Breakfast | Market focus: China and the United States will hold economic and trade consultations from October 24 to 27!

Market Overview On the eve of the key U.S. CPI data release, trade tensions are expected to ease, and market sentiment has significantly improved, with all three major U.S. stock indices rising. Tesla opened lower but rebounded, increasing by 2.28%, leading the gains among the seven tech giants. Honeywell raised its earnings guidance, rising nearly 7%. Quantum computing concept stocks surged. Energy stocks performed well due to news of sanctions against Russia. The yield on 10-year U.S. Treasury bonds rose by 5.3 basis points, returning to 4%. The dollar remained flat compared to the previous day's close. Bitcoin briefly reversed its downward trend from yesterday, returning to $110,000 during the day, while Ethereum rebounded by 1.2%, and Solana surged by 6%. Gold continued its rebound trend from yesterday's close, with spot gold stabilizing above $4,100, and COMEX gold futures rose by 1.62%. Oil prices rose for the third consecutive day, intra-day gains exceeded 5%, with U.S. oil briefly returning to $62. During the Asian session, A-shares rose in the afternoon, with all three major indices closing higher. Coal stocks saw a wave of 涨停 (limit-up), and the Hang Seng Index ended its five-day losing streak, while Pop Mart fell over 9% against the trend, and "double 焦" (coke and coking coal) surged. Key News China and the U.S. will hold economic and trade consultations in Malaysia from October 24 to 27. The communiqué of the Fourth Plenary Session of the 20th Central Committee of the Communist Party of China. The 20th Central Committee's Fourth Plenary Session reviewed and approved the "14th Five-Year" planning proposal. The Trump administration is looking to invest in a quantum computing company? U.S. Commerce Department officials: There are no such consultations. The U.S. has established a critical minerals fund with a target size of $5 billion. Trump has once again shown goodwill towards the cryptocurrency sector, issuing a pardon to Binance founder Zhao Changpeng. The White House stated that a Trump-Putin meeting is not entirely impossible, while Putin remarked that new U.S. sanctions would not have a significant impact on the Russian economy. The EU has passed a new sanctions plan against Russia, banning the import of liquefied natural gas starting in 2027 and for the first time including cryptocurrency platforms in the sanctions. Trump's new sanctions reshape the oil market: India's exit could lead to a phased withdrawal of 1.5 million barrels per day from the market, with refineries turning to the Middle East and Latin America for bidding. Modi may miss the ASEAN summit, missing the chance to meet Trump. With cost reduction and AI demand surging, Intel turned a profit in Q3, with revenue recovering and optimistic guidance, leading to a post-market surge. Anthropic has reached a $10 billion cooperation agreement with Google Cloud, set to receive a million TPU chips by 2026. The "super cycle" of storage chips accelerates: Samsung and SK Hynix both raised prices by 30%, with some customers locking in long-term contracts for 2-3 years. Market Closing Report U.S. and European stock markets: The S&P 500 rose by 0.58%, closing at 6,738.44 points. The Dow Jones increased by 0.31%, closing at 46,734.61 points. The Nasdaq rose by 0.89%, closing at 22,941.798 points. The European STOXX 600 index closed up 0.37%, at 574.43 points, setting a new closing historical high A-shares: The Shanghai Composite Index rose 0.22%, closing at 3922.41 points, the Shenzhen Component Index rose 0.22%, closing at 13025.45 points, and the ChiNext Index rose 0.09%, closing at 3062.16 points. Bond Market: The yield on the 10-year U.S. Treasury rose by 4.78 basis points to 3.9970%. The yield on the 2-year U.S. Treasury rose by 4.20 basis points, reaching a daily high of 3.4864%. Commodities: WTI December crude oil futures rose by 5.62%, closing at $61.79 per barrel. Brent December crude oil futures rose by 5.43%, closing at $65.99 per barrel. COMEX gold futures rose by 1.62%, closing at $4131.20 per ounce. COMEX silver futures rose by 1.81%, closing at $48.545 per ounce. News Details Global Highlights China and the U.S. will hold economic and trade consultations in Malaysia from October 24 to 27. As agreed by both sides, He Lifeng, a member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, will lead a delegation to Malaysia for economic and trade consultations with the U.S. side from October 24 to 27. The two sides will consult on important issues in China-U.S. economic and trade relations based on the important consensus reached in the various calls between the leaders of the two countries this year. Communiqué of the Fourth Plenary Session of the 20th Central Committee of the Communist Party of China. The plenary session proposed the main goals for economic and social development during the 14th Five-Year Plan period: significant achievements in high-quality development, a substantial increase in the level of technological self-reliance, new breakthroughs in further deepening reforms, a noticeable improvement in social civilization, continuous enhancement of people's quality of life, new significant progress in building a beautiful China, and a more solid national security barrier. On this basis, we will strive for another five years to achieve a significant leap in our economic strength, technological strength, national defense strength, comprehensive national strength, and international influence by 2035, with per capita GDP reaching the level of moderately developed countries, a happier and better life for the people, and basically realizing socialist modernization. The 20th CPC Central Committee's Fourth Plenary Session reviewed and approved the "14th Five-Year Plan" proposal. The plenary session heard and discussed the work report made by Xi Jinping on behalf of the Central Political Bureau, and reviewed and approved the "Suggestions of the Central Committee of the Communist Party of China on Formulating the 14th Five-Year Plan for National Economic and Social Development." Xi Jinping explained the "Suggestions (Draft for Discussion)" to the plenary session "During the 14th Five-Year Plan period, China will focus on these matters". China will focus on building a modern industrial system, consolidating and strengthening the foundation of the real economy; accelerating high-level technological self-reliance and self-improvement, leading the development of new quality productivity; building a strong domestic market, accelerating the construction of a new development pattern; accelerating the establishment of a high-level socialist market economic system, enhancing the momentum for high-quality development, etc. "Anchoring the main goals of the 14th Five-Year Plan, this is how we will do it in the next five years!" Seizing the historical opportunity of a new round of technological revolution and industrial transformation, coordinating the construction of a strong education nation, a strong technology nation, and a strong talent nation, enhancing the overall effectiveness of the national innovation system, comprehensively enhancing independent innovation capabilities, seizing the commanding heights of technological development, and continuously generating new quality productivity. We must strengthen original innovation and key core technology breakthroughs, promote the deep integration of technological innovation and industrial innovation, advance the development of education, technology, and talent in a coordinated manner, and promote the construction of a digital China in depth. "The communiqué of the 20th National Congress of the Communist Party, these statements are worth noting". We must insist on focusing economic development on the real economy, adhere to the directions of intelligence, greening, and integration, and accelerate the construction of a manufacturing power, a quality power, an aerospace power, a transportation power, and a cyber power. "Is the Trump administration looking to invest in quantum computing companies? U.S. Commerce Department official: No such discussions". Media reports indicate that a spokesperson for the U.S. Department of Commerce revealed that relevant companies have contacted the White House, and the government has also received many intentions to invest. What is being considered may be in the form of warrants or loans, and may not necessarily involve those quantum computing companies mentioned in earlier reports on Thursday. "The Trump administration is considering investing in multiple quantum computing companies". The Trump administration is planning to deeply intervene in key technology fields, considering exchanging federal funds for equity in several quantum computing companies such as IonQ. This move continues its "government as shareholder" industrial policy, aiming to allow taxpayers to share in the dividends of high-tech development, having previously invested in chip giant Intel in a similar manner. The U.S. establishes a critical minerals fund, with a target size of $5 billion! The U.S. government has teamed up with private equity firm Orion Resource Partners and the Abu Dhabi sovereign fund ADQ to establish a critical minerals investment fund. The three parties have committed an initial capital of $1.8 billion, with a final target size set at $5 billion. The fund will prioritize "investments in existing or recently put into production assets," rather than early-stage exploration projects Trump again shows goodwill towards the crypto circle, issues a pardon for Binance founder Zhao Changpeng. Trump issued a pardon for Zhao Changpeng based on the powers granted by the U.S. Constitution, marking the White House's recent act of forgiveness towards entrepreneurs in the crypto industry. Binance Coin (BNB) surged following the announcement of Zhao's pardon. Media reports previously indicated that one of the Trump family's crypto projects, World Liberty Financial Inc., had discussed potential cooperation with Binance. The White House says a Trump-Putin meeting is not entirely impossible, Putin: New U.S. sanctions will not have a significant impact on the Russian economy. Putin stated that the new U.S. sanctions would not significantly impact the Russian economy, and buyers would need time to find alternatives for Russian oil, with reduced Russian oil supply leading to rising oil prices. The White House indicated that a meeting between Trump and Putin is not entirely impossible. Zelensky stated that any form of territorial exchange with Russia is "unacceptable." On Thursday, U.S. stocks saw both Brent and WTI crude oil rise over 5%. The EU passes a new sanctions plan against Russia, banning the import of liquefied natural gas starting in 2027, and for the first time including crypto platforms in the sanctions. This round of sanctions against Russia mainly involves the energy and financial sectors. The EU will ban Russian liquefied natural gas from entering the European market starting in 2027 and will lower the price cap on Russian crude oil to $47.6 per barrel; Russian oil companies and Gazprom Neft will face a comprehensive trading ban; the EU will expand trading bans on financial institutions from Russia and other countries and will include cryptocurrency platforms in the sanctions for the first time. Trump's new sanctions reshape the oil market: India's exit may lead to a phased withdrawal of 1.5 million barrels per day from the market, refineries turning to the Middle East and Latin America for bidding. U.S. sanctions against two major Russian oil giants have made it difficult for Indian refineries to continue purchasing 1.5 million barrels of Russian oil daily, triggering a more than 5% jump in oil prices. The market is concerned that this batch of crude oil will be phased out, forcing global refineries to turn to the Middle East and Latin America for alternatives, intensifying competition and supporting oil prices. Modi may miss the ASEAN summit, missing the chance to meet Trump. Indian Prime Minister Modi will miss the in-person ASEAN summit due to domestic Diwali celebrations and will participate online instead. This decision causes him to miss a key opportunity for a direct meeting with U.S. President Trump. Currently, U.S.-India trade relations are at a sensitive moment, with reports this week suggesting the two countries are close to reaching an agreement, with tax rates potentially dropping to 15%, but the lack of a meeting may add uncertainty to the trade situation Cost reduction and AI demand surge, Intel turns a profit in Q3, revenue recovers growth, outlook optimistic, stock rises after hours. In the third quarter, Intel's revenue saw its first year-on-year positive growth in a year and a half, and it achieved net profit for the first time since the end of 2023, with gross margin reaching a year and a half high. The CFO stated that the company's chips are currently in short supply, a situation expected to continue into next year, partly due to the upgrade CPU demand from data center operators. Intel's fourth-quarter revenue guidance, excluding Altera's business, is slightly below analyst expectations, but it actually performs better because some analysts' forecasts include Altera revenue. Intel announced that it has received a $5.7 billion investment from the U.S. government in the third quarter; NVIDIA's $5 billion investment is expected to be completed within the year. Intel's stock price rose by as much as 9% after hours. Anthropic and Google Cloud reach a $10 billion cooperation agreement, will receive one million TPU chips by 2026. Anthropic and Google officially announced a cloud service cooperation agreement, a deal worth hundreds of billions of dollars that will provide up to one million custom Google TPU chips, expected to bring over one gigawatt of AI computing power by 2026. Following the announcement, Google's parent company Alphabet saw a quick rise of nearly 1% in after-hours trading. Storage chip "super cycle" accelerates: Samsung and SK Hynix both raise prices by 30%, some customers lock in 2-3 year long-term contracts. Samsung and SK Hynix have raised DRAM and NAND flash prices by up to 30% in Q4, with U.S. electronics giants and data center operators negotiating medium to long-term supply contracts lasting 2 to 3 years with Korean suppliers. The production of HBM is squeezing general DRAM capacity, which is the main reason for the price increase, and analysts expect this round of shortages may last three to four years. Domestic Macro Chinese companies aggressively sell dollars, September settlement surplus reaches $51 billion, the largest since December 2020. In September, banks settled $264.7 billion and sold $213.6 billion, resulting in a settlement surplus of $51 billion. The cumulative surplus for the first three quarters reached $63.2 billion, higher than the same period last year. This reflects a significant increase in the willingness of market participants to settle foreign exchange against the backdrop of enhanced expectations for the appreciation of the renminbi. Analysts believe that exporters accelerating settlement will provide further support for the renminbi. Domestic Companies Entering the consumer AI market, Alibaba's self-developed AI glasses open for pre-sale, with a minimum price of 3,699 yuan after subsidies, new chatbot challenges ChatGPT. Aiming at Meta and OpenAI, Alibaba's Quark AI glasses are about to open for pre-sale, with a starting price of 4,699 yuan, and an actual price of 3,699 yuan after subsidies. The hardware configuration of Quark AI glasses is comparable to Meta's smart glasses Deep integration of Alibaba's ecological services. At the same time, Alibaba launched a new AI Chat Assistant chatbot model in its Quark app, challenging ChatGPT. Dan Bin's latest holdings: The largest position remains NVIDIA, first-time purchases of Alibaba and Broadcom, significantly reduced holdings in Amazon and Netflix. The most notable operation in the third quarter was the purchase of Alibaba, with 221,000 new shares acquired, accounting for 3.06% of the portfolio, making it into the top ten largest positions. Strengthening the AI industry chain layout, two important semiconductor companies were newly added: Broadcom and Astera Labs. Holdings in Amazon and Netflix were reduced by 50% and 71.5%, respectively. Overseas Macro As gold prices plummet, Goldman Sachs remains "bullish": maintains a target price of $4,900 by the end of next year, with even "upside risks". Goldman Sachs believes that the current sell-off is mainly due to the liquidation of speculative positions and the spillover effect from the silver market, rather than a deterioration in fundamentals. The real "smart money," including central banks, ultra-high-net-worth individuals, and long-term asset allocation institutions, continues to flow in structurally. Due to the awakening of large institutional investors' allocation demands, the target price of $4,900 per ounce even has "upside risks." U.S. September existing home sales hit a seven-month high, with a slowdown in price increases and a year-on-year surge in inventory. The total number of existing home sales in the U.S. in September was an annualized 4.06 million units, the highest level in seven months, in line with the media survey expectation of 4.06 million units, up from a previous value of 4 million units. The median price of existing homes in September increased by 2.1% year-on-year, reaching $415,200. The inventory of unsold existing homes surged by 14% year-on-year in September, reaching 1.55 million units, one of the highest levels since before the pandemic. Overseas Companies Tesla's conference call disappoints the market, Musk lowers robot and Robotaxi targets, stating "Tesla is at a critical moment". Musk's dream of an AI empire remains grand, but his pace is becoming more cautious. Although he portrays Tesla's future as dominated by AI and a "robot army," he has also postponed the mass production schedule for the Optimus robot, which was originally planned for this year. The expansion plan for Robotaxi services has also narrowed from "covering 50% of the U.S. population" to 8 to 10 cities. NASA urgently kicks SpaceX, who can "take over" the U.S. moon landing plan? NASA announced the reopening of bidding due to serious delays in SpaceX's lunar lander development, which may affect the U.S. manned moon landing plan in 2027. Although Blue Origin claims to be ready, its "Blue Moon" lander is scheduled to be operational in the early 2030s, making it difficult to replace SpaceX's "Starship" plan in the short term Other aerospace companies in the United States lack the capability to independently undertake this urgent task. Some analysts believe that the current "moon landing program delay crisis" in the U.S. is essentially a result of the overall decline in the country's aerospace development capabilities and the continuous reduction of NASA's investment in related fields. Under the "Iron Chain," the "Remaining Performance Obligations (RPO)" metric is crucial for tech giants. Morgan Stanley analyzes that merely focusing on the revenue growth and capital expenditures of tech giants is no longer sufficient. A critical forward-looking indicator—Remaining Performance Obligations (RPO)—is becoming key to understanding these giants' future real income, growth quality, and potential risks. An increasing RPO balance typically indicates strong new orders and solid customer relationships. Conversely, a decline may signal a slowdown in sales momentum or shorter contract durations. E-commerce AI battle escalates: Amazon launches "Help Me Decide" AI feature to compete with Walmart-OpenAI alliance. Amazon is launching a new artificial intelligence tool called "Help Me Decide," which utilizes large language models to generate clear purchase recommendations by analyzing users' shopping histories, product descriptions, and consumer reviews. This tool will initially be available to "millions" of randomly selected U.S. consumers and is planned for broader rollout in the coming months. The "Investment Art" of the well-known "Tiger Cub Fund" D1 Capital: Investment returns mainly stem from valuation expansion rather than pure profit growth, and the core of shorting lies in identifying four types of potential targets. D1 Capital founder Dan Sundheim stated that investment returns primarily come from valuation multiple expansion rather than pure profit growth, and risk management must be done in advance. After experiencing a retail short squeeze event, D1 adjusted its strategy to adopt more small-scale short positions to diversify risk. He believes the current AI boom is only equivalent to "the internet in 1997," and AI stocks have not yet become bubble-like; the real opportunities lie in foundational industries such as power infrastructure, as they will benefit from long-term growth in AI-driven energy demand. Today's News Preview The 18th meeting of the 14th National People's Congress Standing Committee will be held in Beijing from October 24 to 28. U.S. and Japan September CPI. U.S., Eurozone, UK, and Japan October manufacturing, services, and composite PMI. U.S. October University of Michigan consumer confidence and inflation expectations. Japan's new Prime Minister Sanae Takaichi delivers a policy speech at the House of Representatives plenary session. The Federal Reserve discusses proposals to increase the transparency and public accountability of the Board's stress testing framework. China's low-altitude economy innovation application and standardization promotion conference XPeng Automotive Technology Day