Morning News

Source: Wall Street News

### Market Overview

The market's expectation of the Federal Reserve cutting interest rates in September is almost a "done deal". The narrative logic of "bad news is good news" has re - dominated the market, triggering a strong buying spree on dips. The Nasdaq rose by approximately 2%, and the Dow Jones Industrial Average surged nearly 600 points. Nvidia rose 3.6%, leading the seven tech giants. Berkshire fell nearly 3% after releasing its financial report. The newly - listed stock Figma plummeted by more than 27%.

The market is waiting for a large number of U.S. Treasury bond issuances this week. U.S. Treasury yields generally declined, with the 10 - year yield falling by 2.3 basis points.

The U.S. dollar fluctuated in a narrow range. Ethereum rose by more than 6%. Gold continued its upward trend, edging up by 0.3%.

U.S. oil once dropped by more than 3% from the daily high. OPEC+ announced a substantial increase in production for September on Sunday. Coking coal closed up 1.85% in the night session, and iron ore rose 1.08%.

During the Asian session, A - shares and H - shares pulled up in the afternoon. The three major indices all closed higher. Military industry stocks surged. The Hang Seng Tech Index rose by more than 1%, Innosecco rose by more than 30%, and southbound funds had a net sale of over 18 billion yuan.

### Top News

Media supervised by the People's Bank of China: Strengthen the supervision of individuals' overseas income, and the income from overseas stock trading should also be taxed.

The number of new A - share accounts opened in July surged by 71%, and investors continued to rush into the market!

Trump once again took issue with India over its purchase of Russian oil, threatening to significantly raise tariffs on India, and the Indian ETFs listed in the U.S. turned lower. Report: The EU will suspend its trade countermeasures against the U.S. for 6 months. Switzerland is facing a "race" of negotiations to reduce tariffs by 39%; Swiss gold trade has become the focus of Trump's tariff policy.

Trump will select a new Federal Reserve governor "in the next few days" and announce a new director of the Bureau of Labor Statistics within three to four days. Trump wants to place more "his own people" to make U.S. employment data "more transparent and reliable".

The former third - ranking official of the Federal Reserve: The internal differences within the Federal Reserve have been exaggerated, and the two dissenting governors have other motives.

Tesla awarded Musk a $30 billion stock reward, reaffirming that his leadership is irreplaceable.

High valuations coupled with a weak economy, Wall Street has issued a unanimous warning: The S&P 500 may fall by 10% to 15%.

### Market Closing Reports

European and American stock markets: The S&P 500 Index rose 1.47% to 6329.94 points. The Dow Jones Industrial Average rose 1.34% to 44173.64 points. The Nasdaq Composite Index rose 1.95% to 21053.59 points. The European STOXX 600 Index closed up 0.90% to 540.60 points.

A - shares: The Shanghai Composite Index rose 0.66% to close at 3583.31 points; the Shenzhen Component Index rose 0.46% to close at 11041.56 points; the ChiNext Index rose 0.5% to close at 2334.32 points.

Bond market: The yield on the 10 - year U.S. benchmark Treasury bond fell 2.35 basis points to 4.1923%. The yield on the 2 - year U.S. Treasury bond fell 0.65 basis points to 3.6752%.

Commodities: COMEX gold futures rose 0.84% to $3401.0 per ounce. WTI crude oil futures for September closed down 1.54% to $66.29 per barrel. Brent crude oil futures for October closed down 1.30% to $68.76 per barrel.

### Details of Top News

#### Global Highlights

Media supervised by the People's Bank of China: Strengthen supervision over individuals' overseas income; income from overseas stock trading should also be taxed. According to the *Financial Times*, "In accordance with China's Individual Income Tax Law, personal income from stock trading belongs to income from property transfer and should be subject to a 20% tax rate on a transaction-by-transaction basis. Among them, personal income from stock trading in the domestic secondary market is temporarily exempt from personal income tax; there is no tax exemption for income from direct stock trading overseas, and it is required to declare and pay taxes in the following year after obtaining the income," explained Zhang Wei, Dean of the School of Taxation at Jilin University of Finance and Economics.

The number of new A-share accounts opened in July surged by 71%, with investors continuing to rush into the market! On August 4, the Shanghai Stock Exchange disclosed that in July this year, the number of new A-share accounts opened reached 1.96 million, far exceeding the level of the same period last year, a year-on-year increase of 71% and a month-on-month increase of 19%. The new A-share account data reflects, to a certain extent, the recovery of the A-share market and the improvement in trading activity. As of July 2025, the total number of new A-share accounts opened has reached 14.56 million, a year-on-year increase of more than 30%.

Trump once again took issue with India over its purchase of Russian oil, threatening to significantly raise tariffs on India, and U.S.-listed Indian ETFs turned lower. Trump claimed that India not only bought a large amount of Russian oil but also sold most of it in the open market to make huge profits. U.S.-listed Indian ETFs turned lower, and the Indian rupee's decline against the U.S. dollar widened to nearly 1%. India's Ministry of External Affairs stated that it will take all necessary measures to safeguard national interests and economic security. The actions targeting India are unfair and unreasonable. The U.S. and Europe are putting pressure on India, yet they themselves continue to import Russian oil.

Cracks appear in U.S.-India relations; Modi calls for promoting "domestic products," and India ignores Trump's threats to "insist on buying Russian oil." According to the *Global Times*, Trump has shifted from praising India as a strategic partner to threatening sanctions, warning that continued purchases of Russian weapons and energy will face additional sanctions. Senior Indian officials clearly stated that the policy remains unchanged and will insist on buying Russian oil. Modi called for promoting "Made in India" products and emphasized "India First." Analysts believe that India's adherence to strategic autonomy and the U.S. expectations form a structural contradiction, and U.S.-India relations are facing major changes.

Report: The EU will suspend trade countermeasures against the U.S. for 6 months. On the 4th local time, a European Commission spokesperson said that in accordance with the agreement reached between the EU and the U.S., the EU will suspend the implementation of two countermeasures against U.S. tariffs within 6 months. This extension measure will officially take effect this Tuesday.

Switzerland faces a negotiation "race" to reduce tariffs by 39%. The Swiss President convened an emergency meeting of the Federal Council on Monday to discuss response strategies. Negotiators from Switzerland's State Secretariat for Economic Affairs have contacted the U.S. side to seek a breakthrough. Analysts predict that the 39% tariff will have a 1% negative impact on Switzerland's GDP in the medium term.

Behind the trade deficit, Swiss gold trade has become the focus of Trump's tariff policy. In the first quarter of this year, Switzerland's gold exports to the U.S. exceeded $36 billion, accounting for more than two-thirds of its trade surplus with the U.S. However, despite the huge value of gold exports, most of them are financial market arbitrage activities rather than real economic output, and Switzerland's actual economic benefits are limited. Since gold has been exempted from tariffs, it is expected that its exports will not be affected by the 39% tariff in the future.

Will the next Federal Reserve Chair be announced this week? Trump will fill the vacant governor position "in the next few days." Trump said on Sunday that he will select a new Federal Reserve governor "in the next few days" and announce a new director of the Bureau of Labor Statistics within three to four days. By filling Kugler's seat, Trump can place a person in the Federal Reserve who is more in line with his preference for interest rate cuts earlier than expected. This strategic layout will significantly advance the competition schedule for the next chairperson. Currently, popular candidates include Kevin Hassett, Director of the White House National Economic Council, Kevin Warsh of the Hoover Institution at Stanford University, and Treasury Secretary Scott Bessent.

UBS analysts believe that since the Federal Reserve Chair must also be a member of the Board of Governors, a safe move for the White House is to appoint Powell's successor as soon as possible to replace the vacant governor position. Otherwise, if Powell chooses to remain as a governor after stepping down as chair, the White House's nomination for the new chair will be limited to existing board members. However, having a "potential successor" work with the current chair at the FOMC may complicate future policy communication and intensify internal tensions.

Not only firing the statistical bureau director, Trump wants to place more "his own people" to make U.S. employment data "more transparent and reliable." White House Chief Economic Adviser Hassett said that the scale of data revisions is a matter of particular concern. When data is "being revised everywhere, people will question whether there is partisan bias." Firing Labor Statistics Director Erika McEntarfer is part of Trump's further reform plan for the agency, aiming to place more "his own people" to ensure that employment data is "more transparent and reliable."

Former third-ranking official of the Federal Reserve: Internal differences within the Federal Reserve have been exaggerated; the two dissenting governors have other motives. Dudley wrote that last week, Waller and Bowman dissented on keeping interest rates unchanged. The former wanted to succeed Powell, and the latter was "grateful" for Trump appointing her as the Federal Reserve's Vice Chair for Supervision. Internal differences within the Federal Reserve have been exaggerated. He bluntly stated that potential successors to Powell have gone too far in attacking Powell, and the idea of "breaking some people's heads" for "regime change" is mean. Dudley mentioned that Powell intends to serve his term until May 2026 and may continue to stay as a governor afterward. The control of the Federal Reserve is in Powell's hands, not Trump's.

Tesla awards Musk a $30 billion stock reward, reaffirming that his leadership is irreplaceable. Tesla's board approved a one-time equity reward worth approximately $30 billion to Musk, on the condition that he continues to serve as an executive for the next two years. This plan aims to deal with the vacuum after the 2018 compensation plan was rejected by the court. If the original plan is reinstated, the new reward will be invalidated. Analysts believe that this move highlights that Musk still has absolute control over the company, meaning that Musk will not resign as CEO in the near future.

High valuations meet a weak economy; Wall Street issues a unanimous warning: The S&P 500 may fall by 10% to 15%. Morgan Stanley, Deutsche Bank, and Evercore all warned this week that the S&P 500 index may fall by 10% to 15% in the next few weeks to months. After three months of strong rebound, factors such as high valuations, rising inflation, slowing employment, and weak consumption have triggered institutional concerns. Although short-term volatility is expected, various analysts still recommend investors to "buy on dips," especially stocks benefiting from the AI wave.

Goldman Sachs: U.S. stocks enter "dangerous August"; the market ignores these "good news" in European stocks. When the seasonal "August curse" arrives as scheduled, the short-term correction risk of the U.S. stock market increases sharply. Analysts said, "From now until mid-September, seasonal factors are no longer your friends, so it's hard to find reasons to be overly long." While the market focuses on the U.S., it may ignore positive developments in Europe. Goldman Sachs has raised its GDP forecast for Europe, where merger and acquisition activities are recovering, and German companies have announced large-scale capital expenditure plans.

#### Domestic Macroeconomy

A record amount of mainland capital flows into Hong Kong stock ETFs; will IPO rule reforms "add fuel to the fire" for the market? The recent correction in Hong Kong stocks has attracted mainland investors to build positions on a large scale. Last week, the net purchase of mainland-listed ETFs investing in Hong Kong stocks rose to a record 27 billion yuan, indicating strong demand for buying on dips. At the same time, the Hong Kong Stock Exchange's "A+H" issuance policy optimization has taken effect, lowering listing thresholds, supporting dual-listing models, further enhancing the attractiveness of Hong Kong's IPO market, and ultimately benefiting the overall Hong Kong stock market.

*Caixin* magazine's nine industry surveys explain China's anti-involution storm. *Caixin* magazine interviewed enterprises in various industries such as steel, furniture, home appliances, building materials, photovoltaics, and automobiles. Analysis suggests that "anti-involution" is not necessarily simply equivalent to "capacity reduction." The new round of "anti-involution" is different in that it involves the "new three things" industry. Without strong measures to stimulate consumption, merely reducing capacity from the supply side may be difficult to solve the complex involution problem.

#### Domestic Companies

Tongyi Qianwen launches Qwen-Image, the first image generation foundation model in its series, which is open-source! Tongyi Qianwen open-sources the 20B parameter MMDiT image foundation model Qwen-Image, which for the first time realizes high-fidelity text rendering at the Chinese-English multi-line paragraph level, zero-offset consistent image editing, and achieves SOTA in various mainstream generation and editing tasks.

#### Overseas Macroeconomy

Is the data center construction boom causing a "2008-style financial crisis" to reappear in the U.S.? Just like telecommunications in the 1990s and railways in 1873. Driven by the AI boom, tech giants are setting off a historic data center construction boom. However, the source of funds for this feast is shifting from traditional equity financing to the increasingly large and opaque "private credit" market, which has sharply increased the risk exposure of systemically important institutions such as banks and insurance companies, triggering deep market concerns that a "2008-style" financial crisis may repeat.

The plan to increase capital gains tax has triggered opposition; more than 120,000 people in South Korea signed a petition calling for its suspension. Just two months after the inauguration of South Korea's Lee Jae-myung government, it unexpectedly launched a comprehensive tax increase plan, which includes significantly lowering the capital gains tax threshold, increasing the securities transaction tax, and the maximum corporate income tax rate. This move has aroused strong public backlash, and the number of signatures on a national petition demanding the withdrawal of the plan has quickly exceeded 120,000.

The shadow of the trade war reappears; the nine-week consecutive rise of emerging market ETFs is interrupted, with India seeing the largest weekly outflow of nearly $300 million. As of the week ending August 1, emerging market ETFs had a net outflow of $1.11 billion (compared to a net inflow of $2.36 billion the previous week). Among them, equity ETFs had an outflow of $890 million, and bond ETFs had an outflow of $222 million.

Citigroup turns from bearish to bullish, raises gold price target, saying that economic and inflation concerns are rising, and gold prices will hit a new high. Citigroup believes that the deteriorating U.S. economic outlook and rising inflation concerns will push gold prices to a new high. The bank raised its gold price target for the next three months to $3,500 per ounce from $3,300 per ounce, and the trading range to $3,300 - $3,600 per ounce from $3,100 - $3,500 per ounce. Citigroup predicted in June that gold prices would fall below $3,000 in the next few quarters.

Russian Foreign Ministry: Restrictions on deploying medium and short-range land-based missiles are no longer relevant to Russia. According to CCTV News, the Russian Foreign Ministry issued a statement saying that for Russia, the conditions for unilaterally restricting the deployment of land-based medium and short-range missiles have disappeared, and Russia no longer considers the previous self-restrictions on the deployment of land-based medium and short-range missiles relevant to itself. The statement pointed out that based on an interdepartmental analysis of the scale of deployment of land-based medium and short-range missiles by the U.S. and Western countries, and taking into account international security and strategic stability, the Russian national leadership will formulate countermeasures.

#### Overseas Companies

OpenAI officially announces that ChatGPT has 700 million weekly active users, adds a rest reminder function, and hints that GPT-5 will be launched this week? Nick Turley, Vice President of OpenAI's ChatGPT product, officially announced that the weekly active users of the ChatGPT product will reach 700 million this week, a year-on-year increase of more than four times. He also said that this week is an important week. Earlier reports said that OpenAI will release GPT-5 in early August, which is expected to launch integrated reasoning (o3), mini/nano versions, and improvements in coding/performance.

How did OpenAI develop its reasoning model? ChatGPT, which made OpenAI famous, may just be a "beautiful accident." Inside the company, a grand plan starting with mathematics, codenamed "Strawberry," has quietly set off a "reasoning" revolution. Its ultimate goal is to create a general AI agent capable of independently handling complex tasks. "Ultimately, you just need to tell the computer what you need, and it will do all these tasks for you," said CEO Altman.

Performance decline and no buybacks; Buffett's Berkshire fell by 3.7% at one point during the session. Based on Berkshire's intraday low on Monday, it has fallen by about 16% from its intraday all-time high set in early May. Analysts pointed out that although they believe Abel, who will take over as CEO at the end of the year, will win investors' trust over time, recent positive catalysts for Berkshire should include increased investment activities, possible large-scale acquisitions, and stock buybacks. However, none of these have happened, which has made investors somewhat disappointed.

Tech giants are making more profits, but AI layoffs are intensifying. AI is accelerating the replacement of a large number of white-collar jobs, and enterprises are pursuing profit maximization through the "fewer people, higher efficiency" model. Companies such as Microsoft and Intel have significantly laid off employees while their profits have surged, prioritizing hiring talents who are in line with AI strategies. OpenAI's CEO Sam Altman even boldly predicted that there will be "billion-dollar companies run by one person" in the future.

Microsoft Research's latest AI insight: The concept of "jobs" will become a thing of the past; corporate organizations, performance, and HR systems will all face changes. Microsoft Research believes that AI will not suddenly "replace a person" but is quietly "rewriting the definition of work." In the future, what determines your workplace competitiveness is not how much you can do alone, but whether you have the ability to build a set of smart work combinations, allowing AI to assist you, complement you, and accelerate you. Whoever can design this system will be more valuable.

#### Industries/Concepts

1. Lawn mowing robots: Artificial intelligence replacing manual labor is still a major future trend. With the maturity of core technologies, further price reductions, improvement of product matrices, expansion of online and offline channels, and enhancement of market awareness, the global sales volume of lawn mowing robots is expected to reach 3 million units in the future.

2. Outdoor economy: Currently, China's outdoor industry is in a period of opportunity where multiple positive factors are jointly catalyzing accelerated growth. The industry scale is expected to double in the next five years, with long-term growth potential of more than 3 times, which will bring opportunities to the entire outdoor clothing industry chain.

3. Weight-loss drugs: Recently, there have been many fundamental developments in the research and development of innovative drugs in China's weight-loss field. Guotai Haitong Securities pointed out that companies in the domestic weight-loss metabolism field with advanced R&D progress, excellent clinical weight-loss data, and potential for overseas BD are expected to have more catalysts in the future.

4. Green electricity: In June, the price of green certificates continued to recover, increasing by 31.99% month-on-month, which was further higher than the 19.08% month-on-month growth in May, showing an accelerating upward trend in green certificate transaction prices. The call for the "carbon neutrality" era and electricity market-oriented reforms will run through the entire "14th Five-Year Plan" period, and the intrinsic value of power operators will be fully re-evaluated.

#### Preview of Today's Top News

- China's July S&P Global China PMI (formerly Caixin PMI).

- July services and composite PMI final values for the U.S., Eurozone, UK, and Japan.

- U.S. June trade balance.

- Eurozone June PPI.

- Earnings reports from AMD, Caterpillar, Arista Networks, and Pfizer.

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