<h2>Market Overview</h2>
U.S. stocks welcomed progress in U.S.-China talks, with all three major U.S. stock indices posting their largest gains in a month, the NASDAQ rising over 4% and returning to a bull market; tech giants supported the rise of U.S. stocks, with Amazon up over 8%, Meta nearly 8%, Tesla nearly 7%, and Apple over 6%. Chinese concept stocks performed even better, with the Chinese concept index rising over 5%, XPeng up over 7%, Li Auto and Pinduoduo up over 6%, and Alibaba nearly 6%.
Risk appetite significantly increased, leading to a plunge in U.S. Treasury prices, with the two-year U.S. Treasury yield rising over 10 basis points during the session. The German stock index hit a new all-time high.
The U.S. dollar index rose over 1% during the session, reaching a four-week high; the Japanese yen fell over 2%; the offshore yuan surged nearly 500 points, breaking through 7.20; Bitcoin briefly fell nearly $5,000 after breaking above $105,000.
Crude oil rose for three consecutive days to a two-week high, with U.S. oil rising over 4% during the session. Gold prices plunged, falling to the second-lowest level this month, with futures gold dropping 4% at one point.
In the Asian session, the ChiNext index rose 2.6%, military stocks surged, Hong Kong stocks soared, with the Hang Seng Index skyrocketing over 5%, consumer electronics rising sharply, and government bonds collectively falling.
<h2>Macroeconomic Information</h2>
The U.S. and China have each canceled a total of 91% of the additional tariffs and suspended the implementation of 24% of the counter-tariffs
The &#34;Joint Statement of the U.S.-China Geneva Economic and Trade Talks&#34; was released.
The Ministry of Commerce of China: The U.S. and China have each canceled a total of 91% of the additional tariffs and suspended the implementation of 24% of the counter-tariffs. This high-level economic and trade meeting between the U.S. and China has made substantial progress, significantly reducing bilateral tariff levels. The U.S. has canceled a total of 91% of the additional tariffs, and China has correspondingly canceled 91% of the counter-tariffs; the U.S. has suspended the implementation of 24% of the &#34;reciprocal tariffs,&#34; and China has also correspondingly suspended the implementation of 24% of the counter-tariffs.
Xinhua Commentary: U.S.-China Economic and Trade Talks Ease Pressure and Boost Confidence for the Global Economy. The holding of this meeting and its positive outcomes once again prove that equal dialogue should be the basic attitude of major powers in solving problems. As two countries with different national conditions, it is inevitable that there will be some differences between the U.S. and China; the key is to respect each other's core interests and major concerns and find proper solutions to the problems. Through an equal dialogue mechanism, both sides can clearly express their attitudes towards their main concerns, clarify relevant facts, explain the reasons for their concerns, explore the factors leading to relevant issues, and discuss possible solutions.
U.S.-China negotiations: How much &#34;ice-breaking&#34; has occurred? Minsheng Securities believes that within the next three months, the tariffs imposed by the U.S. on China this year may drop to a minimum of 10%, but there is a possibility that tariffs on China may rise after 90 days. The 20% fentanyl tariff may be canceled, while the suspension of the 24% tariff may not be completely lifted.
The easing of U.S.-China trade tensions has boosted a strong rebound in U.S. stocks. Media reports suggest that the easing situation has released the clearest signal to investors so far: the Trump administration is taking a more moderate stance in handling conflicts that had previously caused turmoil in global markets.
The Federal Reserve Tests the Limits of &#34;Wait-and-See&#34;
Disagreements have emerged between the Federal Reserve and other major central banks as they attempt to assess the impact of rapidly changing global trade wars on the economy.
The Federal Reserve has kept interest rates unchanged in the face of rising inflation risks, while many of its peers are cutting rates to mitigate the impact of an impending slowdown in growth.
The Fed's cautious stance could potentially leave Chairman Jerome Powell and his team lagging behind the situation once again.
Due to last week's decision to maintain interest rates, the policy interest rate gap between the Federal Reserve and the European Central Bank has reached its highest level in over two years. U.S. interest rates have not been higher than Canadian rates since 1997.
Powell stated last week that he and his colleagues can maintain a patient policy stance because the U.S. economy appears to be doing well. Growth and the labor market are strong, and inflation is close to their 2% target.
After the Fed kept its policy unchanged, he told reporters that the cost of waiting is &#34;quite low.&#34; &#34;We can act quickly when the time is right. But there is too much uncertainty... I really can't give you a timeframe.&#34;
The implication here is that any economic damage caused by delaying the return to an easing cycle—remember, the Fed cut rates by 100 basis points between August and December last year—will be offset by subsequent more aggressive measures.
Trump Signs Executive Order to Slash Drug Prices
Trump stated that the principle of this executive order is to ensure that Americans pay the lowest prices for drugs that other developed countries pay, &#34;some prescription drugs and prices will almost immediately drop by 50% to 80% or even 90%.&#34; The U.S. Department of Commerce will begin investigating how the EU &#34;extorts&#34; drug companies, threatening to block EU drugs from entering the U.S. unless the EU agrees to sell its drugs at &#34;very low&#34; prices.
U.S. pharmaceutical companies like Eli Lilly saw their stocks rise during the day, with analysts noting that the wording of the executive order is vague and lacks specific implementation details.
U.S. April Budget Surplus of $258.4 Billion
Higher than the same period last year, customs tariff revenue reached a record high. Data released by the U.S. Treasury Department shows that the federal government's budget surplus in April increased by about 23% year-on-year. U.S. customs tariff revenue in April reached $16 billion, a record high, up $9 billion year-on-year, an increase of 130%. According to Bloomberg's compilation, this is the highest monthly customs revenue in at least a decade.
<h2>Company Information</h2>
Apple Price Increase
Avoiding discussions on tariffs, Apple is rumored to be considering raising the prices of the new iPhone. Reports indicate that Apple is contemplating increasing the prices of the iPhone series to be launched this fall, but the company will never publicly attribute the price increase to tariffs under U.S. trade policy. It is currently unclear what new features Apple will offer to justify the price increase.
Trump: On Monday, he spoke with Apple CEO Tim Cook, who indicated that Apple will increase its planned investment amount in the U.S. to $500 billion.
CK Hutchison Responds to Port Transactions: Absolutely impossible to proceed under any illegal or non-compliant circumstances
CK Hutchison Holdings announced that it originally planned to discuss the port transaction at the shareholders' annual meeting on May 22. However, in light of recent inquiries from shareholders and the media, CK Hutchison Holdings Limited hereby states: this transaction can never take place under any illegal or non-compliant circumstances.
<h2>Analyst Opinions</h2>
Tariff panic subsides, Morgan Stanley's Wilson warns U.S. stocks: it is too early to be optimistic now. Morgan Stanley believes that the two factors supporting the continued rebound of U.S. stocks have not yet materialized. Last week, Powell reiterated a &#34;wait-and-see&#34; attitude, and the yield on the 10-year Treasury bond has now exceeded 4.4%. Attention is on the next resistance level for the S&amp;P 500 at 5750-5800 points.
Bank of America’s Hartnett: U.S. stocks &#34;sell the fact,&#34; &#34;short the dollar&#34; before Fed rate cuts, and &#34;go long on 5-year U.S. Treasuries&#34; before the Republican budget. Hartnett, known as &#34;Wall Street's most accurate analyst,&#34; believes that U.S. stocks have already priced in expectations for a trade agreement/lower tariffs in the second quarter and expects the market to &#34;buy the expectation, sell the fact.&#34; The macro factors likely to drive the market higher are most likely to come from the &#34;three Cs&#34;: China deal, Rate Cuts, and strong Consumer demand. In the context of macro changes, the most diversified portfolio, such as a 25/25/25/25 allocation of cash/gold/stocks/bonds, may outperform the traditional 60/40 stock-bond allocation.
The market is too optimistic, Bank of America is bearish on European stocks: expected to drop 15% by the third quarter. The Bank of America Merrill Lynch report points out that although European stocks have rebounded strongly by over 15% since early April, the market has priced in the easing of policy uncertainty too quickly, posing a risk of disappointment. Bank of America expects global PMI to decline to 48 in the third quarter, and policy uncertainty will not decrease as sharply as expected. The Stoxx 600 index has about 15% downside potential in the third quarter, with a target of 460 points, and European cyclical stocks are expected to underperform defensive stocks by more than 10%

.IXIC

.SPX

.DJI

.HXC

YINN

Tech giants support the rise of US stocks, with Amazon up over 8%, Meta up nearly 8%, Tesla up nearly 7%, and Apple up over 6%. Chinese concept stocks performed even better, with the Chinese concept index closing up over 5%

- U.S. stock indices surged following progress in U.S.-China trade talks, with the Nasdaq rising over 4% and returning to a bull market.  
- The talks resulted in the cancellation of 91% of tariffs, significantly easing trade tensions and boosting market confidence.  
- Despite the positive developments, analysts caution that optimism may be premature, as underlying economic uncertainties remain.

LB Select

NASDAQ Composite Index

S&P 500

Dow Jones Industrial Average

NASDAQ Golden Dragon China Index

Direxion FTSE China Bull 3X

Breakfast | After the China-U.S. talks, U.S. stocks surged, with the NASDAQ rising over 4% and the China Concept Index rising over 5%