---
title: "Breakfast | The 20th Central Committee's Fourth Plenary Session is about to be held, He Lifeng talks with U.S. officials"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/261781191.md"
description: "Last Friday, hopes for a thaw in trade tensions reignited, leading to a rebound in U.S. stocks. The three major U.S. stock indices opened lower but closed higher, with a cumulative rebound of at least over 1% for the week. Earnings reports alleviated concerns about bad debts, causing regional bank stocks to rebound, with the regional bank index rising nearly 2%. Banks Zions and Western Alliance, which had plummeted on Thursday due to bad debt issues, rose nearly 6% and over 3%, respectively. Investment bank Jefferies, involved in the credit crisis, rose nearly 6%. The chip index halted its two-day winning streak but rose nearly 6% for the week. Oracle, which had risen against the trend, fell nearly 7% the next day. After Trump stated that weight loss drugs might decrease in price, Novo Nordisk's European stock fell over 6%"
datetime: "2025-10-19T23:52:45.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/261781191.md)
  - [en](https://longbridge.com/en/news/261781191.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/261781191.md)
---

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# Breakfast | The 20th Central Committee's Fourth Plenary Session is about to be held, He Lifeng talks with U.S. officials

## Market Overview

Last Friday, **hopes for easing trade tensions reignited**, **U.S. stocks rebounded**, with the three major U.S. stock indices opening lower and closing higher, accumulating a rebound of at least over 1% for the week; **earnings reports alleviated bad debt concerns**, leading to a rebound in **regional bank** stocks, with the regional bank index rising nearly 2%. Banks **Zions** and Western Alliance, which had plummeted on Thursday due to bad debt issues, rose nearly 6% and over 3% respectively; investment bank Jefferies, involved in the credit crisis, rose nearly 6%; the **chip index** halted its two-day winning streak but rose nearly 6% for the week; **Oracle** fell nearly 7% the day after rising against the trend. After Trump stated that weight loss drugs might decrease in price, Novo Nordisk's European stocks fell over 6%.

**U.S. Treasury** prices **fell back**, with the two-year U.S. Treasury yield rising after hitting a three-year low, still declining for three consecutive weeks. **Gold and silver** hit new highs during the day before **plummeting**, with spot gold dropping over 3% and **silver once falling nearly 7%**. **Gold has risen for nine consecutive weeks**, with futures gold rising over 5% for the week, marking the largest weekly increase in nearly five months.

The U.S. dollar index turned up after hitting a weekly low for three consecutive days, while the offshore yuan briefly broke 7.12 to reach a new high in over three weeks, later dropping over a hundred points; Bitcoin fell over 5% during the day, dropping below $104,000, marking a nearly four-month low, before narrowing more than half of its losses.

Crude oil ended a three-day decline, temporarily leaving a five-month low, but still fell over 2% for the week, marking three consecutive weeks of decline.

During the Asian session, A-shares and Hong Kong stocks underwent significant adjustments, with the Shanghai Composite Index falling nearly 2%, over 4,800 stocks in the entire market declining, Agricultural Bank rising against the trend to hit a new high, the Hang Seng Tech Index falling over 4%, and Shanghai gold breaking the 1,000 yuan mark.

## Key News

> The **20th Central Committee's Fourth Plenary Session** was held in Beijing from October 20 to 23 to discuss suggestions for formulating the "14th Five-Year Plan."
> 
> **He Lifeng** held a **video call with U.S. Treasury Secretary Janet Yellen and Trade Representative Katherine Tai**, where both sides had candid, in-depth, and constructive exchanges on important issues regarding bilateral economic and trade relations, **agreeing to hold a new round of China-U.S. economic and trade consultations as soon as possible**.
> 
> **General Secretary of the Communist Party of China** sent a congratulatory message to **Zheng Liwen on being elected as the chairman of the Kuomintang**, and Zheng Liwen replied with thanks.
> 
> **State Council Meeting**: **Continuously promote cost reduction and quality improvement in logistics**, increase investment in logistics and warehousing facilities; **accelerate the improvement of the green trade policy system**, enhance the green and low-carbon development capabilities of foreign trade enterprises, and expand the import and export of related products and technologies; **support market entities to increase grain purchasing efforts**.
> 
> The Governor of the People's Bank of China **Pan Gongsheng**, the head of the Financial Regulatory Administration **Li Yunzhe**, and the Chairman of the China Securities Regulatory Commission **Wu Qing** will attend the **2025 Financial Street Forum Annual Conference from October 27 to 30 and deliver keynote speeches**.
> 
> **The Ministry of Finance and three other departments**: Starting from November 1, **adjust the duty-free shopping policy for travelers from Hainan's offshore islands**.
> 
> **Shanghai gold** broke the 1,000 yuan mark on Friday, continuing to hit new highs; **the Shanghai Futures Exchange**: **adjusted the margin ratio and price limit for gold and silver futures trading**
> 
> **The United States** will impose a **25% tariff on medium and heavy trucks** and a **10% tariff on passenger cars** starting November 1; before the Supreme Court's hearing on equal tariffs in November, the **Trump administration** adjusted its strategy, offering **various "exemptions" to hedge legal risks**.
> 
> **Regional bank** stocks rebounded, with multiple banks' **financial reports showing loan provisions below analysts' expectations**, alleviating concerns over bad debts. Executives reassured that "credit quality is robust," with Truist rising nearly 4% after its earnings report; "bond king" Gross stated that **gold has become** a momentum/**Meme asset**, and **regional banks' "cockroaches" will continue to affect stocks and bonds**.
> 
> After three meetings at the White House in eight months, **Trump** excluded a **tripartite meeting between the U.S., Russia, and Ukraine**, stating he hopes to end the war without considering supplying Ukraine with "Tomahawk" missiles. **Zelensky** suggested exchanging Ukrainian drones for "Tomahawks," expressing **willingness to participate in a meeting between U.S. and Russian leaders in Hungary**; the Russian side confirmed that **Putin and Trump may meet within two weeks**.
> 
> **Japan's Liberal Democratic Party and Japan Innovation Party** have basically reached a consensus on **joint governance**, with **Sanae Takaichi** nearing the position of "Japan's first female Prime Minister," but the future of the "Sanae deal" remains uncertain.

## Market Summary

**U.S. and European Stock Markets**: The S&P 500 rose 0.53% to 6664.01 points, with a weekly gain of 1.70%. The Dow Jones increased by 0.52% to 46190.61 points, with a weekly gain of 1.56%. The Nasdaq rose 0.52% to 22679.975 points, with a weekly gain of 2.14%. The European STOXX 600 index fell 0.95% to 566.24 points, with a weekly gain of 0.37%.

**A-shares**: The Shanghai Composite Index fell 1.95% to 3839.76 points, the Shenzhen Component Index fell 3.04% to 12688.94 points, and the ChiNext Index fell 3.36% to 2935.37 points.

**Bond Market**: By the end of the bond market, the yield on the U.S. ten-year benchmark Treasury bond was about 4.01%, rising about 4 basis points during the day, with a cumulative decline of about 2 basis points for the week; the yield on the two-year U.S. Treasury bond was about 3.46%, rising about 4 basis points during the day, with a cumulative decline of about 4 basis points for the week.

**Commodities**: WTI November crude oil futures rose 0.14% to $57.54 per barrel; Brent December crude oil futures rose 0.38% to $61.29 per barrel, with a cumulative decline of about 2.3% for the week. COMEX December gold futures fell 2.12% to $4213.3 per ounce, with a cumulative gain of 5.32% for the week. COMEX December silver futures fell about 6% to $50.104 per ounce, with a cumulative gain of 6.05% for the week.

## News Details

### **Global Highlights**

The Fourth Plenary Session of the 20th Central Committee of the Communist Party was held in Beijing from October 20 to 23. CCTV News provides a graphic overview of the Fourth Plenary Session. According to CCTV News, the main agenda of the Fourth Plenary Session includes: the Political Bureau of the Central Committee reporting work to the Central Committee, **studying suggestions for formulating the 15th Five-Year Plan for national economic and social development**; the meeting analyzes the current economic situation and deploys economic work for the second half of the year.

-   New Expectations for the Fourth Plenary Session. The macro team at Minsheng Securities believes that the significant signals to be conveyed by the Fourth Plenary Session include: first, leveraging the institutional advantages of concentrating efforts to accomplish major tasks, winning strategic initiative in fierce international competition; second, systematically advancing the construction of a strong nation, with the construction of a financial powerhouse expected to accelerate as a coordinated strategy with the strong development of technology and manufacturing; third, placing the development of productivity tailored to local conditions in a more prominent strategic position; fourth, expanding domestic demand with a stronger emphasis on ensuring and improving people's livelihoods, enhancing consumption rates through comprehensive measures; fifth, deepening the construction of a unified national market.

State Council Meeting: Continuously promoting cost reduction and quality improvement in logistics, increasing investment in logistics and warehousing facilities. The meeting deployed measures to expand green trade, pointing out the need to **accelerate the improvement of the green trade policy system**, enhance the green and low-carbon development capabilities of foreign trade enterprises, and expand the import and export of related products and technologies. The meeting studied further efforts to ensure grain and agricultural production, emphasizing the need to fully utilize the role of policy-based storage to support market entities in increasing grain procurement efforts, effectively safeguarding farmers' income.

He Lifeng held a video call with U.S. Treasury Secretary Janet Yellen and Trade Representative Katherine Tai. According to Xinhua News Agency, on the morning of October 18, Beijing time, He Lifeng, the Chinese lead for Sino-U.S. economic and trade relations and Vice Premier of the State Council, held a video call with U.S. lead, Treasury Secretary Janet Yellen, and Trade Representative Katherine Tai. The two sides conducted candid, in-depth, and constructive exchanges on important issues in bilateral economic and trade relations, **agreeing to hold a new round of Sino-U.S. economic and trade consultations as soon as possible**.

-   People's Daily Zhongsheng: Global supply chain security and stability need to be jointly maintained. An opinion piece under the pseudonym Zhongsheng states that as long as mutual respect and equal consultation are upheld, China and the U.S. can fully manage differences and find solutions to problems. However, the premise is that the U.S. must act consistently with its words and honor its commitments, and cannot claim to want to negotiate while continuously introducing new restrictions and threats The Governor of the People's Bank of China Pan Gongsheng, the Director of the Financial Supervision and Administration Bureau Li Yunze, and the Chairman of the China Securities Regulatory Commission Wu Qing will attend the 2025 Financial Street Forum Annual Conference from October 27 to 30 and deliver keynote speeches. According to Zhi Haijie, the Executive Secretary-General of the organizing committee of the Financial Street Forum Annual Conference, a series of important financial policies will be promoted and released during the conference.

The Ministry of Finance and two other departments: Adjust the duty-free shopping policy for travelers from Hainan Island. The adjusted policy is set to take effect on November 1, expanding the range of duty-free goods available on the island; allowing certain domestic products to be sold in duty-free shops on the island, with refunds (exemptions) for value-added tax and consumption tax; raising the age for duty-free shopping for travelers from 16 to 18 years; allowing departing travelers to enjoy the duty-free policy; and permitting island residents to make unlimited purchases within the year.

According to Xinhua News Agency, Zheng Liwen was elected as the Chairman of the Kuomintang. The General Secretary of the Communist Party of China sent congratulations to Zheng Liwen on being elected as the Chairman of the Kuomintang, and Zheng Liwen replied with thanks.

Shanghai Futures Exchange: Adjust the margin ratio and price fluctuation limits for gold and silver futures trading. Starting from the settlement at the close of trading on October 21, 2025, the price fluctuation limits for gold and silver futures contracts will be adjusted to 14%, the margin ratio for maintaining positions will be adjusted to 15%, and the margin ratio for general positions will be adjusted to 16%.

-   During Friday's trading session, Shanghai Gold main contract broke through the 1000 yuan threshold, rising nearly 4% during the day, continuing to set a new historical high, and closing up over 3% during the day at the close.

Starting November 1, the U.S. will impose a 25% tariff on medium and heavy trucks and a 10% tariff on buses. According to CCTV News, U.S. President Trump signed an executive order on October 17, local time, imposing a new 25% tariff on imported medium and heavy trucks and parts starting November 1. Trump stated that a 10% tariff will also be imposed on imported buses

-   Before the U.S. Supreme Court's hearing on reciprocal tariffs in November, the Trump administration "adjusts" its strategy, offering various "exemptions". At the same time, the Trump administration is expanding the use of tariffs under Section 232 of the Trade Expansion Act of 1962 to cover heavy trucks, pharmaceuticals, and furniture. This move aims to hedge against the legal risks that may arise if the Supreme Court overturns its "reciprocal tariffs." If the Supreme Court rules against the government, the White House may be forced to refund a large amount of collected tariffs.

Earnings reports ease bad debt panic, U.S. regional bank stocks rebound, executives reassure that "credit quality is robust". U.S. regional banks faced the largest sell-off of bank stocks in six months on Thursday due to loan fraud incidents, but on Friday, **many banks' earnings reports showed loan provisions below analysts' expectations**, with executives attempting to reassure frightened investors and alleviate market panic. Regional bank stocks rebounded on Friday, with Truist Financial rising nearly 4%, Ally Financial up over 3%, and Fifth Third up over 1%.

-   Truist Financial, Fifth Third, and Ally Financial all emphasized robust credit quality and maintained high vigilance against specific risks. Truist Financial's CEO stated that overall credit quality remains strong, and what is currently occurring are some sporadic and unrelated events. Fifth Third's Chief Credit Officer mentioned that when reviewing the loan portfolio, they focused on the now-defunct client Tricolor and expressed strong confidence in the credit quality of other clients in that category.
-   U.S. regional banks are in crisis again, Goldman Sachs calls it "too crazy," and these are the three questions most concerning clients. Investors are focusing on how these loans passed the approval process, why three unrelated suspected fraud cases emerged within a month and a half, and whether small banks have relaxed underwriting standards to stimulate loan growth. The market is closely watching the upcoming earnings season to determine whether credit issues are isolated incidents or part of a broader systemic risk, with Goldman Sachs indicating that the market remains highly vigilant regarding regional banks' NDFI (non-depository financial institution) loan exposure until answers are obtained.
-   Fraud clouds loom, U.S. regional bank preferred stocks become the "eye of the storm". Preferred stocks issued by small U.S. banks have suffered severe blows, with retail market preferred stocks averaging a decline of about 0.7% on Thursday, with a par value of $25. The current market reaction indicates that investors remain highly cautious about the regional banking sector, and any negative news could trigger a chain reaction similar to the Silicon Valley Bank crisis
-   "Bond King" Gross: Gold has become a momentum/Meme asset, regional bank "cockroaches" will continue to affect stocks and bonds. He suggests that those wanting to buy gold should wait, stating that due to oversupply and fiscal deficit issues, the yield on 10-year U.S. Treasury bonds will not be below 4%, and should be close to 4.5%.

In three meetings with Zelensky in eight months, Trump says he hopes to end the war without considering supplying Ukraine with "Tomahawk" missiles, excluding a trilateral meeting between the U.S., Russia, and Ukraine. Trump acknowledged that providing "Tomahawks" to Ukraine would lead to an "escalation" of the situation. According to Trump's plan, the meeting in Hungary would be a "bilateral meeting" with Putin, rather than a trilateral meeting with U.S., Russia, and Ukraine leaders, during which he would maintain communication with Zelensky. Zelensky expressed willingness to negotiate but requires strong security guarantees, with NATO membership still being the ideal choice.

-   According to Xinhua News, Zelensky suggests exchanging Ukrainian drones for U.S.-made "Tomahawk" missiles, Trump says the U.S. also needs "Tomahawks".
-   Russia confirms Putin and Trump may hold a meeting within two weeks.
-   Zelensky: Willing to participate in the meeting between Trump and Putin in Hungary. According to CCTV News, Zelensky also stated on Sunday that Ukraine is willing to engage in talks but will not make concessions to Russia. To achieve a ceasefire and initiate negotiations, both sides of the conflict should remain at the current contact line.

Japan's Liberal Democratic Party and Japan Innovation Party have basically reached a consensus on joint governance. According to Xinhua News, multiple Japanese media outlets reported that the ruling Liberal Democratic Party and one of the main opposition parties, the Japan Innovation Party, are expected to sign a relevant agreement on the 20th. The Liberal Democratic Party has agreed to accept conditions proposed by the Innovation Party, such as reducing the number of seats in the National Diet by 10%. The Innovation Party will form a governing alliance with the Liberal Democratic Party in the form of "external cooperation," meaning that Innovation Party members will not join the new cabinet. According to Japanese media, the alliance between the two parties means that Sanae Takaichi is almost certain to win the prime ministerial nomination election scheduled for the 21st.

-   There are three possible outcomes for the Japanese prime ministerial nomination election: First, the Liberal Democratic Party and the Innovation Party form a governing coalition, and Sanae Takaichi is elected as Japan's prime minister. In this case, neither party has a majority in both houses of the Diet, and Takaichi will face the challenge of "minority governance," making policy implementation potentially difficult; second, the Liberal Democratic Party governs alone, and Sanae Takaichi is elected as Japan's prime minister; Third, the possibility of the opposition parties successfully forming an alliance and producing a prime minister is relatively low.
-   Twists and Turns! Kishida Sanae is close to becoming "Japan's first female prime minister," but the future of the "Sanae Deal" is uncertain. The Liberal Democratic Party of Japan and the Japan Innovation Party have basically agreed to form a coalition government, paving the way for Kishida Sanae to become the country's first female prime minister. However, the economic policy prospects of the new government are full of uncertainty, and this cross-party alliance may cause Kishida Sanae's economic stimulus plan to get stuck in an increasingly divided parliament.

### **Domestic Macro**

In the first three quarters of this year, fiscal revenue increased by 0.5% year-on-year, fiscal expenditure increased by 3.1%, and transaction stamp duty revenue increased by 103.4%. In the first three quarters, national tax revenue reached 13.2664 trillion yuan, a year-on-year increase of 0.7%; non-tax revenue was 3.1212 trillion yuan, a year-on-year decrease of 0.4%. Stamp duty was 314.2 billion yuan, a year-on-year increase of 34.5%. Among them, the stamp duty on securities transactions was 144.8 billion yuan, a year-on-year increase of 103.4%.

State Administration for Market Regulation: Establish and promote the implementation of a reporting system for new energy vehicle fire accident enterprises.

Hong Kong Financial Secretary: Over 200 companies are waiting to be listed in Hong Kong. The Hong Kong IPO market remains hot, with fundraising in the third quarter reaching a four-year high. Chen Maobo stated that over 200 companies are waiting to go public. For mainland companies looking to go global, using Hong Kong as a platform to raise funds and attract talent to assist in their overseas expansion is a very good business choice.

China's energy sector welcomes multiple new breakthroughs. According to CCTV, on October 16th last Thursday, China's energy sector welcomed a milestone "breakthrough day": the world's first commercial modular small reactor "Linglong No. 1" successfully completed its cold test; China's first national-level deep-water oil and gas emergency rescue base was officially put into operation; and the first million-kilowatt peak-shaving thermal power project in the northwest region was fully put into production. The concentration of three "first" level achievements demonstrates China's hardcore innovation strength in the energy sector.

The scale of generative artificial intelligence users in China exceeds 500 million. The China Internet Network Information Center's "Generative Artificial Intelligence Application Development Report (2025)" shows that by June 2025, the scale of generative artificial intelligence users in China will reach 515 million, an increase of 266 million from December 2024, with the user scale doubling in six months; the penetration rate is 36.5%

### **Domestic Companies**

"Doubao" makes a comeback, daily average of 30 trillion Tokens. The "Doubao" large model under ByteDance has achieved a daily Token call volume of 30 trillion, realizing a 253-fold increase, with 157 million monthly active users surpassing DeepSeek, ranking first in China's AI applications. The key to its success lies in deep integration with Douyin, rich multimodal features, and a low-threshold user experience, proving that in the AI market, product capability and ecosystem integration are more important than pure technical advantages.

Cambricon's Q3 revenue surged 13 times year-on-year, net profit of 570 million yuan, marking three consecutive quarters of profitability. Q3 revenue reached 1.727 billion yuan, a year-on-year increase of 1332%; revenue for the first three quarters was 4.607 billion yuan, a year-on-year increase of 2386%; net profit was 567 million yuan, marking a year-on-year turnaround for the third consecutive quarter, but down 17% from the previous quarter; net profit for the first three quarters was 1.605 billion yuan, achieving a historic turnaround.

Zijin Mining's Q3 net profit attributable to shareholders soared 57.14%, driven by production release and gold price dividends. Zijin Mining's net profit attributable to shareholders in the third quarter was 14.57 billion yuan, a year-on-year increase of 57.14% and a quarter-on-quarter increase of 11.02%; Q3 revenue was 86.489 billion yuan, a year-on-year increase of 8.14%. The significant performance increase is attributed to production release combined with rising gold prices, with the company's gold production in the first three quarters reaching 65 tons, a year-on-year increase of 20%.

Xiaomi's latest large model achievement, Luo Fuli appears. The Xiaomi AI team, in collaboration with Peking University, released a paper on MoE and reinforcement learning. The paper proposes the R3 method, which addresses the stability and efficiency issues of the MoE architecture in reinforcement learning through a routing replay mechanism, effectively avoiding training crashes. The experiments were validated based on the Qwen3-30B model, showing that R3 significantly improves performance and training stability. Former DeepSeek researcher Luo Fuli appeared as the corresponding author; Luo Fuli participated in the development of DeepSeek-V2, with over 11,000 academic citations, but the affiliation in this paper has not been clearly indicated.

Is the BaaS model exaggerating financial data? How to understand Nio's lawsuit. JP Morgan believes that BaaS is an innovation in business and financial models, rather than a tool aimed at manipulating financial statements. Given the precedents of independent investigations and regulatory reviews, the lawsuit revives old cases, and the substantial legal risks posed to Nio may be limited.

### **Overseas Macro**

Key Verification of the Dollar's Big Logic: The Next Major Drop in U.S. Stocks. Citigroup believes that the next sell-off of more than 5% in the S&P 500 index will be a litmus test for the dollar's safe-haven properties. Before the "peak of the Federal Reserve's dovish stance and the peak of cyclical weakness in the U.S.," the dollar is unlikely to reverse (continue to weaken). This turning point is expected to occur within the next three months, at which point the dollar is expected to rebound in 2026.

Two Leading Indicators Signal Alarm, Bitcoin is "Nervous". The Bitcoin market is facing dual pressures. Data from the options market shows a surge in demand for put options, with traders willing to pay higher premiums to hedge against downside risks. At the same time, Bitcoin miners deposited approximately 51,000 Bitcoins into exchanges over the past week, reaching a multi-month high, possibly preparing for potential sales. "When miners start to sell, the market usually does not have good outcomes."

### **Overseas Companies**

What is "Cunning" Microsoft Thinking While Watching OpenAI Support Oracle? OpenAI's almost arrogant ambitions have led Microsoft to believe that rather than taking on astronomical financial risks, it is better to let competitors take the gamble. Moreover, despite loosening exclusive terms, Microsoft remains the only cloud service provider offering supercomputers for model training to OpenAI, which is the most critical part of AI development. At the same time, Microsoft continues to take a 20% cut from OpenAI's soaring revenues.

Danger Signals for AI: ChatGPT's Growth in Paid Users in Europe May Have Stalled! Deutsche Bank's research report shows that consumer spending on ChatGPT in the European market has stagnated since May this year, and the growth of paid users may have peaked. Although weekly active users reach 800 million, there are only 20 million paid users, which is severely inconsistent with a valuation of $500 billion. Deutsche Bank believes that if paid growth continues to stagnate, the valuation system of the AI industry may face correction pressure.

The Largest Private Equity Financing is Coming: Meta to Sign a $30 Billion Financing Deal to Build Data Centers. Meta will build its largest global data center project in Louisiana and complete nearly $30 billion in financing through a special purpose vehicle (SPV). Meta will retain only 20% equity, with institutions like Blue Owl and Pimco leading the funding, while Morgan Stanley arranges the financing structure and exclusively underwrites the bonds. This deal allows Meta to avoid including massive debt on its balance sheet and provides a new financing template for the AI era, expanding data centers while avoiding impacts on the company's credit rating Understanding One of America's Hottest Tech Investors—Joshua Kushner and His Thrive Capital, Helping Altman Regain Control of OpenAI. Kushner is the largest external shareholder of OpenAI and the founder of Thrive Capital. Thrive's first fund had only $5 million in 2010. By 2023, its eighth fund has reached $3.3 billion, including significant bets on companies like Stripe and OpenAI, demonstrating its remarkable foresight.

Oracle Soothes Investors, Predicts Gross Margin of 30%-40%, Don't Believe "AI Only Makes Noise and Doesn't Make Money." Oracle CEO Clay Magouyrk explained the phenomenon of the "ramp-up period," citing an example of a six-year, $60 billion AI infrastructure contract, where Oracle might pay $570 million before the contract starts, leading to a negative gross margin. However, once the data center is operational, the company could generate $10 billion in revenue annually, with costs of $6.4 billion, resulting in an overall gross margin of 35%.

Musk's "Financial Tricks": How Cash-Strapped xAI Finances the "World's Strongest Computing Cluster + Large Natural Gas Power Plant". Musk's long-time supporter Valor Equity Partners is raising $20 billion for a special purpose vehicle (SPV) to purchase NVIDIA chips and lease them to xAI. This arrangement means that xAI does not initially own the hundreds of thousands of NVIDIA chips planned for deployment at the second super-large data center, Colossus 2, in Memphis, nor will it control the natural gas power facilities supplying that center. The entire financial structure relies on xAI generating enough cash flow to cover lease payments while repaying the raised debt.

Japan's Three Major Banks Plan to Jointly Issue Stablecoins, Initially Pegged to the Yen with Future Plans for a Dollar Version. Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, and Mizuho Financial Group will jointly launch a digital currency pegged to the value of the yen. These three banks will build infrastructure for corporate clients, allowing stablecoins to be transferred between clients according to a unified standard.

Trump Claims "Semaglutide Drug Prices Will Plummet," Shares of "Weight Loss Giants" Eli Lilly and Novo Nordisk Plunge. Trump stated that the price of the diabetes drug Ozempic will drop from $1,000 per month to $150, but CMS head Oz clarified that negotiations have not reached an agreement. As a result, shares of Novo Nordisk and Eli Lilly fell more than 4-5% in after-hours trading The Trump administration is exchanging tariff exemptions for price reductions, and GLP-1 weight loss drugs have been included in the negotiation list of the Inflation Reduction Act, facing ongoing price reduction pressure.

NVIDIA announces the launch of Blackwell chips manufactured in the U.S.. NVIDIA CEO Jensen Huang visited TSMC's semiconductor manufacturing plant in Phoenix on Saturday to celebrate the official launch of the first Blackwell chip produced in the U.S., marking the achievement of large-scale production of Blackwell products.

LVMH is reportedly close to selling its beauty business to L'Oréal at a valuation of about $4 billion, with an agreement possibly announced as early as this week.

## Today's News Preview

**China's October one-year and five-year Loan Market Quote Rates (LRP)**.

**China's September industrial added value above designated size, September total retail sales of consumer goods, and January to September national real estate development investment. China's third-quarter GDP**.

**The State Council Information Office will hold a press conference on the operation of the national economy**.

**The Fourth Plenary Session of the 20th Central Committee of the Communist Party of China will be held in Beijing from October 20 to 23**.

**CATL** and iFlytek financial reports.

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