Morning News

Source: Wall Street Journal  
Market Overview  
Comments from Fed officials, including Waller, fueled market expectations for rate cuts, leading to simultaneous gains in U.S. stocks and bonds, as well as rebounds in gold and oil.  

The Nasdaq rose nearly 3%. Tesla, Nvidia, Microsoft, and Amazon all closed up over 3%. After earnings, Procter & Gamble, which lowered guidance, fell nearly 4%, while Google surged over 5% in after-hours trading. The China-concept index initially fell 1.5% before turning positive, marking its fourth consecutive day of gains.  

Following remarks from Fed officials, U.S. Treasury yields accelerated their decline. The two-year Treasury yield and the U.S. dollar index retreated from one-week highs. Offshore yuan fell nearly 200 points intraday, breaching 7.30. Bitcoin traced a V-shaped recovery.  

Crude oil rose over 1% intraday, while gold surged more than 2% at one point.  

During Asian trading hours, the Shanghai Composite Index edged up 0.03% after a mid-session pullback, with shares of the Big Three banks (ICBC, ABC, and BOC) hitting record highs. The Hang Seng Tech Index fell over 1%, while biopharmaceutical stocks bucked the trend to rise. Government bond futures declined across the board.  

Key News  
Foreign Ministry: China and the U.S. have not engaged in talks or negotiations on tariffs, let alone reached any agreement. CCTV reported that Trump is considering a tiered tariff plan for China.  

Fed Governor Waller: A severe downturn in the job market could prompt the Fed to cut rates more and faster. Fed official Hammack suggested action could be taken as early as June if clear, convincing data emerges.  

Japan’s finance minister confirmed with the U.S. that exchange rates are market-determined, while Japan is reportedly considering increasing purchases of U.S. soybeans. U.S. Treasury Secretary Yellen expects a trade agreement with South Korea next week, boosting South Korean ETFs. Germany’s finance minister stated both the U.S. and EU are willing to negotiate a trade deal.  

Citadel CEO Griffin: Trump’s trade war is "pointless," damaging the reputation of U.S. assets and making Americans poorer.  

The U.S. Treasury’s 7-year bond auction was weak, with overseas demand again the issue.  

Musk and Treasury Secretary Yellen engaged in a heated exchange, with expletives flying.  

Google’s ad business remained strong, with net profit soaring 46%. The company announced a $70 billion stock buyback, sending shares up 6% after hours.  

Intel’s Q1 revenue beat expectations, but its Q2 guidance disappointed. The company cut its full-year capital expenditure target, causing shares to drop over 6% after hours.  

Are data center projects slowing? Amazon denied it, and Nvidia backed them up, saying they only see growing AI power demand.  

Tesla’s outlook: JPMorgan called it worse than expected, setting a $115 target; Morgan Stanley remained bullish at $410, citing Musk’s renewed focus.  

Market Close  
U.S. & European Stocks: Dow +1.23%, S&P 500 +2.03%, Nasdaq +2.74%. Europe’s STOXX 600 +0.36%.  
Chinese Stocks: Shanghai Composite +0.03%, Shenzhen Component -0.58%, ChiNext -0.68%.  
Bonds: U.S. 10-year yield -7.41 bps to 4.3071%; 2-year yield -8.40 bps to 3.7868%.  
Commodities: WTI June crude +0.83% to $62.79/barrel; Brent June crude +0.65% to $66.55. COMEX gold +1.87% to $3,355.80/ounce.  

Key Details  
Global Highlights  
Foreign Ministry: No China-U.S. tariff talks or negotiations are underway, and no agreement has been reached.  
Trump is reportedly considering a tiered tariff plan for Chinese goods, with rates potentially ranging from 35% to over 100%.  
Fed’s Waller signaled openness to rate cuts if the labor market weakens significantly, boosting stocks.  
Japan’s finance minister confirmed market-determined FX rates with the U.S., while Japan may buy more U.S. soybeans.  
Citadel’s Griffin criticized Trump’s trade war as "pointless," harming U.S. assets and living standards.  
The U.S. 7-year bond auction saw weak overseas demand, raising concerns.  
Musk and Yellen clashed publicly, trading insults.  
Google’s Q1 profit jumped 46%, with a $70 billion buyback announced. Shares rose 6% after hours.  
Intel beat Q1 revenue estimates but gave soft Q2 guidance, cutting its capex target. Shares fell 6% after hours.  
Tesla’s outlook split analysts: JPMorgan set a $115 target, while Morgan Stanley stayed bullish at $410.  

Domestic Highlights  
China’s central bank injected 500 billion yuan via MLF, maintaining a loose policy stance.  
At the Shanghai Auto Show, Goldman highlighted Robotaxi advancements, domestic chips, and smart cockpits.  
Hengrui Pharma’s Q1 net profit rose 36.9%, boosted by ADC drug licensing fees.  
“Pork leader” Muyuan Foods returned to profit in Q1, with revenue up 37.26%.  
Tonghuashun’s Q1 revenue rose 20.9%, with operating cash flow surging 720%.  

Overseas Economy  
U.S. initial jobless claims met expectations at 222K, while continuing claims fell to 1.84 million, the lowest since January.  
U.S. March durable goods orders rose 9.2%, the biggest gain in 8 months, but capital goods orders stalled amid tariff concerns.  
U.S. existing home sales posted their steepest March drop since 2009, with median prices hitting a record high.  
Deutsche Bank warned that markets are underpricing a U.S. recession, leaving room for a sell-off.  
Japan saw record foreign inflows in April, with bonds attracting the most interest since 1996.  
Gold’s recent dip was attributed to dollar strength and tariff overreactions, but physical demand in China remains strong.  

Overseas Companies  
Trump hosted a “Trump Coin holders’ dinner,” offering exclusive access to top holders. The token surged.  
P&G slashed its full-year guidance as U.S. consumers cut spending, sending shares down 3.7%.  
SK Hynix’s Q1 profit soared 158%, but analysts warned of hidden tariff risks.  
Newmont Mining’s Q1 profit surged nearly 11-fold on higher gold prices.  
Adidas posted its best-ever Q1, with operating profit nearly doubling, outperforming Nike.  

Sectors/Themes  
1. Electronic Skin: Growth is rapid, with applications expanding in humanoid robots.  
2. Outdoor Economy: A rising lifestyle trend in China, supported by policy and social media.  
3. Small Appliances: Valuations are low, with Q2 margins expected to rebound.  
4. Coal: Undervalued as a high-dividend sector, attracting renewed interest.  

Upcoming Events  
Tokyo CPI for April.  
U.S. Michigan Consumer Sentiment and Inflation Expectations for April.  

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