<h3><strong>Market Overview</strong></h3>
<p>On Monday, <strong>the unclear outlook on tariffs limited the rise of US stocks</strong>, with the three major US stock indices closing higher for two consecutive days, although they had all turned negative at some point during the day. Apple rose over 2%, NVIDIA initially rose 3% before turning negative, General Motors rose over 3%, and Ford rose over 4%. <strong>The China concept index closed up over 3%</strong>, with Alibaba rising nearly 6%.</p>
<p>After the Federal Reserve announced inflation expectations, <strong>the two-year US Treasury yield plunged more than 10 basis points during the day</strong>. The US dollar index fell below 100 for two consecutive days, approaching a three-year low. The offshore RMB rose above 7.28 before retreating over 400 points. Bitcoin surged nearly $3,000 during the day, breaking above $85,000.</p>
<p>Crude oil experienced a thrilling two-day rise, having dropped over 1% at one point. Spot gold turned negative after hitting a historical intraday high for three consecutive days, <strong>falling over 1% at one point</strong>. Copper rose over 3% at one point.</p>
<p>During the Asian session, A-shares rebounded throughout the day, with the consumer sector collectively rising. The Hang Seng Index closed up over 2%, technology stocks broadly increased, and the gains in government bond futures expanded in the afternoon.</p>
<h3><strong>NVIDIA Announces First Domestic Production of AI Supercomputers in the US</strong></h3>
<p>It is expected to create $500 billion in output value within five years. NVIDIA's Blackwell chips have already begun production at TSMC's factory in Phoenix, Arizona. At the same time, NVIDIA is collaborating with Foxconn (Houston) and Wistron (Dallas) in Texas to build supercomputer manufacturing plants. According to company news, these two factories are expected to begin mass production in the next 12-15 months.</p>
<h3><strong>OpenAI Launches First Nano Model</strong></h3>
<p>With a million context and significantly enhanced coding capabilities beyond GPT-4.5. OpenAI officially launched the new GPT-4.1 series models in the API, including three new members: GPT-4.1, GPT-4.1 mini, and GPT-4.1 nano. The first Nano model introduced: GPT-4.1 nano is OpenAI's fastest and cheapest model to date. Although small, it has impressive capabilities (MMLU 80.1%, GPQA 50.3%) and also features a context of 1 million tokens, making it very suitable for low-latency scenarios.</p>
<h3><strong>General Motors and Ford Surge During the Day, Trump Considers 25% Tariff Exemption on Imported Cars and Parts</strong></h3>
<p>On Monday, during US stock trading, General Motors rose 3.9%, Ford rose 3.64%, while Tesla still fell 1.46%. President Trump stated that he is exploring the possibility of exempting tariffs on imported cars and parts to give automakers more time to establish production bases in the US.</p>
<h3><strong>Goldman Sachs Reports Record Stock Trading Revenue in Q1, Investment Banking Revenue Down 8.1% Year-on-Year</strong></h3>
<p>Solomon warned: the operating environment has changed significantly. Net income increased by 6% year-on-year to $15.06 billion, marking the third-highest level in the company's history; earnings per share were $14.12, up 22% year-on-year; stock trading revenue increased by 27% year-on-year to $4.19 billion, setting a historical record;
Announces a stock repurchase plan of up to $40 billion.</p>
<h3><strong>Trade war threatens high-end consumption, LVMH's Q1 revenue declines instead of increasing, core business revenue falls 5% more than expected</strong></h3>
<p>In Q1, LVMH's organic revenue fell 3%, while analysts expected a growth of 1.1%. The largest business segment, fashion and leather goods, saw organic revenue decline by 5%, with analysts expecting a decrease of less than 1%. In Asia, excluding Japan and including China, organic revenue fell 11%, while analysts expected a decline of less than 5%. LVMH stated that it is considering price increases to cope with U.S. tariffs. After the earnings report, LVMH's U.S. stock fell more than 9% at one point, closing down 6.2%.</p>
<h3><strong>Nikkei 225 index rises over 1%, Japan expected to start tariff negotiations with the U.S. this week</strong></h3>
<p>Japanese Prime Minister Shigeru Ishiba stated in parliament on Monday that Minister of Economy, Trade and Industry Ryozo Akizuki will visit the U.S. as the chief trade negotiator for the first time this week to initiate trade negotiations.</p>
<p>What conditions will the U.S. propose in the tariff negotiations with Japan? The U.S.-Japan trade negotiations will be a core topic this week. Nomura Securities pointed out that <strong>the U.S. aims to make Japan a &#34;model case&#34; for reaching agreements with other countries</strong>. Although the Japanese government has proactively proposed large-scale investments and energy purchases in the U.S., the U.S. side may still put forward additional demands, including setting trade surplus targets, promoting yen appreciation, extending holdings of U.S. Treasury bonds, and increasing government spending, among other conditions that Japan may find difficult to accept.</p>
<p>Japan may need to take significant fiscal measures this week to cope with tariff impacts, <strong>tax cuts + cash payments!</strong> According to a Nomura report, Prime Minister Shigeru Ishiba has begun coordinating the drafting of a supplementary budget for the fiscal year 2025, with a final decision to be made after assessing the U.S.-Japan tariff negotiations on April 17. Nomura predicts that if subsidies of 50,000 yen per person are distributed to all citizens, the scale of this supplementary budget could approach 10 trillion yen. Additionally, tax cuts on essential goods may reduce fiscal revenue by about 2 trillion yen.</p>
<h3><strong>Federal Reserve: U.S. short-term inflation expectations hit 18-month high in March, long-term inflation expectations decline</strong></h3>
<p>In March, the one-year inflation expectation in the U.S. rose to 3.58%, the highest since September 2023, up from 3.13%. The three-year inflation expectation remained steady at 3%, while the five-year inflation expectation fell from 3.0% to 2.9%. <strong>The panic over unemployment in March reached the highest level since the COVID-19 pandemic</strong>, fueled by President Trump's tariffs impacting inflation prospects.</p>
<p>Federal Reserve Governor: <strong>The impact of tariffs on inflation is temporary, and if the inflation impact is small, a rate cut may occur later this year.</strong> Federal Reserve Governor Waller stated that the new tariff policy is &#34;one of the largest shocks to the U.S. economy in decades,&#34; but the impact of tariffs on inflation is expected to be temporary. He mentioned that if the impact of tariffs is relatively small, the Federal Reserve may consider a rate cut later this year.</p>
<h3><strong>U.S. Treasury Secretary hopeful for a tariff agreement with China, warns that tariffs &#34;are not a joke&#34;</strong></h3>
<p>U.S. Treasury Secretary Becerra stated that he still hopes to reach a significant trade agreement with Beijing, adding that this requires a model that is completely different from past trade and currency agreements. Becerra emphasized that any U.S.-China negotiations must take place at the &#34;highest level.&#34; &#34;This is not a joke. I mean, the numbers involved are huge,&#34; Becerra said, &#34;I don't think anyone believes these are sustainable, and no one wants these tariffs to remain, but this is by no means a joke.&#34;</p>
<p>U.S. Treasury Secretary Becerra &#34;market rescue&#34;: <strong>There is no evidence that sovereign nations are selling U.S. Treasuries, and if necessary, we can increase the repurchase of U.S. Treasuries; discussions on the next Federal Reserve chairman will take place in the fall.</strong> Becerra attributed the recent bond market sell-off to deleveraging and stated that the Treasury has tools to address any chaos that may arise when necessary. Becerra downplayed concerns about the dollar's status as a global reserve currency and expressed confidence in the U.S.'s ability to negotiate favorable trade agreements. He reiterated that the U.S. still maintains a strong dollar policy.</p>
<h3><strong>IMF states that trade tensions could lead to a stock market crash</strong></h3>
<p>The International Monetary Fund (IMF) stated in a report that significant geopolitical risk events, including trade tensions, could trigger a sharp adjustment in stock prices. This, in turn, could lead to market volatility, threatening financial stability. The IMF did not mention specific events but noted that since 2022, news-based risk indicators (including conflicts, wars, terrorist attacks, military spending, and trade restrictions) have risen sharply. The IMF urged financial institutions to hold sufficient capital and liquidity to help them cope with potential losses arising from geopolitical risks and encouraged them to use stress tests and other analyses to identify and manage such risks.</p>
<h3><strong>Trump administration begins investigation into drug and semiconductor imports</strong></h3>
<p>Notices in the Federal Register indicate that the Trump administration has begun an investigation into drug and semiconductor imports as part of imposing tariffs on these two industries under the guise of national security. President Trump stated that he expects to impose tariffs on imported drugs in the near future.</p>
<h3><strong>Dalio</strong>: <strong>Trump's trade war could lead to &#34;worse consequences than an economic recession&#34;</strong></h3>
<p>Dalio stated that Trump's tariff policy has been &#34;very destructive so far.&#34; If instability in the monetary system, domestic political division, and international conflict occur simultaneously, it could lead to consequences more severe than the collapse of the monetary system in 1971 or the financial crisis in 2008.</p>
<h3><strong>Bank of America Hartnett: &#34;U.S. denialism&#34; begins, go long on short-term bonds, short U.S. stocks</strong></h3>
<p>Michael Hartnett pointed out that U.S. assets are facing a &#34;buyer strike&#34; from foreign investors. He suggested &#34;Long 2s, Short Spoos&#34;—until the Federal Reserve significantly cuts interest rates to break the clearing cycle, <strong>and Trump suspends tariff policies to reverse the global economic recession.</strong></p>
<p>After experiencing the worst sell-off in over 20 years, is the signal for U.S. Treasuries to bottom out here? Morgan Asset Management believes that despite recent market volatility, overseas investors have shown strong buying intent, and the Federal Reserve has indicated its readiness to support the U.S. Treasury market at any time. U.S. Treasuries are nearing a price bottom and yield peak
&#34;The 'Trump Shock' Best Benchmark: What Happened During the 'Nixon Shock' in 1971?&#34; The 'Nixon Shock' not only failed to achieve its intended goals but also became a key driver of severe inflation in the United States during the 1970s, prompting investors to shift their asset allocation towards gold and physical assets for preservation of value. Businesses and savers increasingly moved their activities from banks to the bond market.</p>
<h3><strong>Chinese Central Bank Media Article: The Three Layers of Meaning Behind 'Timing for Reserve Requirement Ratio and Interest Rate Cuts'</strong></h3>
<p>According to the Financial Times, Yu Yongding explained that he understands 'timing' to have three layers of meaning. First, if there is some adverse change in China's macroeconomic situation, such as facing external shocks like increased tariffs from the United States, which negatively impacts the Chinese economy. Second, if the interest rate pressure generated by expansionary fiscal policy undermines the effects of fiscal expansion. Third, when the capital markets (stock market, real estate market) suffer a certain shock and plummet, triggering systemic economic and financial risks.</p>
<h3><strong>Top Ten Foreign Trade Cities in China Take Collective Action to Respond to Tariff Shocks, Latest Measures Accelerate Integration of Domestic and Foreign Trade</strong></h3>
<p>The top ten foreign trade cities in mainland China have collectively taken action, introducing the latest policy measures to stabilize foreign trade and expand consumption. Shenzhen is actively serving and supporting enterprises to vigorously explore domestic and foreign markets, while Guangzhou will also support the formulation and implementation of policies to promote the sales of quality foreign trade products in the domestic market. Major leaders in several districts of Shanghai have conducted research on key foreign trade enterprises in their jurisdictions to further assist foreign-funded and foreign trade enterprises in expanding their development paths.</p>
<h3><strong>China's State Administration for Market Regulation: 37 Measures Introduced to Support the Development of Private Enterprises, Will Rectify Abuse of Administrative Power to Exclude and Restrict Competition</strong></h3>
<p>China's State Administration for Market Regulation stated that it has recently issued a &#34;List of Key Measures to Implement the Spirit of the Private Enterprises Symposium,&#34; proposing 37 key measures, including deploying special actions to rectify the abuse of administrative power to exclude and restrict competition, special actions for antitrust enforcement in the livelihood sector, and random checks for fair competition reviews. It will steadily implement the investigation and handling of key monopoly cases and resolutely eliminate various obstacles to the equal use of production factors and fair participation in market competition</p>

NVDA

LVMUY

<p>Besant is optimistic about the US-China tariff agreement and warns that the tariff issue is serious. The Trump administration has begun investigations into drug and semiconductor imports, which may lead to tariffs. Federal Reserve Governor Waller pointed out that tariff policies could lead to an economic recession, necessitating interest rate cuts to address high inflation. The IMF stated that trade tensions could lead to a stock market crash</p>

- U.S. stock indices experienced limited gains amid uncertain tariff prospects, with notable movements in major companies like Apple and Nvidia.  
- The Federal Reserve reported a rise in short-term inflation expectations, while long-term expectations decreased, indicating potential economic volatility.  
- Japan is set to initiate trade negotiations with the U.S. this week, focusing on tariffs, as the IMF warns that geopolitical risks could lead to significant market adjustments.

LB Select

Breakfast | U.S. Treasury Secretary: Hopeful for a tariff agreement with China, warns that tariffs "are not a joke"