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- **Commodities**: WTI August crude +0.03% to $68.35/barrel; Brent September crude +0.06% to $70.19/barrel; COMEX gold +0.18% to $3,322.80/oz.
**Key News Details**
**Global Highlights**
China's June CPI rose 0.1% year-on-year, with core CPI hitting a 14-month high, while the PPI decline widened to 3.6%. The year-on-year CPI growth turned positive after four consecutive months of decline, mainly driven by a rebound in industrial consumer goods prices. The PPI month-on-month decline remained unchanged from the previous month, with prices in some industries showing signs of stabilization and recovery.
Reasons for the lower-than-expected June PPI: Guo Lei of GF Securities suggests two possible factors: first, discrepancies between high-frequency data and official statistics; second, weak pricing in mid- and downstream industries not fully captured by high-frequency data. June data indicates multiple factors influencing prices, including supply-demand fundamentals, fluctuations in external demand, commodity price volatility, and platform promotions. Looking ahead to the second half of the year, two key factors will be critical: whether local project construction activity rebounds (as it underpins prices in construction and certain manufacturing sectors) and the effectiveness of "anti-involution" measures, which could amplify positive effects through expectations.
Trump's second wave of tariff letters targets eight countries, with Brazil facing the highest proposed rate of 50%. Trump announced that starting August 1, the U.S. will impose a 20% tariff on Philippine products, 25% on Brunei and Moldova, and 30% on Algeria, Iraq, Libya, and Sri Lanka. The proposed 50% tariff on Brazil far exceeds the previous reciprocal 10% tariff, which Trump attributed to unsustainable trade deficits and Brazil's trial of former President Bolsonaro. The Brazilian real fell nearly 3% at one point.
Why did Trump delay tariffs until August 1? Bessent needs more negotiation time. Trump initially planned for tariffs to take effect automatically, but Bessent claimed that trade agreements with partners like the EU and India were nearing completion and required more time, prompting Trump to reconsider. Although he confirmed no further extensions, markets still viewed the delay as another "TACO" (Tariff Announcement, Constant Overreaction). In recent months, Trump has repeatedly set tariff deadlines only to withdraw them at the last minute.
Reports: Under Trump's new agreement, EU tariffs may be higher than the UK's. The EU reportedly cannot secure the same tariff exemptions for key industries like steel and automobiles as the UK, receiving only limited exemptions in areas like aircraft and spirits. A diplomat noted, "The UK's deal is better, which is surprising given how long we've negotiated."
Trump threatens 50% copper tariffs, widening arbitrage windows. How will copper prices perform in the second half?
Goldman Sachs believes the market is pricing in a 60% probability that the 50% tariffs will be fully implemented.
JPMorgan expects the COMEX-LME copper arbitrage spread to widen from the current 25% to 50%, possibly even overshooting in the short term.
HSBC forecasts an average price below $9,000 in the second half, while JPMorgan predicts $9,100 in Q3 and a slight rebound to $9,350 in Q4. Goldman Sachs maintains its year-end LME copper price forecast of $9,700/ton, noting limited upside due to market tightness but also limited downside.
Trump's threat of 50% copper tariffs far exceeds the market's earlier expectation of around 25%. Morgan Stanley analysis suggests that the U.S. has stockpiled about 400,000 tons of "extra" copper inventory, equivalent to roughly six months of imports, which will cushion the immediate impact of tariffs. Additionally, tariff implementation could benefit COMEX copper prices, while the end of U.S. stockpiling may pressure LME prices.
**Fed Minutes**: Most officials believe tariffs may persistently raise inflation; a few are open to considering a rate cut at the next meeting. Nick Timiraos, known as the "Fed Whisperer," reported that at last month's meeting, uncertainty about the inflation outlook and pressure from the White House on Chair Powell led to divisions among officials. Most expect rate cuts to resume later this year.
**U.S. Treasury** releases key forecast, significantly reducing risks of a "bond issuance surge." The Treasury plans to increase its cash reserves from $313 billion on July 3 to $500 billion by the end of July and $850 billion by September. Analysts note that this cash-rebuilding strategy is more gradual and does not pose near-term issuance risks, instead reducing short-term supply.
**U.S. Media**: White House Chief of Staff calls Trump-Musk feud "very messy." The New York Post reported on the 9th that White House Chief of Staff Susie Wiles described the rift between Trump and Elon Musk as "very messy" but ultimately a "minor issue" for the administration.
Tesla bull Dan Ives urges limiting Musk's "political involvement"; Musk responds, "Shut up!" Tesla shares plunged after the "American Party" was formed, wiping out $68 billion in market value. Musk's political ambitions have raised widespread concerns, with Tesla bulls calling for constraints on his political activities. William Blair analyst and hedge fund Azoria Partners also expressed worries: Musk's return to politics during Tesla's critical transition period will only bring negative impacts.
CEO of Musk's X resigns. On Wednesday, X CEO Yaccarino announced her resignation. Her primary role was overseeing "business operations," particularly efforts to reassure advertisers amid major platform policy changes. While Yaccarino did not specify reasons, media reports citing sources say her departure had been in the works for over a week.
Nvidia's market cap briefly exceeds $4 trillion, making history. The next catalyst could be earnings season. Nvidia first hit a $1 trillion market cap in June 2023. Its stock has risen over 20% year-to-date and over 1,000% since early 2023. After bottoming in April, the stock has repeatedly hit new highs recently, buoyed by strong AI spending expectations from Microsoft and other tech giants. The upcoming earnings season is expected to confirm tech giants as the primary drivers of U.S. stock profit growth.
OpenAI to launch AI browser, directly challenging Google Chrome. Reports suggest OpenAI's browser could debut in weeks, integrating chat interfaces and AI agent functionality. If embraced by its 400 million weekly ChatGPT users, OpenAI could significantly disrupt Google's ad ecosystem, web data flows, and search traffic.
Amazon's bold Prime Day extension backfires. Amazon extended its annual Prime Day from two to four days this year, hoping to give shoppers more time to browse deals. But early results were disappointing, increasing pressure for the remaining days.
Hong Kong Jockey Club sells U.S. assets, plans to offload $1 billion in private equity funds, including stakes in Blackstone and Warburg Pincus. Amid escalating trade tensions, about 10 ultra-high-net-worth Asian family offices and advisory firms have reduced or paused U.S. market investments.
**Domestic Macro**
Zheng Shanjie: China has created "two miracles," curbing unhealthy trends during the 14th Five-Year Plan. National Development and Reform Commission head Zheng Shanjie noted that China completed industrialization in decades, a process that took Western countries centuries, creating the "two miracles" of rapid economic growth and long-term social stability, offering a new model for global modernization.
State Council: Further strengthen policies to stabilize employment. Expand the scope of special loans for job retention and creation, deepen government-bank cooperation, streamline processes, and improve loan accessibility. Increase unemployment insurance rebates for eligible firms, raising rebates for SMEs from 60% to 90% of premiums paid and for large firms from 30% to 50%. Struggling firms can apply for deferred social insurance payments.
Boost for key automaker suppliers! MIIT steps in: Report payment delays over 60 days. The Ministry of Industry and Information Technology opened a "window" for reporting payment issues, targeting four problems: payment delays exceeding 60 days, unreasonable payment terms, forced acceptance of commercial bills, and other issues.
SAMR holds fair competition forum. Executives from Goldwind, Teld, Great Wall Motor, Du Xiaoman, Vipshop, NetEase, SF Express, and Neusoft spoke, offering suggestions on improving fair competition.
JPMorgan bullish on China's "capacity cuts": Positive for stocks, especially new energy and property leaders. JPMorgan sees China's capacity reduction policies benefiting equities and global trade, strengthening pricing power for industry leaders, particularly in EVs and property. Goldman Sachs also highlights profit recovery in steel and cement as capacity clears.
HKEX IPOs boom, "not enough gongs" for the first time ever! "Lots of capital is returning to Hong Kong," with over 200 firms queuing to list. July 9 saw HKEX's busiest day this year, with Lens Technology, Geek+, Fortior, Dazhong Dental, Xunzhong Communications listing simultaneously. HKEX's strong support for tech IPOs is expected to sustain the momentum in the second half.
Foreign capital flowing into Hong Kong stocks via IPO cornerstone investments. Shenwan Hongyuan notes booming HK IPO activity, with foreign capital pouring into Chinese assets through cornerstone investments, reaching HKD 28.6 billion in H1, up sharply YoY. The A-H premium has narrowed to below 130%, with some quality stocks trading at premiums, reflecting strong foreign demand for Chinese core assets.
**Domestic Companies**
Goldman's latest China AI report: Native apps gain momentum, AI agent commercialization emerges. Goldman notes strong growth in China's AI-native software market in Q2 2025, with AI agents, multimodal models, and model deployment as key drivers.
Goldman: China's innovative drugs face structural revaluation, overseas licensing is key. China's biotech firms are valued at just 14-15% of U.S. peers despite contributing nearly 33% to global innovation, signaling a "value gap" and early-stage global re-rating.
Reports: Wafer producers raise prices; downstream acceptance unclear. On July 9, multiple wafer firms hiked prices by 8-11.7%, driven by rising silicon costs. However, with slowing domestic PV demand, battery makers' acceptance of the hikes remains uncertain.
**Overseas Macro**
Will replacing Powell trigger immediate rate cuts? Fed decision-making may be the biggest hurdle. Investors bet on rate cuts post-Powell, but Fed watchers note changes require FOMC majority support. The committee has 19 policymakers, with 12 voting members.
Next Fed chair: Two "Kevins" battle, Bessent watches. NEC Director Kevin Hassett and ex-Fed Governor Kevin Warsh are vying for the role, while Treasury Secretary Bessent is rumored to covet both jobs.
Wall Street ignores tariff threats, analysts even raise stock targets! Investors dismiss Trump's tariff warnings as negotiation tactics, reflecting skepticism about policy implementation.
Strong 10-year Treasury auction eases concerns, bonds rally. Analysts called it a robust auction, contrasting with weak 3-year sales. The timing was ideal, as global long-term yields rise, with 30-year yields near 5%. Without buyer support, stock sell-offs could worsen.
What the "Big Beautiful" bill means for U.S. industries: Private equity and coal win with tax breaks; defense budgets surge, benefiting contractors. Retail, healthcare, and renewables face subsidy cuts, while AI faces tighter regulation.
OPEC's surprise output hike fails to dent oil prices. This anomaly reflects OPEC+'s shift from price management to market share grabs and potential underestimation of market tightness. Refinery utilization and spot premiums signal supply constraints, while geopolitical risks and summer demand support prices.
**Overseas Companies**
CoreWeave pioneers "GPU-collateralized loans," leveraging AI cloud growth. The model is gaining traction, with UK AI startup Fluidstack securing over $10 billion in loans backed by Nvidia GPUs, surpassing CoreWeave's earlier scale.
Meta accelerates AI glasses, invests $3.5 billion in EssilorLuxottica. Meta's stake could rise to 5%, deepening ties with the Ray-Ban maker after partnering with Oakley for AI glasses.
Merck bets $10 billion on lung drug firm Verona ahead of patent cliff. The $107/share offer represents a 23% premium, marking Merck's third-largest deal in decades. Verona's ADRs rose 21% to $104.7.
**Sectors/Themes**
1. **Thermal Power**: GF Securities notes power sector profits rose 6.6% YoY in April-May, with Q2 earnings likely improving further as coal prices fall and electricity price declines narrow. Clean energy may face pressure due to weak resources.
2. **Construction Machinery**: June excavator sales rose 13% YoY, with domestic sales up 6%. Eastern Wu Securities sees the domestic cycle at an early stage, with 2-3 years of growth ahead, while emerging markets remain strong.
3. **HVLP Copper Foil**: AI servers are driving demand for high-end PCBs, where HVLP foil is a key material. Domestic production is ramping up.
4. **Solar**: The sector is pushing back against "involution," with policy-driven capacity cuts in silicon and self-balancing in glass. At a PB of 2.06 (11.5 percentile since 2017), the sector may be nearing an inflection point.
**Today's Preview**
- U.S. initial jobless claims.
- Speeches by Fed Governor Waller, St. Louis Fed’s Musalim, and San Francisco Fed’s Daly.
- Bank of Korea rate decision.
- U.S. Air Force begins two-week "Return to the Pacific" exercise.
- Amazon Prime Day.
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**Disclaimer**: The views expressed herein are solely those of the author and do not constitute investment advice. This platform makes no guarantees regarding the accuracy, completeness, originality, or timeliness of the information and assumes no liability for losses arising from reliance on it.
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