Morning News

Source: Wall Street News

 Market Overview

The US Secretary of Commerce talked about the progress of some tariff negotiations, claiming that some have been negotiated and are awaiting approval. The hope of a trade agreement boosted US stocks, with the gains expanding and the three major US stock indexes reaching new daily highs. The S&P 500 index rose for the sixth consecutive day, marking the longest streak in three years.

Trump signed an executive order related to auto manufacturer tariffs. Tesla closed up more than 2%, while General Motors, which revoked its 2025 earnings guidance, fell 4% at the opening and then narrowed most of its losses.

Meta rose for six consecutive days before releasing its financial report. Advanced Micro Devices, whose initial guidance was disappointing, plunged 20% after the market, and Snap, which failed to provide guidance, fell more than 10% after the market. The China stock index fell 0.3%, with Xiaopeng Motors falling more than 6% and NIO falling more than 1%.

US economic data were all disappointing, and the US Treasury bond yield hit a three - week low. The US dollar index rebounded; the British pound dropped from a three - year high; the offshore RMB once rose more than 300 points, breaking through 7.26 and reaching a new high in more than three weeks.

Weighed down by the progress of tariff negotiations, gold prices fell, dropping more than 1% intraday. The global trade war hurt the demand outlook, and crude oil prices fell for two consecutive days, reaching a new low in more than two weeks and once dropping 3% intraday.

During the Asian trading session, the A - share market showed a divergent trend, with small - cap stocks rising significantly. The Hang Seng Tech Index in Hong Kong closed up 0.6%, auto stocks rose, and government bond futures strengthened across the board.

### Key News

- China's President emphasized the need to accelerate the construction of a science and technology innovation high - ground with global influence during an inspection tour in Shanghai.

- The number of job openings in the US in March JOLTS hit a six - month low, far worse than expected. The Conference Board's consumer confidence index in April unexpectedly dropped to 86, the lowest since May 2020. The US merchandise trade deficit in March hit a record high, far exceeding expectations.

- The US Senate voted to confirm David Perdue as the US Ambassador to China.

- The AI competition is intense. After Alibaba released Qwen 3, Musk immediately announced that Grok 3.5 would be launched next week. Meta launched an independent AI application, directly challenging ChatGPT.

- Amazon was exposed to be marking the tariff costs on its products. After being rebuked by the White House, it clarified that this measure had not been launched. It is expected that the volume of Amazon's package deliveries will drop sharply, and UPS expects to lay off 20,000 people this year and close 73 facilities.

### Market Closing Quotes

- **European and US Stocks**: The Dow Jones Industrial Average rose 0.75%, the S&P 500 Index rose 0.58%, and the Nasdaq Composite Index rose 0.55%. The European STOXX 600 Index rose 0.36%.

- **A - Shares**: The Shanghai Composite Index fell 0.05%, the Shenzhen Component Index fell 0.05%, and the ChiNext Index fell 0.13%.

- **Bond Market**: The yield on China's 10 - year benchmark government bond was approximately 4.17%, down about 4 basis points intraday. The yield on the 2 - year US Treasury bond was approximately 3.65%, down about 4 basis points intraday.

- **Commodities**: WTI June crude oil futures fell 2.62%. Brent June crude oil futures fell 2.44%. COMEX June gold futures fell 0.42%. London aluminum rose 1.3%, and London nickel fell 0.4%.

### Details of Key News

- **Global Highlights**

   - China's President emphasized the need to accelerate the construction of a science and technology innovation high - ground with global influence during an inspection tour in Shanghai.

   - The Chinese Foreign Ministry released the video *Don't Kneel!*. The spokesperson of the Foreign Ministry said that he hoped this video could help all parties better understand China's position.

   - US media reported that Trump planned to adjust the auto tariff policy to reduce the impact. Netizens said that the damage had been done and the US had completely overdrawn its credibility. According to Huanqiu.com, the media reported that manufacturers who had paid the US government's auto tariffs would be exempted from other tariffs such as steel and aluminum, and the 25% auto parts tariff originally scheduled to take effect on May 3 would be adjusted. Some netizens said, "So the entire tariff policy is simply nonsense."

   - The number of job openings in the US in March JOLTS hit a six - month low, far worse than expected. The number of job openings in March was 7.192 million, compared with an expected 7.5 million. However, the number of layoffs decreased, recruitment activities remained stable, and more employees voluntarily resigned, which alleviated the weakness of the job opening data to some extent.

   - The Conference Board's consumer confidence index in April unexpectedly dropped to 86, the lowest since May 2020. After the release of the job opening and consumer confidence data, the US Treasury bond yield fell sharply in the short term.

   - The US merchandise trade deficit in March hit a record high, far exceeding expectations. The US merchandise trade deficit in March increased by 9.6% compared with the previous month, reaching $162 billion. Imports increased by 5% to $342.7 billion, with the import volume of consumer goods surging by 27.5% as companies rushed to import before the implementation of tariffs.

   - The US Senate voted to confirm David Perdue as the US Ambassador to China. On April 29, local time, the US Senate confirmed David Perdue as the US Ambassador to China with a vote of 67 in favor and 29 against.

   - Morgan Stanley raised the target price of Apple. It is already "obvious" that the financial report will exceed expectations, and the market is more concerned about three outstanding issues. Morgan Stanley believes that the financial report figures are not the most critical point of this Apple financial report. "Slightly exceeding expectations" is almost the market consensus. Investors are more concerned about a series of outstanding strategic issues, including tariff risks, AI strategies, iPhone demand, etc., which will dominate the market sentiment after the financial report.

   - The AI competition is intense. After Alibaba released Qwen 3, Musk immediately announced that Grok 3.5 would be launched next week. Musk said that Grok 3.5 is the first artificial intelligence that can accurately answer questions about rocket engines or electrochemical technology.

   - The social giant is betting on the personalized AI revolution. Meta launched an independent AI application, directly challenging ChatGPT. Meta's independent AI App is based on the Llama model and includes an information flow function called "Discovery". It also uses Meta's social data advantage to provide personalized services, but user feedback is mixed.

   - Amazon was exposed to be marking the tariff costs on its products. After being rebuked by the White House, it clarified that this measure had not been launched. According to Xinhua News Agency, the White House Press Secretary Levitt criticized that the practice of Amazon marking the additional tariffs on the selling price of goods reported by the media was "a hostile and politicized act". An Amazon spokesperson said that the company had only considered showing the tariff fees on some products, which belonged to its ultra - low - price shopping section Amazon Haul, not the entire Amazon platform. At present, this measure has not been launched on any Amazon platform.

   - UPS, the barometer of the US economy, is expected to lay off 20,000 people this year and close 73 facilities. This is regarded as UPS's action in anticipation of a sharp drop in the package delivery volume of its largest customer, Amazon.

- **Domestic Macroeconomy**

   - Two departments: Appropriately relax the price limit of the electricity spot market and explore the establishment of market - based varieties of ancillary services such as peak - shaving, frequency - modulation, and reserve. The National Development and Reform Commission and the Energy Administration proposed that in areas where the electricity spot market operates continuously, the rules of the spot market should be improved, the market price limit should be appropriately relaxed, and the peak - shaving function should be guided to be realized. Markets with similar functions such as peak - shaving and peak - load, and peak - shaving capacity will no longer operate.

   - The Hong Kong Stock Exchange and the Hong Kong Securities and Futures Commission have contacted some relevant enterprises regarding the "intention of Chinese - listed companies to return". If the "Chinese - listed companies" that have not yet been listed in the Hong Kong market hope to return, the Hong Kong Securities and Futures Commission and the Hong Kong Stock Exchange will provide them with appropriate guidance and assistance for their listing in Hong Kong. The two departments are promoting a comprehensive review of the listing system, including examining the listing requirements and post - listing continuous responsibilities, reviewing the listing regulations and arrangements, improving the approval process, and studying the optimization of the dual - primary - listing and secondary - listing thresholds.

- **Domestic Companies**

   - Guizhou Maotai's net profit in the first quarter increased by 11.56% year - on - year, and its revenue increased by 10.54%. The demand for high - end liquor is stable. In the first quarter, Guizhou Maotai achieved an operating revenue of 50.6 billion yuan, a year - on - year increase of 10.54%, and a net profit of 26.847 billion yuan, a year - on - year increase of 11.56%. The company's demand for high - end liquor remains stable, and the series - liquor strategy has achieved remarkable results.

   - China Duty - Free Group's revenue in the first quarter fell 10.96% year - on - year, and its net profit fell 15.8%.

   - China Merchants Bank, the "king of retail", released its first - quarter report. Its net interest income increased, its investment contribution stabilized the situation, and its fair - value income fluctuated under pressure.

   - China Life Insurance's net profit in the first quarter increased by 39.5% year - on - year, its total investment income exceeded 50 billion yuan, its premium income increased and decreased differently, and its floating - income business became a highlight.

   - Xinhua Insurance's investment income in the first - quarter report was once again a highlight. The Honghu II project is ready to go, and its premium income has increased significantly.

   - CITIC Securities released its first - quarter report, with both revenue and profit increasing. Many of its indicators still rank first in the industry.

   - Cathay - Haitong released its first - quarter report after the merger: its net profit attributable to the parent company ranks first in the industry, its revenue ranks second in the industry, and negative goodwill becomes a key data.

   - Backed by large companies, Hong Kong - stock brokers start a "three - way struggle". Futu is backed by Tencent, Tiger is backed by Xiaomi, and now Yew Chung is backed by Ant.

   - Yangtze Power's revenue in the first quarter increased by 8.7% year - on - year, and its net profit was 5.18 billion yuan, an increase of 30.56% year - on - year.

   - The price war in the photovoltaic industry is intense. LONGi Green Energy suffered a net loss of 8.62 billion yuan in 2024, its first annual loss in more than a decade.

   - Inner Mongolia Baotou Steel Rare - Earth (Group) Hi - Tech's net profit in the first quarter skyrocketed sevenfold, with both production and sales reaching new highs.

   - Midea's revenue in the first quarter increased by 20.5% year - on - year, and its net profit increased by 38%. Its new business has experienced explosive growth.

   - Foxconn Industrial Internet's revenue in the first quarter increased by more than 35% year - on - year, and its AI server business increased by more than 50% year - on - year. The strong growth of the cloud - computing business has driven the growth of both revenue and profit of Foxconn Industrial Internet.

   - Haier Smart Home's revenue in the first quarter increased by 10% year - on - year, its net profit increased by 15%, and the growth rate of its high - end brand Casarte exceeded 20%.

   - Inspur Group's net profit in the first quarter increased by 52.78% year - on - year, led by the server business.

   - Well - Known's net profit in the first quarter increased by 55%, driven by the acceleration of smartphone and automotive intelligence.

   - Key signal from the Shanghai Auto Show: China's multi - technology - route approach crushes the US's single - line thinking. The most representative case of the parallel development of multi - technology - routes in China's electric - vehicle industry is the simultaneous progress of charging, battery - swapping, and hydrogen - energy routes, which brings three core advantages: solving the problem of grid bottlenecks, facilitating the expansion of overseas markets, and playing the role of energy - storage peak - shaving. In contrast, the US mainly bets on the charging - technology route, and mainstream manufacturers such as Tesla have hardly invested in the battery - swapping technology.

   - SF Motors' revenue in the first quarter decreased by 27.9% year - on - year, while its net profit increased by 240.6%. This "divergent" performance is mainly due to the increase in the sales proportion of high - value - added models, which has driven a significant increase in the gross profit margin. In the first quarter, the sales volume of SF Motors' Wenjie M9 reached 23,000 units, a year - on - year increase of 117.8%, and it has topped the sales list of domestic luxury cars priced over 500,000 yuan for many consecutive months.

   - COSCO SHIPPING Holdings' net profit in the first quarter increased by more than 73% year - on - year, with both the volume and price of the container - shipping business rising.

   - High gold prices are "killing" gold jewelry. While Chow Tai Seng and Lao Feng Xiang are struggling, Laopu is booming. Morgan Stanley pointed out that the soaring gold prices are "killing" the traditional gold - jewelry market. The first - quarter performance of Chow Tai Seng and Lao Feng Xiang has declined significantly, and their stores are shrinking rapidly. However, brands like Laopu, which focus on differentiated and high - value - added products, have bucked the trend and are more resistant to the impact of rising gold prices.

- **Overseas Macroeconomy**

   - "Shadow Fed Chair" Warsh: Indulging in fiscal profligacy and misjudging the economic situation, the Fed's dilemma is "self - inflicted". Warsh said that the Fed is departing from its original mission and trying to play the role of the "chief economic planner". It has neither fulfilled its legal responsibility to maintain price stability nor curbed the disorderly expansion of federal spending. This overreach is eroding the legitimate basis of the Fed's monetary - policy independence.

   - The reality and misinterpretation of "mid - year US - Treasury - bond maturity". CITIC Securities pointed out that the narrative of "mid - year US - Treasury - bond maturity" is obviously exaggerated. There is indeed some pressure on central - term maturity in the middle of the year, but it mainly comes from short - term bonds that are rolled over frequently and "borrow new to repay old". Moreover, judging from the auction situation after the "equivalent tariff" was released, the demand for T - Bills remains stable. The maturity distribution of medium - and long - term US Treasury bonds is relatively stable, and there is no pressure on central - term maturity.

   - The Arizona legislature passed a bill on bitcoin reserves, allowing up to 10% of public assets to be invested in bitcoin, the first in the US! These bills have been passed by the legislature but still need the signature of Governor Katie Hobbs (Democrat) to take effect. In addition to Arizona, Texas, Florida, and New Hampshire in the US are also promoting similar legislation.

   - Rare blackout in Southern Europe! Spain is in chaos. Six days ago, the power grid achieved "100% renewable energy" for the first time. The sudden blackout has completely disrupted normal life, with traffic paralysis, communication interruption, and tens of thousands of people trapped. Analysts pointed out that currently, 43% of Spain's electricity comes from wind and solar energy, but the construction speed of the power grid and energy - storage system has not kept up with the rapid development of renewable energy.

   - Indonesia raises mining taxes, with the largest increase in the nickel industry. Giants warn that it may lead to production cuts and shutdowns! The Indonesian government raised the royalty tax rates for nickel, coal, copper, gold, and other minerals last weekend. The tax rate for the nickel industry increased the most, from 10% to 14% - 19%. Hendra Sinadia, the executive director of the Indonesian Mining Association, warned that the operating costs of mining companies would rise and their profits would be hit. Some companies may have to reduce production or even close their mines.

Overseas Companies

General Motors sounded the alarm. Despite its Q1 earnings exceeding expectations, it still withdrew its earnings guidance and froze its stock buyback. General Motors' adjusted earnings per share was $2.78, surpassing the estimate of $2.72. Its revenue was $44.02 billion, a year-on-year increase of 2.3%, partly due to consumers rushing to buy cars before the tariffs came into effect. However, due to the uncertainty of tariffs, General Motors announced the withdrawal of its full-year earnings forecast, suspended its $2 billion stock buyback plan, and postponed the analyst conference call at the same time.

Coca-Cola's revenue in Q1 slightly decreased by 2%, while its operating profit increased by 71%. The sales of its zero-sugar products were strong, with a year-on-year increase of 14%.

With significant fluctuations in the US Treasury bond market, Deutsche Bank's net profit in Q1 soared by 39% as it increased its credit provisions due to tariffs.

Weighed down by the decline in oil prices, the profit of BP, an energy giant, nearly halved in the first quarter.

Industry/Concepts

1. Gaming: GF Securities pointed out that SLG products have a relatively long life cycle and stable payment. Successful SLG products can provide stable performance contributions to companies. In terms of prosperity, since 2024, a number of SLG products with integrated gameplay have performed outstandingly overseas. Pay attention to companies with outstanding R&D capabilities in the SLG field and a reserve of high-quality products.

2. Military Industry: Tianfeng Securities pointed out that in the first quarter of 2025, the over-allocation ratio of active and passive funds' shareholdings in the military industry sector gradually recovered. The over-allocation ratio reached -0.66%, an increase of 0.04% compared with the over-allocation ratio in Q4 2024. The recovery of the sector allocation ratio in Q1 2025 may mean that the fundamental repair is gradually emerging. The allocation ratio is expected to have a gradual rebound, and the over-allocation ratio in Q2 2025 is expected to increase further.

3. Machinery: The research report of Changjiang Securities sorted out and analyzed the positions in the machinery industry in Q1 2025. The overall quarter-on-quarter increase was obvious. The allocation ratios of sectors such as construction and construction machinery increased significantly, and the over-allocation ratio increased significantly to 0.49 percentage points. In addition, the over-allocation ratio of special equipment reached 0.06 percentage points, also becoming a sector preferred by fund allocation.

4. Electronic Yarn: In Q1 2025, the price of electronic yarn increased by more than 17% year-on-year, which benefited from the improvement of the market supply and demand structure and limited changes in production capacity. At the same time, the demand for AI servers and high-frequency communication has driven the shortage of Low-Dk electronic yarn. Currently, Japanese and Taiwanese enterprises in the low-dielectric electronic cloth market occupy a large share. However, domestic enterprises have been vigorously expanding production since Q4 2024. It is expected that after the domestic new production capacity is put into operation in the second half of 2025, the market share will be expanded and the performance will be realized.

Preview of Today's Key News

China's official manufacturing, non-manufacturing, and composite PMIs in April, and Caixin Manufacturing PMI.

GDP of the Eurozone in the first quarter.

Germany's CPI in April.

Change in the number of ADP employment in the United States in April.

Actual GDP of the United States in the first quarter.

PCE price index, personal income, and consumer spending in the United States in March.

Change in EIA crude oil inventories in the United States last week.

Microsoft, Meta, and Qualcomm to release their financial reports.

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