Morning News

Source: Wall Street Journal  

**Market Overview**  

Last Friday, talks between Iranian and European officials failed to break the deadlock, and the "triple witching day" left U.S. stocks struggling to rebound. The S&P 500 and Nasdaq turned lower during the session, while Apple rose over 2%, narrowly supporting the Dow to close in positive territory. Chip stocks fell due to negative news. Stablecoin leader Circle surged 20%. Fed Governor Waller's dovish remarks led to a drop in U.S. Treasury yields during the session. Reports of Iran possibly limiting uranium enrichment caused Brent crude to plunge over 4% at one point, though it still posted gains for the third consecutive week. Gold hit a one-week low intraday, marking its first weekly decline this month.  

In early Asian trading on Monday, international crude oil prices surged, with Brent crude up 5.7% at one point, spot gold rising 0.8%, and U.S. stock futures falling, with Dow futures down over 100 points.  

**Key News**  

- **Trump**: If the Fed cuts rates to 1%-2%, the U.S. could save $1 trillion a year, and he might reconsider firing Powell.  

- **Fed officials openly divided**: Governor Waller suggested a rate cut as early as July, San Francisco Fed President expects cuts this fall, while Richmond Fed President sees no urgency to act.  

- **U.S. attacks three Iranian nuclear facilities**, deploying B-2 bombers and 14 massive bunker-buster bombs. Trump claimed Iran's key nuclear facilities were "completely destroyed" and Fordow no longer exists, warning of more targets if Iran does not pursue peace. However, U.S. officials said the B-2 did not fully destroy Fordow. Secretary of State Pompeo stated the U.S. is ready for talks with Iran on the 23rd, calling the closure of the Strait of Hormuz "suicidal" for Iran.  

- **Iran launches "retaliatory strikes"**, firing its "most destructive" new missiles at Israel for the first time, claiming only the above-ground part of Fordow was damaged and vowing to target all U.S. interests in the Middle East. Iran's parliament endorsed closing the Strait of Hormuz, while Yemen's Houthi rebels announced renewed attacks on U.S. vessels.  

- **Iran's foreign minister arrived in Russia on Sunday**, stating he would meet with Putin on Monday.  

- **China's Foreign Ministry**: Strongly condemns the U.S. attack on Iran, urging conflict parties, especially Israel, to cease fire, ensure civilian safety, and begin dialogue.  

- **Cross-border payment system between mainland China and Hong Kong** launched on June 22.  

- **Reports**: The U.S. pressures Europe for "unilateral concessions," with the best-case scenario being "an agreement in principle, with talks extended."  

- **Reports**: The Trump administration suddenly demands Japan increase defense spending, leading Japan to cancel high-level talks with the U.S. Japan's trade representative: U.S.-Japan negotiations "in a fog," July 9 is important but not a deadline.  

- **Musk**: Too much spam; plans to rewrite human knowledge base with Grok 3.5 and retrain models accordingly.  

**Market Closing Prices**  

- **Global Stocks**:  

 - S&P 500: -0.22% to 5,967.84, down 0.15% weekly.  

 - Dow Jones Industrial Average: +0.08% to 42,206.82, up 0.02% weekly.  

 - Nasdaq: -0.51% to 19,447.41, up 0.21% weekly.  

 - Europe STOXX 600: +0.13% to 536.53, down 1.54% weekly.  

- **A Shares**:  

 - Shanghai Composite: -0.07% to 3,359.90.  

 - Shenzhen Component: -0.47% to 10,005.03.  

 - ChiNext: -0.84% to 2,009.89.  

- **Bond Markets**:  

 - 10-year U.S. Treasury yield: ~4.38%, down ~1 bp intraday, ~2 bps weekly.  

 - 2-year U.S. Treasury yield: ~3.91%, down ~3 bps intraday, ~4 bps weekly.  

- **Commodities**:  

 - WTI July crude: -0.28% to $74.93/barrel, up 2.67% weekly.  

 - Brent August crude: -2.33% to $77.01/barrel, up 3.74% weekly.  

 - COMEX August gold: -0.66% to $3,385.7/oz, down 1.94% weekly.  

 - COMEX July silver: -2.43% to $36.017/oz, down 0.93% weekly.

### Key News Details  

#### Global Highlights  

- **China’s June LPR Rates Unchanged**: The 1-year LPR remains at 3.0%, and the 5-year LPR at 3.5%. Analysts suggest further cuts are possible amid external uncertainties and efforts to stabilize the property market.  

- **China’s Homegrown "Weight-Loss Miracle Drug"**: Ecnoglutide, developed by Sciwind Biosciences, shows impressive Phase III results with 15.1% weight loss over 48 weeks, rivaling Eli Lilly’s drugs. Approval is expected in early 2026.  

- **Trump on Fed Rate Cuts**: Claims lowering rates to 1%-2% could save the U.S. $1 trillion annually and hints at possibly firing Powell.  

- **Fed Officials Divided on Rate Cuts**: Governor Waller suggests cuts as early as July, while Richmond Fed’s Barkin urges caution, and San Francisco Fed’s Daly eyes autumn. Waller’s stance aligns closely with Trump’s demands, sparking speculation about his future as Fed Chair.  

- **Iran-Israel Tensions Escalate**:  

 - **U.S. Strikes Iranian Nuclear Facilities**: Trump announces destruction of three sites, including Fordow, though U.S. officials admit partial damage. Iran vows retaliation, targeting U.S. interests in the Middle East.  

 - **Diplomatic Efforts Stall**: Iran insists on a Gaza ceasefire as a precondition for talks, while Europe pushes for a nuclear deal.  

 - **Regional Fallout**: Iraq threatens to block the Strait of Hormuz; Russia warns against U.S. intervention; Israel prepares for prolonged conflict.  

- **Market Reactions**: Brent crude briefly plunged 4.2% on reports of Iran considering uranium enrichment limits but closed the week up 3.74%. Gold fell for the first time this month.  

#### Domestic (China)  

- **Cross-Border Payment System Launched**: Connects mainland China and Hong Kong for real-time remittances.  

- **Fiscal Data (Jan-May)**: Public revenue dipped 0.3% YoY, while spending rose 4.2%. Securities stamp tax revenue surged 52.4%.  

- **Policy Support for Consumer Upgrades**: Additional subsidies of 138 billion yuan will be rolled out in H2 to boost trade-ins of durable goods.  

- **Crackdown on Misinterpretations**: State media warns against conflating anti-corruption campaigns with normal business dining.  

- **Regulating Blind Boxes**: Experts call for stricter age verification to protect minors from excessive spending on collectibles.  

- **Huawei’s HarmonyOS 6 Debuts**: Features AI-driven upgrades, including an enhanced virtual assistant and seamless cross-device integration. Over 3,000 apps are being adapted for the OS.  

#### International  

- **Fed’s Semi-Annual Report**: Labor market deemed "balanced," with policymakers adopting a wait-and-see approach.  

- **U.S. Tightens Student Visa Scrutiny**: Requires social media account access, drawing criticism from China.  

- **Japan’s Inflation Hits 2023 High**: Core CPI rose to 3.7% in May, driven by soaring rice prices (up 101.7%). Pressure mounts for BOJ rate hikes despite economic fragility.  

- **Japan Cuts Long-Term Bond Issuance**: Plans to reduce issuance by 3.2 trillion yen ($220B), exceeding market expectations.  

#### Corporate  

- **OpenAI Exposé**: Accused of shifting from "benefiting humanity" to "serving investors," with CEO Altman allegedly evading oversight.  

- **Musk’s AI Warnings**: Predicts superintelligence by 2025-26, dwarfing cryptocurrencies like Dogecoin. Plans to rebuild knowledge bases using Grok 3.5/4.  

- **Bitcoin as Corporate Reserves**: Public companies now hold 3% of Bitcoin’s supply (~$87B), led by MicroStrategy’s 592,100 BTC.  

- **Irish Pharma Boom**: U.S. imports of weight-loss drug ingredients from Ireland hit $36B in Jan-Apr, doubling 2023’s total and skewing trade balances.  

- **U.S. Solar Industry Crisis**: Trump’s subsidy cuts trigger bankruptcies, with demand projected to drop 50-60%.  

- **Apple Eyes AI Search Startup Perplexity**: Considering acquisition or partnership to reduce reliance on Google.  

#### Sector Trends  

1. **Cobalt**: Congo’s export ban may cut global supply by 100,000 metric tons, tightening Chinese markets.  

2. **Cross-Border Payments**: Innovations like China-HK "Payment Connect" and stablecoins are reshaping transactions.  

3. **Brain-Computer Interfaces (BCIs)**: Poised to revolutionize healthcare, education, and industrial applications.  

4. **HarmonyOS & AI Agents**: Huawei’s OS advances could redefine mobile interactions via voice-controlled AI assistants.  

5. **Medical Devices**: Trends toward smart, high-end globalization, driven by tech breakthroughs like quantum sensors.  

6. **AI in Manufacturing**: Smart factories are transitioning from automation to cognitive systems, fueled by policy support.  

### Upcoming Events  

- Meeting between Iran’s Foreign Minister and Putin.  

*Disclaimer: Views expressed are solely the author’s and do not constitute investment advice. Accuracy, completeness, or timeliness of information is not guaranteed, and no liability is assumed for losses arising from reliance on this content.*