Morning News

Source: Wall Street Journal  

**Market Overview**  

Last Friday, improved prospects for agreements between the U.S. and EU economies boosted risk appetite, with the S&P 500 and Nasdaq hitting record highs. However, renewed tensions in U.S.-Canada trade relations caused both indices to briefly turn negative during the session. Optimism about the U.S.-EU agreement drove European auto stocks up over 4%. After Trump terminated U.S.-Canada negotiations, the Canadian dollar hit a daily low, while the U.S. dollar index rebounded from a three-year low, still posting its largest weekly drop in five weeks. Crude oil fell more than 10% for the week, marking its biggest weekly drop in two years. Gold lost nearly 3% for the week, its largest weekly decline in six weeks.  

In early Asian trading on Monday, U.S. stock futures opened slightly higher, with Dow futures up 0.3%. Spot gold fell below $3,250, hitting a one-month low.  

**Key News**  

- **China’s Q2 Monetary Policy Committee Meeting**: The People's Bank of China emphasized implementing a moderately loose monetary policy, strengthening countercyclical adjustments, and flexibly managing the pace and intensity of policy measures amid rising trade barriers.  

- **China’s Commerce Ministry**: Recent discussions between China and the U.S. further clarified the framework details of the Geneva consensus. China will lawfully review export applications for controlled items that meet conditions, while the U.S. will correspondingly lift a series of restrictive measures against China.  

- **China’s Industrial Profits (Jan-May)**: Profits at large industrial firms fell 1.1% YoY, with May alone down 9.1%.  

- **Global First BeiDou-Priority Multi-Frequency High-Precision Chip Launched**: China’s BeiDou chip technology enters the 2.0 era.  

- **Trump Criticizes Canada’s Digital Tax**: Terminates all U.S.-Canada trade talks, threatens new tariffs, and halts negotiations until Canada removes certain taxes. U.S. Treasury Secretary warns of a Section 301 investigation. The EU and U.S. believe a tariff agreement can be reached by the July deadline. The Treasury Secretary hinted the July "tariff deadline" might be extended to September 1, while Trump said the suspension period could be lengthened or shortened.  

- **Trump Works Over the Weekend**: U.S. Congress races toward a "July 4 deadline." The Senate passed the "Big Beautiful" bill in a procedural vote by a narrow two-vote margin. Republican senators predict a final vote on Monday, June 30.  

- **Musk Criticizes "Big Beautiful" Bill Again**: Calls it destructive to future U.S. industries and jobs, "political suicide for Republicans." Trump: "Musk is a great guy, but his comments are inappropriate."  

- **Trump on Fed Chair Pick**: Will select someone who favors rate cuts, calls Powell "foolish" for keeping rates artificially high, says U.S. rates should be 1% or 2%. Besant downplays early nomination.  

- **Fed’s Favorite Inflation Gauge Rises Moderately**: May core PCE price index up 0.2% MoM, while consumer spending saw its biggest drop since early this year.  

- **Trump on Iran**: Accuses Khamenei of lying, says Iran has abandoned efforts to lift sanctions, and warns of potential renewed airstrikes over uranium enrichment.  

- **Tech Giants’ "De-NVIDIA-ization" Faces Reality Check**: Microsoft delays AI chip mass production to 2026.  

- **NVIDIA Execs Cash Out**: Led by Jensen Huang, NVIDIA executives have sold over $1 billion in shares in the past year, with more than half the transactions occurring this month.  

**Market Close**  

- **U.S. & European Stocks**:  

 - S&P 500: +0.52% to 6,173.07, +3.44% weekly.  

 - Dow: +1% to 43,819.27, +3.82% weekly.  

 - Nasdaq: +0.52% to 20,273.46, +4.25% weekly.  

 - Europe’s STOXX 600: +1.14%, +1.32% weekly.  

- **A-Shares**:  

 - Shanghai Composite: -0.7% to 3,424.23.  

 - Shenzhen Component: +0.34% to 10,378.55.  

 - ChiNext: +0.47% to 2,124.34.  

- **Bonds**:  

 - 10-year U.S. Treasury yield: ~4.28%, +4 bps daily, -10 bps weekly.  

 - 2-year U.S. Treasury yield: ~3.75%, +4 bps daily, -16 bps weekly.  

- **Commodities**:  

 - WTI August crude: +0.43% to $65.52/barrel, -11.3% weekly.  

 - Brent August crude: +0.06% to $67.77/barrel, -12% weekly.  

 - COMEX August gold: -1.8% to $3,287.6/oz, -2.9% weekly.

### Key News Details  

#### **Global Highlights**  

**China’s Q2 Monetary Policy Committee Meeting**:  

The People's Bank of China (PBOC) emphasized implementing a **moderately loose monetary policy** and strengthening **countercyclical adjustments**. The meeting noted that the external environment has become more complex, global growth momentum has weakened, and trade barriers are increasing. The PBOC proposed enhancing the **intensity, foresight, and effectiveness** of monetary policy adjustments while flexibly managing the **pace and intensity** of policy implementation.  

- **Key Change**: The phrase "timely RRR and interest rate cuts" was removed from the Q2 statement, replaced with "flexibly adjust policy implementation."  

- **Consistency**: The PBOC maintained its stance on "keeping monetary policy **appropriately accommodative**" while emphasizing the need to **improve transmission mechanisms** and **prevent financial arbitrage**.  

**U.S.-China Rare Earths Deal**:  

The U.S. claims China will **accelerate rare earth exports**, while the U.S. will **lift certain restrictions** on China. China’s Commerce Ministry confirmed that both sides have finalized framework details following talks in London. China will **legally review export applications** for controlled items, while the U.S. will **remove corresponding restrictions**.  

**China’s Industrial Profits (Jan-May)**:  

- **Overall**: Profits fell **1.1% YoY**, with May alone down **9.1%**.  

- **Reasons**: Weak demand, declining industrial prices, and short-term volatility.  

- **Analysis (Tao Chuan, Minsheng Securities)**: The drop stems from **falling PPI** and **shrinking profit margins**, partly due to **tariff costs** and supply chain adjustments.  

**BeiDou 2.0 Chip Launched**:  

China unveiled the world’s first **BeiDou-priority multi-frequency high-precision chip**, marking its entry into the **2.0 era**. Developed by **Mengxin Technology**, it will be used in **robotics, autonomous driving, and surveying** this year.  

**Trump Terminates U.S.-Canada Trade Talks Over Digital Tax**:  

- Trump accused Canada of a "**blatant attack**" on U.S. tech firms by imposing a **digital services tax**, mirroring the EU.  

- He threatened **new tariffs** and halted negotiations until Canada drops the tax.  

- **U.S. Treasury Secretary** warned of a **Section 301 investigation**, suggesting retaliatory tariffs could last longer.  

**Canada’s Massive U.S. Asset Selloff**:  

- **Deutsche Bank**: Canada sold **$90B in U.S. assets** in April—a historically rare move.  

- **Implications**: If linked to trade tensions, other nations might follow, weakening the **dollar’s dominance**.  

**U.S. Tariff Deadline May Extend to Sept 1**:  

- **Treasury Secretary** hinted the **July deadline** for EU/U.S. tariffs could be pushed to **September 1**.  

- **Trump**: The suspension period is **flexible**—could be extended or shortened.  

- **EU Confidence**: Brussels believes a deal can be reached by July to avoid escalation.  

**Trump vs. Fed**:  

- **Trump** wants a **Fed Chair who favors rate cuts**, calling Powell "**stupid**" for keeping rates high.  

- He suggested the **U.S. rate should be 1-2%** (vs. current **4.25-4.5%**).  

- **Treasury Secretary** downplayed an early nomination, signaling a decision by **Oct/Nov**.  

**Fed’s Kashkari: First Rate Cut Likely in September**:  

- Warned that **tariffs** remain the biggest uncertainty, with potential lagging inflation effects.  

- Businesses are **hesitant to pass on tariff costs** but may have to if no deal is reached.  

**U.S. Senate Advances "Big Beautiful" Bill**:  

- Passed a **procedural vote** by a **narrow 2-vote margin**.  

- **Final vote expected Monday (June 30)**.  

- **Musk Criticized**: Called it "**Republican political suicide**," harming EVs and clean energy.  

- **Trump defended Musk** but disagreed with his stance on EV mandates.  

**Fed’s Core PCE Rises, Spending Drops**:  

- **May Core PCE**: +0.2% MoM (slightly above expectations).  

- **Consumer Spending**: Fell **0.3%**, the steepest drop this year.  

**Trump vs. Iran**:  

- Accused **Khamenei of lying** about sanctions relief efforts.  

- Threatened **new airstrikes** if Iran resumes uranium enrichment.  

- **Iran’s "Victory Narrative"**: Khamenei framed the Israel-U.S. standoff as a win to bolster national pride.  

**Tech & Markets**:  

- **Microsoft’s AI Chip Delayed to 2026**, lagging behind NVIDIA.  

- **NVIDIA Execs Sold $1B+ in Stock**, with over half the sales this month.  

#### **Domestic Macro**  

- **State Council**: Strengthen **corporate innovation**, deepen **tech commercialization reforms**.  

- **He Lifeng (Financial Regulator)**: Emphasized **high-quality Party-building** to boost financial sector development.  

#### **Domestic Companies**  

- **Goldman Sachs Raised Targets for Xiaomi & CATL**:  

 - **Xiaomi’s SU7 EV**: Strong pre-orders solidify its premium market position.  

 - **AI Glasses**: Compared to **2017’s TWS earbuds boom**, with 10% market share expected by 2025.  

 - **CATL’s Qilin Battery**: Expected to regain growth, boosting profitability.  

- **ST Stock Reforms**:  

 - **Price limits widened from 5% to 10%** (matching mainboard stocks).  

 - Aims to improve liquidity while urging investor caution.  

#### **Overseas Macro**  

- **U.S. Treasury Secretary**: Praised the **fastest stock rebound in history**.  

- **David Rosenberg (Strategist)**: Warned of an **impending recession**, calling stocks **"overvalued"**.  

- **BofA’s Hartnett**: Fed rate cuts and tax reforms could fuel a **stock bubble**.  

- **OPEC+ May Boost Output**: Saudi Arabia pushes for **market share recovery**, pressuring oil prices.  

#### **Overseas Companies**  

- **GPT-5 Leaks**:  

 - OpenAI employees hint at a **July launch**, featuring **full multimodal capabilities** (voice, image, video).  

 - ChatGPT shows unusual "thinking" behaviors, possibly due to testing.  

- **U.S. AI Energy Push**:  

 - **Executive order expected** to support **data center power supply**, boosting chip and nuclear stocks.  

#### **Sector/Thematic Highlights**  

1. **Computing Power**: Shift from **hardware** to **operational services** (e.g., leasing, cloud inference).  

2. **Brain-Computer Interface (BCI)**: Global market to hit **$3.3B by 2027**, with China as a key player.  

3. **Humanoid Robots**: **2025** could mark the start of mass production, benefiting electronics firms.  

4. **BeiDou**: Core industry value to exceed **¥1.2T by 2030**, driven by **autonomous driving** and **low-altitude logistics**.  

5. **Exhibitions**: China’s market to lead emerging economies, targeting **¥3T by 2030**.  

#### **Upcoming Events**  

- **China’s June Manufacturing PMI** (Monday).  

- **ECB Forum** (June 30 – July 2, Sintra).  

- **U.S. Senate "Big Beautiful" Bill Vote** (Possible Monday).  

*Disclaimer: Views expressed are solely the author’s and do not constitute investment advice. No guarantees are made regarding accuracy, completeness, or timeliness. The platform assumes no liability for losses arising from reliance on this information.*