Morning News

Source: Wall Street Journal  

**Market Overview**  
Undeterred by tariffs, the S&P and Nasdaq hit record highs. Tesla rose 4.7% as its Robotaxi business expanded; Nvidia marked its third consecutive record high, with its market cap reaching $4 trillion. Rare earth mining stock MP Materials surged nearly 51%, while Delta Air Lines, which reinstated its annual profit guidance, jumped 12%.  

Strong demand for the 30-year Treasury auction pared bond price losses. Following U.S. unemployment data, the dollar index hit a two-week high. Bitcoin soared over $5,000 intraday, surpassing $116,000 to set a new all-time high.  

Crude oil fell from two-week highs, posting its first weekly decline with an intraday drop exceeding 2%. Gold continued to recover from over one-week lows. New York copper rebounded more than 3% at one point.  

During the Asian session, the Shanghai Composite held above 3,500 points, with property stocks rallying en masse. Black commodities broadly rose, the Hang Seng Index reclaimed 24,000 points as financial stocks surged, and government bonds collectively declined.  

**Key News**  
Before the August "deadline," Myanmar seeks Trump's drastic tariff cuts, proposing zero tariffs on U.S. goods. Brazil's president: Will negotiate tariffs with the U.S.; if ineffective, reciprocal countermeasures will follow.  

Trump: A 50% tariff on copper to take effect August 1. Racing against tariffs, traders begin shipping copper to Hawaii. HSBC: August 1, 50% tariffs—a turning point for Shanghai and London copper.  

Trump again urges the Fed to cut rates quickly, praising Nvidia's stock surge. The Trump administration attacks the Fed over HQ renovations: The White House accuses Powell of "serious mismanagement."  

Fed Governor Waller: A July rate cut is possible, supports continued balance sheet reduction, and favors increasing short-term asset holdings. Fed divisions reemerge: Some say tariff impacts on inflation won’t last, others expect effects into next year.  

Report: OPEC+ discussing pausing output increases from October.  

OpenAI makes a major move, releasing its first "open-weight" model in six years, potentially challenging Microsoft's exclusive agreement.  

Grok 4 officially launched! Trained with the world's strongest computing power, it rivals GPT-5 and Claude 4 Opus. Musk says the Grok chatbot will debut in Tesla cars by next week at the latest.  

Report: Ant International plans to introduce Circle's stablecoin and is considering license applications in multiple regions.  

U.S. rare earth stocks surged pre-market, with magnet producer MP Materials securing Pentagon investment for factory expansion.  

**Market Close**  
**Global Stocks**:  
- S&P 500: +0.27% to 6,280.46  
- Dow: +0.43% to 44,650.64  
- Nasdaq: +0.09% to 20,630.66  
- Europe STOXX 600: +0.54% to 552.93  

**A Shares**:  
- Shanghai Composite: 3,509.68, +0.48%  
- Shenzhen Component: 10,631.13, +0.47%  
- ChiNext: 2,189.58, +0.22%  

**Bonds**:  
- 10-year U.S. Treasury yield: +1.19 bps to 4.3438%  
- 2-year U.S. Treasury yield: +2.5 bps to 3.8679%  

**Commodities**:  
- WTI August crude: -2.19% to $66.88/barrel  
- Brent September crude: -2.2% to $68.64/barrel  

- COMEX gold: +0.38% to $3,333.67/ounce

### **Key News Details**  

#### **Global Highlights**  

**Bessenet’s Closed-Door Meeting Leak: Urging Trump to Be Patient on Trade Decisions**  

Bessenet revealed that Trump has a unique ability to identify problems and solutions but sometimes lacks patience in execution. He expects two rate cuts this year. Earlier reports indicated that Trump delayed the tariff "deadline" after advisors like Bessenet suggested it would buy time for trade negotiations.  

**Myanmar Seeks Trump’s Tariff Cuts Before August Deadline, Proposes Zero Tariffs**  

Myanmar’s military government proposed reducing U.S. tariffs to 10%-20% while offering zero to 10% tariffs on American goods. A high-level delegation is preparing for talks in the U.S. Trump’s tariff letter this Monday showed a 40% tariff on Myanmar starting August 1, slightly lower than the initial 44% but still high. Myanmar’s spokesperson said they will negotiate actively for a win-win outcome.  

**Brazil’s Lula Vows Retaliation as Trade Deficit Faces 50% Tariffs, Markets Plunge**  

Despite Brazil’s trade deficit with the U.S., Trump linked tariffs to Brazil’s judicial proceedings against former President Bolsonaro, politicizing the issue. Lula stated Brazil will prioritize negotiations and may file a WTO complaint. If talks fail, Brazil will impose reciprocal 50% tariffs under its Economic Reciprocity Law.  

**Japanese Automakers Absorb Costs: U.S. Export Prices See Record Drop**  

To maintain competitiveness, Japanese automakers are sacrificing profits. The Bank of Japan reported a 19.4% year-on-year drop in auto export prices to North America—the steepest decline since records began in 2016.  

**Trump: 50% Tariff on Copper Effective August 1**  

COMEX copper prices surged to record highs following the announcement.  

**Traders Race Against Tariffs, Reroute Copper to Hawaii**  

To beat the deadline, traders are shortening delivery times by shipping copper to Hawaii (10 days vs. over a month to New Orleans). Puerto Rico is also an option for South American producers, as it falls under U.S. tariff jurisdiction.  

**HSBC:** The August 1 tariff could mark a turning point for Shanghai and London copper prices, with a short-term surge followed by a potential decline as excess supply re-enters the market.  

**Trump Pressures Fed for Faster Rate Cuts, Praises Nvidia’s Surge**  

Trump again urged Fed Chair Powell to cut rates, crediting his tariff policies for Nvidia’s 47% rise since his election. He also praised tech stocks, industrials, Nasdaq, and crypto for hitting record highs.  

**White House Attacks Fed Over HQ Renovation Costs**  

The White House accused Powell of "serious mismanagement" over the Fed’s $2.5 billion renovation, comparing it to Versailles Palace’s $3 billion restoration.  

**Fed Governor Waller: July Rate Cut Possible, Supports Continued QT**  

Waller reiterated that current rates are too restrictive and signaled openness to a July cut. He suggested the balance sheet could shrink to $5.8 trillion (currently $6.7 trillion).  

**Fed Divisions Emerge on Tariff Inflation Impact**  

- *SF Fed’s Daly*: Tariff effects may be smaller than expected, with businesses sharing costs. Still expects two cuts this year.  

- *Voting Member Moussalem*: Inflation risks are rising; tariff impacts may become noticeable by Q3 and persist into next year.  

**Report: OPEC+ Discusses Pausing Output Hikes from October**  

OPEC+ may halt increases post-next monthly hike. Goldman Sachs predicts an oil surplus in 2024-25, driving the expected pause.  

**OpenAI’s Big Move: First “Open-Weight” Model in Six Years**  

OpenAI plans to release an open-weight AI model next week—its first since GPT-2 in 2019. This could challenge Microsoft’s exclusivity, as rival cloud providers may host the model, diverting Azure customers.  

**Grok 4 Launches: World’s Strongest AI, Rivaling GPT-5 & Claude 4 Opus**  

With a 256k-token context window, multimodal capabilities, and faster reasoning, Grok 4 is priced at $30/month ($300 for Heavy). Musk confirmed it will debut in Tesla cars by next week.  

**Ant International Plans to Integrate Circle’s Stablecoin, Seeks Licenses**  

Ant aims to adopt USDC post-U.S. compliance and is pursuing stablecoin licenses in Hong Kong, Singapore, and Luxembourg. Its blockchain handled $1T+ in transactions last year.  

**U.S. Rare Earth Stocks Soar as MP Materials Secures Pentagon Funding**  

The Pentagon will invest $400M in MP Materials (the sole U.S. rare earth miner), becoming its largest shareholder. A new plant (10k-ton annual capacity) is set for 2028. JPMorgan and Goldman Sachs pledged $1B in financing. MP surged nearly 50% pre-market.  

**Howard Marks & Chen Guangming: Focus on Value, Bullish on U.S.-China Long-Term**  

Marks emphasized long-term value investing, calling the U.S. a high-return destination. Chen stressed intrinsic value, noting undervaluation in Chinese firms and innovation potential.  

#### **Domestic Macro**  

**National Finance Lab: Explore RMB Stablecoin Pilots in Shanghai & HK**  

The lab proposed syncing stablecoin trials in Shanghai’s free-trade zone and Hong Kong, blending onshore-offshore models for strategic oversight.  

**Ministry of Finance: EU Medical Device Procurement Caps**  

For procurement projects over ¥45M, non-EU firms’ EU-imported devices must not exceed 50% of contract value.  

**Qiushi: Urban Renewal Focuses on Livability & Heritage**  

The policy emphasizes spatial, functional, and cultural upgrades, including renovating old neighborhoods and preserving history.  

#### **Domestic Companies**  

**Meituan vs. Alibaba’s Hema: Battle for Instant Retail Dominance**  

Meituan’s "Happy Monkey" and Alibaba’s "Hema NB" clash in Hangzhou. The winner may redefine strategies in high-cost, low-margin instant retail.  

**Food Delivery War: Expectation Gaps & Counter-Consensus**  

The battle isn’t just JD/Taobao vs. Meituan—it’s instant retail challenging e-commerce’s ecosystem. Long-term, hyper-local operations will prevail.  

**HSBC:** Alibaba will keep burning cash but股价已触底, maintaining a "Buy" rating ($150 target) on cloud/AI strengths.  

**Baillie Gifford: China’s Tech Giants Rely on Consumption, Not Tariffs**  

The CEO noted exports to the U.S. are <10% of retail sales. Firms like Meituan (down 21% YTD) will thrive on domestic demand.  

**Zhiyuan Robotics’ IPO Hurdles**  

A backdoor listing via Shanghai Weibo faces regulatory challenges, but alternatives like phased asset injections remain.  

**TSMC Q2 Sales Beat: ¥933.8B (+38.6% YoY)**  

AI demand drove June sales to ¥263.7B (+26.9% YoY), with Q2 totaling ~$31.95B,远超 guidance.  

**CATL’s HK Shares Hit Record Premium (30% Over A-Shares)**  

JPMorgan attributes this to lock-up illiquidity, short squeezes, and global investor favor.  

#### **Overseas Macro**  

**"Fed Chair Contender" Warsh: "Inflation Is a Choice"**  

Warsh criticized the Fed’s loose policies, urging a return to price stability and fiscal responsibility.  

**30-Year Treasury Auction Strong, Direct Bidder Ratio 3rd Highest**  

The yield was 0.1bp below pre-sale levels, with 27.4% direct bids—the highest since 2011.  

**Goldman Trader: Don’t Fight the Trend—Summer "Melt-Up" Coming**  

Three cycles align: mid-cycle growth, bullish sentiment, and a 1990s-like tech boom.  

**Why Tariffs Haven’t Hit U.S. Prices Yet? Goldman Explains**  

Deferred payments, stockpiling, and foreign cost absorption delay impacts—but inflation will come.  

#### **Overseas Companies**  

**Amazon May Invest Billions More in Anthropic**  

Beyond its $8B commitment, Amazon eyes deeper AI ties, including a 2.2-gigawatt data center ("Project Rainmaker").  

**Broadcom: AI Inference Demand Exceeds Capacity**  

Unanticipated growth in AI推理 could lift earnings beyond current $60-90B forecasts. Non-AI segments (e.g., VMware) also rebound.  

**Delta Air Lines Restores Guidance, Shares Jump 13%**  

Q2 adjusted EPS of $2.10 beat estimates. Full-year EPS forecast: $5.25-$6.25.  

#### **Sectors/Themes**  

1. **Biotech**: Merck’s $10B acquisition of Verona Pharma (COPD drug) highlights BD-driven innovation.  

2. **Apparel**: Sportswear leads in Q2; home textiles benefit from subsidies.  

3. **Copper**: Post-tariff, LME/SHFE may dip but long-term bullish—buy the dip.  

4. **HR Services**: Resilient across cycles, with low valuations offering upside.  

### **Today’s Preview**  

- France June CPI  

- IEA Oil Market Report  

**Disclaimer**: Views are authors’ alone, not investment advice. Accuracy, completeness, or timeliness isn’t guaranteed. No liability for losses.