attacking hospitals, and Israel pushed for direct U.S. intervention in the war.  

- Trump demanded the Fed cut rates by 2.5 percentage points for two consecutive days and again called Powell "stupid."  

- Media: The EU is pushing for a "U.K.-style" trade deal with the U.S. and is increasingly accepting a 10% tariff level as the benchmark for the trade agreement.  

- Canada is considering raising retaliatory steel and aluminum tariffs against the U.S. to protect domestic industries.  

- The Bank of England kept rates unchanged as expected but sent a dovish signal. The number of officials supporting rate cuts exceeded expectations, fueling expectations of two 25-basis-point rate cuts within the year.  

- Japan adjusted its bond issuance plan, significantly reducing the issuance of 10% ultra-long-term bonds and increasing short-term bond issuance.  

### Market Closings  

- European and U.S. stocks: U.S. stocks were closed. The European STOXX 600 Index fell by 0.83% to 535.86 points.  

- A-shares: The Shanghai Composite Index fell by 0.79% to 3,362.11 points; the Shenzhen Component Index fell by 1.21% to 10,051.97 points; the ChiNext Index fell by 1.36% to 2,026.82 points.  

- Bond market: U.S. Treasuries were closed. By the end of the European bond market, the yield on Germany's 10-year benchmark bond was about 2.52%, up about 2 basis points on the day; the yield on 2-year German bonds was about 1.83%, flat with Wednesday.  

- Commodities: Brent August crude oil futures closed up 2.80% at $78.85. London tin fell nearly 1.1% to $32,009/ton. London aluminum fell about 1% to $2,522/ton. Due to the U.S. public holiday, there were no closing quotes for U.S. crude oil and gold futures. By the end of trading in New York, WTI July crude oil futures rose nearly 0.9% to $75.8/barrel; COMEX August gold futures fell about 0.6% to $3,387.3/ounce.

### Details of Key News  

#### Global Highlights  

- Leaders of China and Russia held a phone call, focusing on exchanging views on the Middle East situation.  

- China's Ministry of Commerce: It will continuously accelerate the review of rare earth-related export license applications in accordance with laws and regulations. He Yadong, Spokesperson of the Ministry of Commerce, stated that China has always attached great importance to maintaining the stability and security of the global production and supply chain. By accelerating the review of rare earth-related export license applications in accordance with laws and regulations, a certain number of compliant applications have been approved. China is willing to further strengthen communication and dialogue on export controls with relevant countries to actively promote convenient and compliant trade.  

- China's National Narcotics Control Office decided to include nirtetraline substances and 12 new psychoactive substances under control. Shan Yehua, Deputy Director of the National Narcotics Control Office, introduced that the category-based control of nirtetraline substances represents another global regulatory innovation after the category-based control of fentanyl substances and synthetic cannabinoids, which is of great significance for curbing new drug crimes involving such substances.  

- Trump is said to believe it is necessary to disable Iran's Fordo nuclear facility, and the White House stated it will decide within two weeks whether to attack Iran.  

- On Thursday, an Iranian missile struck a hospital in Israel, causing at least 71 people to be injured and hospitalized, according to Israeli authorities. The Israeli Prime Minister said it would forcefully respond and "demand the full price" from Iran, noting that eliminating Iran's nuclear and missile threats is a common goal of the U.S. and Israel. The Israeli Defense Minister claimed that Khamenei ordered the hospital attack, stating, "Such a person cannot be allowed to continue existing." U.S. media reported that without continued U.S. support, Israel's air defense system may only hold out for about 10 days.  

- Iran claimed it never requested negotiations with the U.S., repeatedly denied deliberately attacking the hospital, and accused Israel of shifting to a "victim" narrative to push for direct U.S. intervention in the war. Khamenei said the U.S. has intervened in Middle East affairs, exposing Israel's "weakness and incompetence." Iran announced the launch of a new phase of retaliatory actions, vowing to continue strengthening missile strikes.  

- The White House stated that Trump believes diplomatic channels remain an option; Iran has never been closer to acquiring nuclear weapons and may build one within weeks, so any nuclear agreement must include a ban on uranium enrichment and prevent Iran from obtaining nuclear weapons. Media speculated that the U.S. may use the GBU-57 bunker buster, the most powerful bomb after nuclear weapons, to strike Iranian nuclear facilities.  

- Avoiding the Strait of Hormuz! Tankers start rerouting, with freight rates surging over 100% in a week. After Israel attacked Iran, tanker rents in the Strait of Hormuz more than doubled within a week. Daily rents for Very Large Crude Carriers (VLCCs) rose from $19,998 to $47,609, a 138% increase. Shipowners are avoiding the route or significantly increasing prices due to geopolitical risks and navigation signal interference. Oil giants like Shell admit to being "extra cautious" in Middle East shipping and have formulated emergency plans.  

- What is Trump torn about regarding military action against Iran? Trump's dilemma: Can bunker busters end Iran's nuclear program? U.S. officials revealed that Trump wants to ensure such an attack is truly necessary, will not drag the U.S. into a long-term Middle East war, and most importantly, can genuinely achieve the goal of destroying Iran's nuclear program.  

- Wall Street hot topic: How will markets react if the U.S. intervenes in the Israel-Iran conflict? As Middle East rivalry escalates, Trump has approved an attack plan but put it on hold. Analysts believe that if Trump orders the U.S. military to deeply intervene in the Israel-Iran conflict, U.S. stocks may experience a "knee-jerk" sell-off, but faster escalation could end the conflict more quickly. However, the market's initial reaction will undoubtedly be negative: U.S. stocks will fall, gold prices will soar, U.S. Treasury yields may decline, and the U.S. dollar may rebound.  

- Trump demanded the Fed cut rates by 2.5 percentage points for two consecutive days, again calling Powell "stupid," "one of the most destructive people," and a "disgrace to America." Trump frequently pointed out that "Mr. Too Late" Powell's refusal to cut rates has caused the U.S. to "lose hundreds of billions of dollars."  

- Report: The EU is pushing for a "U.K.-style" trade deal with the U.S. Media reported that in trade negotiations with the U.S., the EU is seeking a trade agreement similar to the U.S.-U.K. deal, first addressing partial tariff issues and postponing comprehensive countermeasures. Internal EU divisions are weakening its negotiating position, with countries like France advocating retaliation against the U.S., while Italy, Hungary, and others prefer continuing negotiations.  

- Other media said the EU is increasingly accepting a 10% reciprocal tariff level as the benchmark for a U.S.-EU trade agreement.  

- Canada considers raising retaliatory steel and aluminum tariffs to protect domestic industries. The Canadian government stated that if trade negotiations with the Trump administration stall, it may raise tariffs on U.S. steel and aluminum products as early as July 21, aligning the level with progress in broader U.S. trade arrangements. Thereafter, the Canadian dollar narrowed most of its intraday losses, and shares of Algoma Steel Group listed in Toronto once rose nearly 8%.  

- The Bank of England kept rates unchanged as expected, fueling expectations of two 25-basis-point rate cuts within the year. The number of officials supporting rate cuts in the vote exceeded market expectations: six voted to maintain rates, while three voted against, supporting a 25-basis-point cut. Economists had expected seven in favor and two against. The meeting minutes also sent a dovish signal, noting "more signs of downward inflationary pressure in the labor market." Traders have fully priced in two 25-basis-point rate cuts this year.  

- Japan adjusted its bond issuance plan, significantly reducing 10% of ultra-long-term bond issuance and increasing short-term bond issuance. Japan plans to cut the issuance of 20-year, 30-year, and 40-year bonds by ¥100 billion (approximately $690 million) each at each auction starting in July until the end of March 2026, meaning ultra-long-term bond issuance for this fiscal year will be reduced by about 10% compared to the original plan. Meanwhile, to make up for the shortfall, the Ministry of Finance plans to increase short-term bond issuance and bonds specifically designed for households.  

- The five market consensuses and five expectation gaps. Huatai Securities believes the five current market consensuses are: reduced tariff impact, U.S. Treasury rates more likely to rise than fall, domestic rates fluctuating at low levels, Hong Kong stocks outperforming A-shares with hotspots concentrated in innovative drugs, etc., and weak commodity demand but optimism about gold. Corresponding expectation gaps are: tariff impacts on fundamentals have lagged effects; U.S. Treasury rates may have phased downward opportunities in the second half of the year; if fundamental data slows more than expected, the bond market may still see trading opportunities; correction risks in hotspots like innovative drugs are rising, and the AH premium may stabilize; geopolitical conflicts push up oil prices, making supply-scarce resources strategically valuable.  

#### Domestic Macro  

- Beijing issued support measures to promote the high-quality development of the game and esports industry, driving deep integration of technologies such as artificial intelligence and AIGC with the game and esports industry. The *Support Measures (Interim) for Promoting the High-Quality Development of Beijing's Game and Esports Industry* issued by the Beijing Municipal Party Committee Propaganda Department and others proposes that for boutique game projects approved by the National Press and Publication Administration and officially launched for the first time in the previous year, upon evaluation, game R&D and operation enterprises will receive a maximum reward of ¥5 million.  

#### Domestic Companies  

- Labubu prices start to fall, with scalpers' purchase prices halved.  

- Wall Street keeps an eye on "Laopu Gold": Goldman Sachs focuses on the "June 27 lock-up expiration", while Morgan Stanley focuses on the "first overseas store". Goldman Sachs is aggressively bullish on Laopu Gold, sharply raising its 12-month target price from HK$976 to HK$1,090 and maintaining a buy rating. Morgan Stanley cautiously gives a neutral rating with a target price of HK$865, believing that the Singapore store opening between June 20 and 30 will directly affect market confidence in Laopu Gold's overseas expansion capabilities.  

- BYD accelerates its entry into the European hinterland, with sales quadrupling in four months. According to Dataforce, BYD's European sales in the first four months of 2025 nearly quadrupled, largely due to strategic shifts: launching smaller, cheaper models to attract young buyers, taking over import operations for flexibility in adjusting product portfolios, and rapidly expanding hybrid vehicle lineups.  

- JD Coin Chain CEO: JD stablecoin is expected to obtain a license in Q4, pegged to the Hong Kong dollar and other currencies. As a former core member of "WeChat Pay", Liu Peng, CEO of JD Coin Chain, said he senses a "feeling" similar to the eve of the mobile payment boom—in his view, payment-type stablecoins will serve as new financial infrastructure in the Web3 era, playing a "disruptive" positive role in scenarios like international trade. He revealed that JD Coin Chain's scenario testing in the "sandbox" is progressing smoothly, planning to launch stablecoins pegged to the Hong Kong dollar and other currencies.  

- Haitian Flavor Industry's stock price unexpectedly broke below the issue price after raising HK$10 billion, with 400,000 IPO subscribers left empty-handed! On its listing first day, Haitian Flavor Industry's stock initially rose nearly 5% but later fell below the issue price. The company's Hong Kong IPO saw over 390,000 subscriptions with a low lottery rate, setting a new high for Hong Kong IPO subscriptions this year, exceeding those of "Ningwang" (CATL) and "Yaowang" (innovative drug giants). In the early-year Hurun Global Rich List, "Soy Sauce Queen" Cheng Xue ranked 774th with a net worth of ¥33.5 billion.  

#### Overseas Macro  

- "New Fed News Agency": Powell is saying "We don't know, so we wait". Timiraos said that as more employment and inflation data emerge, it will become clearer whether the Fed will take action. According to Powell's "data-dependent" stance, if summer prices rise sharply due to tariffs, the Fed may continue to观望; but if tariff impacts are less severe than expected, and the job market cools further with "clear weakness", rate cuts may come earlier.  

- Bridgewater on the U.S. economy: Recession risks have decreased, but growth headwinds remain strong. Bridgewater believes the U.S. consumption slowdown is no longer limited to areas directly affected by tariffs, with service categories like travel, entertainment, and dining also showing weakness, indicating the slowdown is spreading, though a sharp decline is unlikely. Additionally, the Trump administration proposed cutting fiscal deficits to guide interest rates lower and "re-privatize the economy". However, this "relay" from the public to private sector seems increasingly difficult to achieve.  

- Howard Marks' latest memo: From tariffs, deficits to social security, abandoning "economic laws" will come at a cost. Marks argues that the economy is like an organism following internal laws (such as supply-demand and incentives). When governments try to intervene in these laws through legislation, they often bring unexpected negative consequences. Tariffs are also seen as government intervention: while aimed at protecting U.S. domestic industries, they cause price hikes, product quality declines, and ultimately harm consumer interests and global economic efficiency.  

- The "ghost" of negative interest rates returns: The Swiss National Bank cuts rates to zero, hinting at further easing to stop capital inflows. The Swiss National Bank announced a 25-basis-point rate cut to zero on Thursday, ending more than two and a half years of positive rates and setting the lowest benchmark rate among major central banks. Concerns about Trump's policies have pushed the Swiss franc to a decade-high against the dollar in the past quarter. The central bank hinted it is ready to take further action if necessary to stop the franc's continued strengthening.  

- Gold "stagflation" = new high for platinum? Platinum breaks the $1,300 mark, up 45% this year. After gold prices hit record highs, investors are seeking opportunities further down the value chain. Driven by "gold fatigue" and surging Chinese jewelry demand, platinum prices have soared to a five-year high.  

- Colombia accepted as a member of the BRICS New Development Bank. On June 19 local time, Colombian Foreign Minister Saravia confirmed that Colombia has been accepted as a member of the BRICS New Development Bank, which will broaden new development opportunities for Colombia, according to Saravia.  

#### Overseas Companies  

- "Layoff tide" sweeps through U.S. giants. Procter & Gamble cuts 15% of non-production line employees, Estée Lauder and Match cut 20% of managers, Bank of America reduces management levels from 13 to 7, and Microsoft also plans to lay off thousands. What's unique about this layoff wave is that it's not driven by falling performance—U.S. corporate profits even hit record highs at the end of last year. Instead, in the AI era, more companies prioritize efficiency and "doing more with fewer people".  

- Microsoft threatens: If talks with OpenAI don't work out, we'll stop. According to reports, insiders said Microsoft has considered directly terminating complex negotiations if the two sides can't agree on key issues, including core interests like how much stake Microsoft should hold in OpenAI's future structure. If negotiations collapse, Microsoft will rely on existing commercial contracts to maintain access to OpenAI's technology until 2030.  

- Meta CFO Susan Li: Born in Chengdu, raised in the U.S., from "Wall Street prodigy" to "big tech CFO". Susan Li said for companies like Meta, EBITDA isn't the ultimate financial metric—free cash flow and capital expenditure are more important. Not every bet must succeed; if you only reject projects that don't look good on paper, you'll never make important bets.  

- From social media to a financial "super app": Musk's X platform will launch investment and trading services. Reports say X, formerly Twitter, will roll out a "super app" offering investment and trading services and is exploring introducing credit or debit cards. As the first step in its financial services layout, X has announced the launch of X Money—a digital wallet and peer-to-peer payment service—with Visa as its first partner.  

- Car manufacturers raise prices to protect profits, making each car nearly $2,000 more expensive, and U.S. consumers will foot the bill for tariffs. Consulting firm AlixPartners predicts U.S. automakers will pass 80% of tariff costs to consumers, meaning prices will rise by about $1,760 per vehicle, leading to an estimated 1 million fewer U.S. car sales over the next three years. More crucially, the shadow of reduced EV incentives will harm U.S. automakers' competitiveness.  

- Luxury giant LVMH faces its worst crisis in history, with stock price halved, core growth engines stalling, and succession problems. LVMH is undergoing an unprecedented crisis: Chairman Bernard Arnault has fallen from the world's richest person to 10th place, the group's market value has evaporated about €221 billion, and it faces shrinking global demand and U.S. tariff threats. Core brand Dior is growing sluggishly, the wine division is laying off staff, the drawbacks of its diversified "general store" model are emerging, and succession issues have brought "governance discounts" to the group.  

- NBA dynasty changes hands: Los Angeles Lakers sold for $10 billion, setting the highest sports transaction record. The Buss family, which has owned the Lakers since 1979, agreed to sell the legendary team to Mark Walter, CEO of Guggenheim Partners and a sports investor, at a valuation of $10 billion. This makes the Lakers the most valuable team in professional sports history, far exceeding the $6.1 billion sale of rival Boston Celtics earlier this year.  

#### Sectors/Concepts  

1. 3D printing: Compared with traditional industrial-grade equipment, consumer-grade 3D printers have obvious advantages in size, cost, and operation complexity. Dongwu Securities points out that with the rapid development of cultural creativity and trendy play industries, demand for consumer-grade 3D printers is strong, allowing users to print DIY trendy shoe accessories, fashion toys, and realize original design ideas with 3D printers.  

2. Gas turbines: Guohai Securities' research report notes that global demand for gas turbines and aero-engines has surged, with OEMs having full orders and accelerating deliveries, driving up demand for core components like high-temperature alloys. Constrained by overseas capacity bottlenecks, the supply chain is accelerating its shift to China, presenting important opportunities for China's high-temperature alloy export chain.  

3. Copper interconnects: Industrial Securities states that in the next-generation 448G interconnection scheme, copper interconnects still have strong competitiveness, with shipments expected to maintain high growth next year. Meanwhile, the ASIC market is accelerating the outbreak of AEC demand, likely to recreate a copper interconnect market.  

4. Photoinitiators: Changjiang Securities points out that recently, frequent supply-side disruptions have occurred in the photoinitiator industry: Yangfan New Materials' Jiangxi subsidiary was ordered to suspend production and business for rectification due to a fire accident, and important producer Ningxia Wokailong is facing operational difficulties. The photoinitiator industry has a high concentration, and with continuous demand growth in recent years and frequent recent supply disruptions, prosperity is expected to recover.  

#### Preview of Today's Key News  

- China's June 1-year and 5-year Loan Prime Rates (LPR).  

- Japan's May CPI.  

- Speech by Bank of Japan Governor Kazuo Ueda.  

- Germany's May PPI.  

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