Breakfast | Divergent trends among US tech giants: NVIDIA hits a new high, Apple drops over 1.5%

Market Overview U.S. macroeconomic data remains in a vacuum, and investors are concerned about bubble risks, leading to increased profit-taking demand. After opening lower, U.S. stocks rebounded towards the end of the session due to Microsoft's forecast that data center supply shortages will last until 2026, but the three major U.S. stock indices still closed down. The performance of the seven tech giants in the U.S. stock market was mixed, with Meta rising over 2%, NVIDIA hitting a new high, while Apple fell over 1.5%. Investors sold off cyclical sectors and shifted towards defensive sectors. Chinese concept stocks fell over 2%. U.S. Treasuries also faced selling pressure, with yields on major maturities rising by 1-2 basis points. The U.S. dollar rose by 0.72%, breaking above 99 and reaching a two-month high. Bitcoin fell about 3.3% from its daily high. Ethereum declined by 3.7%. The strong dollar, combined with the Israel-Hamas talks, led to a decline in precious metals during the session, with gold dropping 1.70%, falling below $4,000; silver, after historically breaking above $51, retreated over 5.6% before rebounding. U.S. oil fell more than 1.3% during the day. In the Asian session, the Shanghai Composite Index opened the fourth quarter with a gain, breaking above 3,900 points for the first time in 10 years. Shanghai gold and copper surged over 4%, while the semiconductor industry chain fell back in the afternoon, and Hong Kong stocks closed down, with pharmaceutical stocks declining. Key News The Ministry of Commerce of China has issued four announcements regarding export controls on rare earths, lithium batteries, superhard materials, and more. The U.S. government shutdown remains unresolved: the Senate has rejected the funding bill seven times, with Trump threatening to cut Democratic projects, while Republican leaders deny plans for major actions. Reports indicate that the U.S. Bureau of Labor Statistics is preparing to release September CPI data during the government shutdown. Besenser has interviewed 11 candidates for the Federal Reserve Chair, with four of them being the most promising. Federal Reserve Governor Barr emphasized inflation risks, stating that interest rate cuts need to be cautious, highlighting divisions within the Federal Reserve according to the Wall Street Journal. Federal Reserve "number three" Williams supports further interest rate cuts this year and does not believe the economy is on the brink of recession. U.S. Treasury Secretary Besenser: The deficit has dropped to the 5 range, hoping to reduce it to the 3 range in a few years. The U.S. is providing $20 billion in "blood transfusion" to Argentina, with Treasury Secretary Besenser announcing U.S. Treasury intervention in the Argentine foreign exchange market, leading to a rise in the peso. Gold and silver futures turned lower during the session, after spot silver historically broke above $51, reaching the highest level since the Hunt brothers' short squeeze. Analysis: Shanghai gold premium has turned negative, with Western ETFs dominating this round of new highs in gold. Microsoft predicts that data center supply shortages will last until 2026. NVIDIA, Oracle, and AMD are just the beginning, Altman: OpenAI will have more major deals. Intel debuted its brand new 18A process AI PC chip, with full production at its U.S. factories. AI demand continues to drive growth! TSMC's Q3 revenue exceeded expectations, with a year-on-year growth of 30% HSBC plans to privatize Hang Seng Bank for $13.6 billion, at a premium of over 30%. Market Summary US and European Stock Markets: The S&P 500 index closed down 0.28% at 6735.11 points. The Dow Jones Industrial Average fell 0.52% to 46358.42 points. The Nasdaq Composite dropped 0.08% to 23024.626 points. The European STOXX 600 index closed down 0.43% at 571.31 points. A-shares: The Shanghai Composite Index reported 3933.97 points, up 1.32%; the Shenzhen Component Index reported 13725.56 points, up 1.47%; the ChiNext Index reported 3261.82 points, up 0.73%. Bond Market: The yield on the US 10-year Treasury rose by 2.13 basis points to 4.1384%. The yield on the 2-year Treasury rose by 0.84 basis points to 3.5885%. Commodities: WTI November crude oil futures fell 1.66% to $61.51 per barrel. Brent December crude oil futures fell 1.55% to $65.22 per barrel. COMEX gold futures fell 1.96% to $3990.90 per ounce. News Details Global Highlights The Ministry of Commerce of China issues four announcements regarding export controls on rare earths, lithium batteries, superhard materials, etc.. On October 9, the Ministry of Commerce, in conjunction with the General Administration of Customs, announced export control measures for superhard materials, rare earth equipment and raw materials, five types of medium and heavy rare earths, lithium batteries, and artificial graphite anode materials, which will officially take effect on November 8.** US government shutdown dilemma: Senate rejects funding bill seven times, Trump threatens to cut Democratic projects, Republican leaders deny plans for a "big move". Trump stated that the cuts will affect "projects very popular with Democrats but not supported by Republicans," and the reductions will be "permanent." Senate Republican leaders explicitly denied considering using the so-called "nuclear option" to pass temporary funding bills without reaching the 60-vote threshold, and did not confirm next week's agenda. The House of Representatives remains in recess, with the Speaker maintaining a "48-hour notice" status but not committing to resuming sessions next week. Report: US Bureau of Labor Statistics prepares to release September CPI data during government shutdown. According to media reports citing a knowledgeable official from the US Department of Labor, the Bureau of Labor Statistics (BLS) has recalled some employees to prepare for the release of the critical September CPI inflation report This report is crucial for calculating the amount of Social Security payments in the United States next year. The U.S. September CPI report is very likely to be unable to be released on the originally scheduled date of October 15; however, it is still expected to be released before the Federal Reserve's FOMC policy meeting on October 28-29. Who will be the next Federal Reserve Chairman? Bostic has interviewed 11 candidates, 4 are most likely. According to reports, Trump will make a final decision from four major candidates: former Federal Reserve Governor Kevin Walsh, current Governor Waller, White House economic advisor Kevin Hassett, and BlackRock Chief Investment Officer Rick Rieder. Walsh supports Bostic's central bank reform proposals; Waller has proposed a balance sheet reduction plan; Hassett aligns with Trump's policy stance; Rieder is an experienced outsider. Federal Reserve Governor Barr emphasizes inflation risks, says rate cuts need to be cautious, Wall Street Journal: highlights divisions within the Federal Reserve. Federal Reserve Governor Barr stated that the Federal Reserve should remain cautious when further adjusting its policy stance, as the pace of price increases is still too fast. The Wall Street Journal noted that Barr's remarks indicate he may be skeptical of the market's general expectation that the Federal Reserve will continue to cut rates for the remainder of 2025. On the same day, according to the latest research from the Dallas Federal Reserve, the slowdown in immigration has led to a rebalancing of the labor market, and the cooling of employment is not a sign of weakness. Federal Reserve "third-in-command" Williams: supports further rate cuts this year, does not believe the economy is on the brink of recession. Williams stated that if inflation stabilizes around 3% and the unemployment rate rises slightly, he supports further rate cuts within this year to prevent a sharp slowdown in the labor market. He believes the U.S. economy is not in recession, inflation risks have eased but still require vigilance. Williams emphasized that monetary policy remains "moderately tight" and reiterated the Federal Reserve's decision-making independence, with all policies continuing to be data-driven. U.S. Treasury Secretary Bostic: Deficit down to the 5s, hopes to reduce it to the 3s in a few years. Bostic recently stated that the U.S. deficit as a percentage of GDP is now in the 5s, which is lower than the level in 2024; he hopes to reduce the deficit as a percentage of GDP to the 3s before the end of Trump's second term. Bostic expects the U.S. Treasury to issue more tax refunds next year. The U.S. "blood transfuses" $20 billion to Argentina, Treasury Secretary Bostic announces U.S. Treasury intervention in the Argentine exchange market, peso rises. Bostic announced that a $20 billion currency swap framework has been finalized and that the U.S. Treasury is directly purchasing Argentine pesos in the spot market for market intervention Bessent emphasized that the United States will take necessary measures to provide stability to the market and stated that a strong and stable Argentina aligns with U.S. strategic interests. Boosted by this news, Argentine sovereign bonds rose by 4.3 cents, and the exchange rate of the peso against the dollar increased by 0.7%. Silver futures turned lower during trading, spot silver fell back after historically breaking above $51. Earlier on Thursday, silver prices hit the highest record since the Hunt brothers' short squeeze! Silver prices have risen over 70% this year, outperforming gold, which has also reached new highs. The recent surge in silver prices benefited from tight supply in the London market, industrial demand, and safe-haven demand. If the dollar depreciates, it will boost silver more than gold, while rising gold prices will also drive silver prices higher. However, analysts warn that technical indicators show that gold and silver are severely overbought, and historically, periods of a strong dollar are often accompanied by a pause or adjustment in gold prices. Who is leading this round of new gold highs? Shanghai gold premium turns negative, Western ETF funds dominate. The macro team led by Zhou Junzhi at CITIC Construction Investment believes that the new highs in gold since August have been mainly driven by financial investors, particularly the recovery of ETF fund inflows. Analyzing through three high-frequency tracking dimensions: first, the Western market has regained dominance in ETF inflows, with the pricing focus shifting from "de-dollarization" to interest rate cut expectations; second, there is a disconnection between COMEX futures "quick money" positions and gold prices; third, the Shanghai gold premium has turned negative, reflecting a cooling of investment in non-U.S. regions, with Western funds regaining dominance in global gold investment. Microsoft predicts data center supply shortages will last until the first half of 2026, exceeding the previous expectation of the end of 2025. Although Microsoft has initiated a historic construction boom, adding over two gigawatts of capacity in the past year, the multi-year construction cycle and supply chain bottlenecks remain challenging. Customers are forced to turn to other cloud service providers or multi-region deployments to cope. NVIDIA, Oracle, and AMD are just the beginning? Altman: OpenAI will have more big deals. Sam Altman revealed that OpenAI will make more aggressive infrastructure bets in the coming months to meet the enormous demand generated by the next generation of AI models. Analysts believe these deals are centered around a "cross-shareholding" model—chip giants exchange investments or equity commitments for OpenAI orders, forming an "AI closed-loop economy." Intel's new 18A process AI PC chip debuts, with full production at U.S. factories. The 18A process is Intel's first 2-nanometer node developed and manufactured in the United States, achieving a 15% improvement in performance-to-power ratio and a 30% increase in chip density compared to the previous generation The Intel Core Ultra third-generation processors based on the Panther Lake architecture are expected to start shipping by the end of this year. Intel is preparing to mass-produce 18A process chips later this year at its Fab 52 facility in Arizona. AI demand continues to drive growth! TSMC's Q3 revenue exceeds expectations, with a year-on-year increase of 30%. TSMC's sales in September reached NT$330.98 billion, a year-on-year increase of 31.4%, but a quarter-on-quarter decrease of 1.4%; third-quarter revenue increased by 30% year-on-year to NT$989.9 billion, surpassing analysts' average expectations of NT$962.8 billion. HSBC plans to privatize Hang Seng Bank for $13.6 billion, at a premium of over 30%. Following the announcement, HSBC Holdings' stock price fell more than 6% in Hong Kong, while Hang Seng Bank surged over 26%, potentially creating the largest single-day gain in history. Domestic Macro Li Qiang meets with Kim Jong-un, General Secretary of the Workers' Party of Korea and Chairman of the State Affairs Commission. According to Xinhua News Agency, on the afternoon of October 9, Li Qiang met with Kim Jong-un in Pyongyang. Li Qiang pointed out that China is willing to strengthen high-level exchanges and strategic communication with North Korea, further promote traditional friendship, deepen practical cooperation, closely coordinate in international and regional affairs, enhance multilateral cooperation, firmly uphold and practice multilateralism, and promote the international order towards a more just and reasonable direction. Domestic Companies Merrill Lynch raises the target price for Seres, new M7 orders exceed expectations, expected Q3 profit of 3 billion yuan. Bank of America Merrill Lynch believes that the new Aito M7 received over 70,000 non-refundable orders within two weeks of its launch, with a conversion rate of 30%, showing strong order performance. The brand strength and product portfolio of AITO will continue to drive profit expansion, with Seres expected to achieve a net profit of 3 billion yuan in Q3, with a net profit per vehicle of 24,000 yuan. The target price for Seres has been significantly raised to 190 yuan, maintaining a buy rating. Overseas Macro Trump to undergo physical examination on Friday, White House calls it "routine," amid speculation over right hand bruising and swollen ankle. The 79-year-old Trump will undergo a physical examination this Friday, which the White House has termed "routine." This examination comes just six months after the last one and coincides with his swollen ankle and bruised right hand. The White House previously explained that the swelling was caused by venous insufficiency, and the bruising was a side effect of frequent handshakes and aspirin. U.S. drug tariffs may exempt generic drugs, including common medications like antibiotics, which account for 90% of Americans' daily medication Both the White House and the spokesperson for the U.S. Department of Commerce have confirmed that the U.S. government is not actively discussing imposing tariffs on generic drugs under the "Section 232" national security investigation framework. Although the likelihood of tariffs on generic drugs has decreased, reports indicate that the U.S. government is considering whether to issue an executive order to provide federal grants or loans to domestic manufacturers of key generic drugs. Amid a chorus of bearish voices, the dollar's "unexpected rebound" is underway. The yen and euro are weakening in tandem, and comments from Federal Reserve officials refuting aggressive rate cut expectations are providing multiple supports for the dollar. Currently, the dollar against the yen is setting a record for the longest consecutive gains this year, and market short positions on the euro have reached their highest level in a month. The U.S. stock sector that has risen the most this year is not AI or Bitcoin concept stocks, but gold mining! Gold prices have soared to $4,000 per ounce, igniting an epic rally in gold mining stocks. The S&P Global Gold Mining Index has surged 129% this year, far exceeding the tech and crypto sectors, with giants like Newmont and Barrick seeing their stock prices double. The profit leverage effect from rising gold prices has left mining companies with ample cash, but investors are wary of a repeat of the 2011 bubble. Goldman Sachs macro master: There are no signs of a shift to risk aversion in U.S. stocks, and asset buyers are "expanding the universe". Schiavone analyzes that the major global stock indices are still firmly above all key moving averages, and there are no clear signals or catalysts indicating a need to shift to risk aversion; potential buyers are still lining up to enter, and this slow expansion of buyers constitutes a sustained positive for the market. He stated that the current strategy is to "continue chasing risk until the market's direction changes." Not just the hottest stock market concept, AI has become a major story in the U.S. bond market. The debt scale of AI-related companies has surpassed that of traditional banking, becoming the largest sector in investment-grade bond indices. Analysts warn that if the AI paradigm shifts, the bursting of the AI credit bubble will have a greater impact than a stock market crash. Is the U.S. choosing an "escape velocity strategy" before the midterms? Bank of America says the Fed will rescue the housing market, recommending trading "large leveraged positions". Bank of America stated that on the eve of the midterm elections, the U.S. may adopt an "escape velocity strategy" to stimulate economic growth, and the Federal Reserve may implement more aggressive rate cuts to unfreeze the housing market. If more aggressive rate cuts are adopted (with the federal funds rate dropping to 1-2% and the 10-year Treasury yield falling to 3.25%), it will benefit small-cap value stocks, home builders, long-term Treasuries, emerging market bonds, and gold Overseas Companies Despite limited invitations, Sora reached over one million downloads in less than five days, faster than ChatGPT when it had no restrictions. Google Cloud launches AI platform Gemini Enterprise Edition, competing with Microsoft and OpenAI for the enterprise AI market. Gemini Enterprise Edition integrates several of Google's existing technologies into a unified platform, allowing employees to converse with enterprise data, search for information, and use AI agents to perform tasks. The platform costs $30 per month and aims to provide user-friendly AI tools for employees across departments. Amazon's new enterprise AI assistant mobilizes multiple app services for workers, fulfilling everything ChatGPT cannot do! Quick Suite costs $20 per month and integrates chatbot and AI agent functionalities, capable of analyzing sales data, generating reports, or summarizing online content. This tool can integrate various apps such as Slack, Salesforce, Microsoft file storage, and Adobe creative tools, allowing employees to directly extract and utilize data without switching between different apps and enterprise systems. CoreWeave CEO refutes "AI closed loop": Big companies are investing in infrastructure, where is the loop? This is all demand. CoreWeave CEO Michael Intrator stated that tech giants like Meta, Microsoft, Amazon, and Google are heavily purchasing infrastructure services for clients, driven by real demand for "fundamental infrastructure construction." In such large-scale infrastructure development, "seeing partnerships is not uncommon, as people try to provide infrastructure services for consumers," a dynamic that will also appear in other markets. Brain-computer interfaces—humans and AI "coexisting". As AI becomes more human-like, humans also become more machine-like. Morgan Stanley stated that products like Neuralink have allowed paralyzed individuals to control computers with their thoughts and are committed to restoring sight to the blind. This potential market, valued at up to $400 billion, is starting from the medical field and moving towards a broader future of human-machine coexistence. However, alongside rapid technological advancements, there are ethical challenges such as data security and social equity. The hottest "Ethereum treasury" faces short selling, business model under attack from Kerrisdale. As the largest public holder of Ethereum, BitMine was targeted by short-selling firm Kerrisdale Capital on Wednesday, which claimed that its "buy coin and increase issuance" model has failed, with valuation premiums dropping from 2 times to 1.2 times, and frequent stock issuances leading to investor fatigue BitMine's stock price initially fell and then rose on Tuesday, closing up 1.35% after a turbulent session, having surged over 170 times year-to-date, but still halved from its July peak. Betting on the liver disease treatment sector, Novo Nordisk spends $5.2 billion to acquire Akero. Novo Nordisk announced it would acquire the American biotechnology company Akero Therapeutics for up to $5.2 billion to obtain its potential drug efruxifermin for treating metabolic hepatitis (MASH). This transaction marks the first major acquisition under the new CEO. Akero's stock price surged over 19%, while Novo Nordisk's stock price fell nearly 2%. "Disappointing" earnings outlook triggers sell-off, Ferrari's stock price plunges 16%, marking the largest drop since 2016. Ferrari raised its 2025 net revenue forecast from "over €7 billion" to "at least €7.1 billion" and set a 2030 net revenue target of approximately €9 billion. Analysts generally believe this long-term guidance is overly conservative. At the same time, Ferrari announced an adjustment to its electrification strategy, significantly lowering its 2030 electric vehicle sales target from 40% to 20%. Uniqlo's parent company Fast Retailing reports a 13% increase in operating profit for fiscal year 2025, setting a record for four consecutive years, and raises profit guidance for fiscal year 2026. Fast Retailing set a profit record for the fourth consecutive year, with operating profit for fiscal year 2025 reaching ¥564.27 billion, a 13% year-on-year increase, exceeding market expectations. International business became the main growth engine, with the Chinese market contributing the most. The company raised its fiscal year 2026 forecast to ¥610 billion, expecting a weak yen to significantly boost overseas revenue and drive domestic duty-free consumption. Today's News Preview San Francisco Fed President Mary Daly, Chicago Fed President Austan Goolsbee, and St. Louis Fed President James Bullard will speak. U.S. October preliminary consumer sentiment and inflation expectations from the University of Michigan. Nobel Peace Prize nominees will be announced.