Breakfast | China and the United States will successively release key data, and the U.S. government shutdown may come to an end today

Market Overview On Friday, Amazon surged nearly 10%, boosting tech stocks, and the three major U.S. stock indices closed higher. After earnings, Apple opened high but closed slightly down. Meta fell 2.72%, marking a two-day decline, with a cumulative drop of nearly 12% in October. In October, U.S. stocks rose monthly after digesting geopolitical risks, Powell's hawkish remarks, and end-of-month selling pressure, marking at least six consecutive months of gains. The yield on the 10-year U.S. Treasury bond fell slightly by 0.4 basis points, with a weekly cumulative increase of 9.23 basis points. The dollar rose for three consecutive days, increasing by 0.27% during the day. The dollar rose 118 points against the offshore yuan, returning to 7.12. Mainstream cryptocurrencies rebounded across the board on Friday, with Bitcoin rising 1.80%, testing $111,000, and Ethereum briefly rising over 3.9%. Spot gold fluctuated downwards by 0.55%, reported at $4,002, with a brief drop below $4,000 during the day on Friday. Affected by the situation in Venezuela, oil prices fluctuated, peaking and then retreating during the session. Key News Xi Jinping delivered a speech at the second phase of the 32nd APEC Leaders' Informal Meeting. Xi Jinping held talks with South Korean President Lee Jae-myung. The spokesperson for the Ministry of Commerce answered reporters' questions regarding Anshi Semiconductor. The Ministry of Commerce urged the Japanese side to quickly remove relevant Chinese entities from the export control end-user list. The U.S. government shutdown duration is approaching historical records, with Trump misjudging the Democrats' resolve, as the "critical moment" arrives! Bessenet: If inflation decreases, the Federal Reserve should cut interest rates. After the October decision, the first wave of Federal Reserve officials spoke out: three opposed the October rate cut, while Waller supported a December rate cut. There is a rare division within the Federal Reserve not seen in six years, with "bond king" Gross taking a short position on U.S. Treasuries! Microsoft's earnings report leaked OpenAI's financial data: a quarterly loss of $11.5 billion. Microsoft and OpenAI's CEO had a rare joint dialogue: OpenAI restructuring, AI bubble skepticism, and computing power demand. Berkshire's Q3 operating profit surged 34%, with cash reserves soaring to $381.7 billion, a record high, selling another $6.1 billion in stocks in the third quarter, marking five consecutive quarters without buybacks, and a total of $184 billion in stock sales over three years. October new energy vehicle companies report: Leapmotor delivered over 70,000 units for the first time, XPeng and Nio set records, and Xiaomi stabilized at 40,000 deliveries. OPEC+ agreed to increase oil production by 137,000 barrels per day in December, pausing oil production increases in the first quarter of next year. Value investing moguls Yang Dong and Chen Guangming have successively "closed their positions." Market Closing Report U.S. and European stock markets: The S&P 500 rose 0.26%, closing at 6,840.20 points, with a weekly cumulative increase of 0.71% and a cumulative increase of 2.27% in October, marking the sixth consecutive month of gains. The Dow Jones rose 0.09%, closing at 47,562.87 points, with a cumulative increase of 2.51% in October, also rising for six consecutive months The Nasdaq rose by 0.61%, closing at 23,724.957 points, with a cumulative increase of 4.70% in October, marking seven consecutive months of gains. The European STOXX 600 index fell by 0.51%, closing at 571.89 points, with a cumulative decline of 0.22% for the week and a cumulative increase of 2.46% in October. A-shares: The Shanghai Composite Index fell by 0.81%, closing at 3,954.79 points, the Shenzhen Component Index fell by 1.14%, closing at 13,378.21 points, and the ChiNext Index fell by 2.31%, closing at 3,187.53 points. Bond market: The yield on the 10-year U.S. Treasury bond fell by 0.40 basis points to 4.0930%, with a cumulative increase of 9.23 basis points for the week and a cumulative decline of 5.73 basis points in October. The yield on the 2-year U.S. Treasury bond fell by 1 basis point to 3.5983%, with a cumulative increase of 11.83 basis points for the week and a cumulative decline of 1.01 basis points in October. Commodities: COMEX gold futures rose by 0.06%, closing at $4,018.50 per ounce, with a cumulative increase of 3.76% in October. WTI December crude oil futures rose by 0.68%, closing at $60.98 per barrel, with a cumulative decline of 1.58% in October. Brent December crude oil futures rose by 0.11%, closing at $65.07 per barrel. News Details Global Highlights Xi Jinping's speech at the second phase of the 32nd APEC Leaders' Informal Meeting. Xi Jinping pointed out that China proposes the establishment of a World Artificial Intelligence Cooperation Organization, aiming to actively provide public goods in artificial intelligence for the international community through cooperation in development strategies, governance rules, and technical standards. Xi Jinping meets with South Korean President Lee Jae-myung. Xi Jinping proposed four suggestions for opening a new chapter in China-South Korea relations, accelerating the promotion of the second phase of negotiations for the China-South Korea Free Trade Agreement, deeply exploring cooperation potential in emerging fields such as artificial intelligence, biopharmaceuticals, green industries, and the silver economy, and promoting the quality and upgrading of economic and trade cooperation. The spokesperson of the Ministry of Commerce answers reporters' questions regarding issues related to ASML Semiconductor. The Chinese side has responded to reporters' questions regarding ASML Semiconductor. I want to emphasize that the Dutch government's improper interference in corporate internal affairs has led to the current chaos in the global supply chain. As a responsible major country, China fully considers the safety and stability of domestic and international supply chains and welcomes companies facing practical difficulties to contact the Ministry of Commerce or local commerce authorities in a timely manner We will comprehensively consider the actual situation of enterprises and exempt eligible exports. Ministry of Commerce: Urges Japan to quickly remove relevant Chinese entities from the export control end-user list. On October 30, Minister of Commerce Wang Wentao met with Japan's Minister of Economy, Trade and Industry, Akazawa Ryozo, in Gyeongju, South Korea, where both sides exchanged views on China-Japan economic and trade relations. Wang Wentao stated that currently, unilateralism and protectionism are impacting the international economic and trade order, and both sides should work towards each other, effectively utilizing mechanisms such as export control dialogues to jointly maintain the stability and smoothness of industrial and supply chains. China urges Japan to quickly remove relevant Chinese entities from the export control end-user list. It is hoped that both sides will jointly maintain a multilateral trading system centered on the World Trade Organization and promote regional economic cooperation to inject more stability into the world economy. The duration of the U.S. government shutdown is approaching historical records, Trump misjudges the Democrats' determination, "critical moment" arrives! The U.S. government shutdown will reach 32 days, approaching the historical longest record of 35 days. Meanwhile, as the funding for the Supplemental Nutrition Assistance Program (SNAP), which provides food assistance to 42 million Americans, is set to expire on November 1, a severe livelihood crisis is rapidly brewing. The Senate plans to hold a new round of voting on November 3, but the two parties remain at an impasse on core issues. Besenet: The Federal Reserve should cut interest rates if inflation decreases. U.S. Treasury Secretary Besenet stated that Trump has not yet imposed a 10% tariff on Canada. When discussing the economic recession, he mentioned that we are in a transitional period. If inflation decreases, the Federal Reserve should cut interest rates. Some sectors of the economy are in recession. If the Federal Reserve lowers mortgage rates, it can end the real estate recession. Regarding Canada, he stated that we will eventually reconcile with "family members" and will see how to renegotiate with Canada. After the October resolution, the first wave of Federal Reserve officials speak out: 3 oppose the October rate cut, Waller supports a December rate cut. On Friday, three Federal Reserve officials expressed opposition to a rate cut, indicating that the hawkish stance is facing increasing challenges. This year's voting member Schmidt stated that inflation is still too high, and next year's voting member Logan said it would be difficult to support a rate cut in December unless there is clear evidence that inflation will decrease faster than expected or the labor market will cool down more quickly; next year's voting member Hamak stated that after the October rate cut, rates are just near neutral levels. The market currently estimates the likelihood of another rate cut before the end of the year at 61%, down from 92% the day before Powell's speech. Is a December rate cut in jeopardy? Rare divisions within the Federal Reserve in six years, "bond king" Gross takes a short position on U.S. Treasuries! In last week's Federal Reserve interest rate decision, two of the 12 voting members cast dissenting votes, with Milan advocating for a 50 basis point rate cut, while Jeff Schmid argued for maintaining rates. This rare dual dissent is the first occurrence in the past six years. Against the backdrop of increasing uncertainty in the Federal Reserve's policy path, Gross chose to sell U.S. Treasuries, stating that the continuously expanding deficit and weakening dollar have led him to hold a pessimistic view on U.S. Treasuries Whether the Federal Reserve will cut interest rates in December may depend on "when the U.S. government shutdown ends". The longer the shutdown lasts and the more data is missing, the more cautious the Federal Reserve will be in its actions. Morgan Stanley believes that if the government shutdown continues past Thanksgiving (late November), it is very likely that there will be a pause in interest rate cuts in December. Citigroup, on the other hand, holds a more optimistic view, expecting the government to reopen within the next two weeks, allowing the Federal Reserve to obtain multiple employment reports before the December meeting, thereby providing a basis for continuing to cut rates by 25 basis points. Microsoft's financial report leaked OpenAI's financial data: a quarterly loss of $11.5 billion. Microsoft's financial report shows that its equity method investment in OpenAI resulted in a net profit decrease of $3.1 billion for the quarter. Based on Microsoft's approximately 27% stake in OpenAI, OpenAI's net loss for the quarter is approximately $11.5 billion; if calculated based on pre-tax losses and an actual holding ratio of 32.5%, the loss could exceed $12 billion. This figure is nearly three times its revenue of $4.3 billion in the first half of this year. Microsoft and OpenAI CEO rare joint dialogue: OpenAI restructuring, AI bubble doubts, computing power demand. Regarding OpenAI's restructuring plan, Altman clarified that only the "stateless API" will be exclusively retained on the Azure platform until 2030. In response to the $1.4 trillion computing power expenditure doubts, Altman emphasized that revenue will far exceed expectations, with revenue potentially increasing nearly tenfold for every tenfold increase in computing power. Regarding computing power demand, Nadella believes that the biggest problem now is not excess computing power, but rather power issues, otherwise there could be a pile of chips stuck in inventory but unable to be used, but excess computing power will eventually appear. The U.S. data center frenzy: 45GW, $2.5 trillion investment, who is building, who is paying? According to Barclays Research, the total capacity of data center projects being planned or constructed in the U.S. exceeds 45 gigawatts, with total investments expected to exceed $2.5 trillion. Major participants include OpenAI, Amazon, Meta, Microsoft, xAI, and other large-scale cloud providers. Behind the massive investments is a complex financing structure, with private equity firms and specialized infrastructure funds playing a key role in addition to the capital expenditures of the tech giants themselves. Berkshire Hathaway's Q3 operating profit surged 34%, cash reserves soared to $381.7 billion, a record high, sold $6.1 billion in stocks in the third quarter, marking five consecutive quarters without buybacks, totaling $184 billion in stock sales over three years Berkshire's insurance underwriting profit soared over 200% to $2.37 billion in the third quarter, becoming a major growth engine. Cash reserves reached a historic high of $381.7 billion, but this also caused its stock price to significantly underperform the market. The largest sold stocks in the third quarter included Apple, American Express, and Bank of America. This is the last financial report before Buffett steps down as CEO of Berkshire, highlighting a cautious investment attitude. October new energy vehicle companies' report card: Leapmotor delivers over 70,000 for the first time, XPeng and Nio set records, Xiaomi stabilizes at 40,000 deliveries. Leapmotor leads the list with over 70,000 deliveries, while XPeng and Nio both refresh their monthly delivery records, and Xiaomi continues to stabilize at over 40,000 monthly deliveries. Other automakers also performed well, with Avita Technology achieving over 10,000 sales for eight consecutive months, and Voyah delivering 17,218 vehicles in October. OPEC+ agrees to increase oil production by 137,000 barrels per day in December and pause production increases in the first quarter of next year. OPEC+ has agreed to slightly increase oil production again in December and will pause production increases in the first quarter of 2026. The first quarter is typically a period of weak demand, and representatives stated that the decision to pause from January reflects expectations of seasonal slowdown. OPEC+ hopes to hold the next meeting in person rather than online. Signals from value investing giants? Yang Dong and Chen Guangming successively "close their funds". The Ruiyuan Insight Value Series managed by Chen Guangming of Ruiyuan Fund has "closed" since November, and Ningquan Asset, led by well-known fund manager Yang Dong, announced on October 29 that the company decided to suspend accepting new investor subscription applications for all funds under its management starting from October 30, 2025, while existing investors' additional subscriptions will not be affected. Industry insiders indicate that private equity "closures" are mostly due to rapid inflow of funds or a cautious outlook on the market. Domestic Macro China's official manufacturing PMI fell to 49 in October, while the non-manufacturing index rose to 50.1, with three key industries maintaining expansion. The PMIs for high-tech manufacturing, equipment manufacturing, and consumer goods industries were 50.5, 50.2, and 50.1, respectively, continuing to be in the expansion zone and significantly higher than the overall manufacturing level. The new orders index was at 46%, unchanged from last month and still below the critical point, indicating weak market demand in the non-manufacturing sector. Shenwan Hongyuan's latest report shows that both supply and demand have declined, with the manufacturing PMI accelerating contraction in October. The double holiday effect drove the service industry's prosperity level to accelerate expansion in October, with business activity indices related to resident travel (rail transport, air transport, accommodation, cultural and sports entertainment, etc.) all remaining above 60 in a high prosperity range due to the Mid-Autumn and National Day holiday effects The October PMI shows that China's economy is under pressure at a low level. After the previous pressure in the bond market has gradually been released, attention to the fundamentals may increase. Guosheng Securities believes that there are signs of accelerated decline in the current economy, but it does not hinder the annual goal of "maintaining 5%," indicating that while short-term policies may "intensify," they are more about "supporting without lifting," and will also focus more on planning for the beginning of next year and further layout of the "14th Five-Year Plan." Specific deployments will closely monitor the Politburo meeting and the Central Economic Work Conference scheduled for early to mid-December; in the short term, attention can be focused on the effects of policy financial tools in the fourth quarter, the allocation of remaining quotas, and the resumption of buying and selling government bonds. Two departments: Taxpayers selling standard gold not through exchanges should pay value-added tax according to current regulations. On November 1, the Ministry of Finance and the State Administration of Taxation issued an announcement regarding tax policies related to gold. When member units or clients trade standard gold through the Shanghai Gold Exchange or the Shanghai Futures Exchange, the seller is exempt from value-added tax when selling standard gold. However, taxpayers selling standard gold not through exchanges should pay value-added tax according to current regulations. CICC's quick commentary on the new regulations for public fund performance benchmarks: Style drift shifts towards Alpha creation, returning to the essence of investment research. CICC believes that in the past, the "star effect," "relative assessment," and "scale orientation" environment prevailed in the public fund industry, leading some equity funds to treat performance benchmarks as irrelevant, engaging in style drift to seek short-term gains to attract capital inflows and achieve scale expansion. The implementation of the "new regulations" will expose these practices. China's nuclear energy technology makes new breakthroughs! Expected to break the reliance on uranium in nuclear power. The 2-megawatt liquid fuel thorium-based molten salt experimental reactor, led by the Shanghai Institute of Applied Physics, recently successfully completed the first conversion of thorium-uranium nuclear fuel. This reactor has become the only molten salt reactor in operation globally that has achieved the introduction of thorium fuel, providing key preliminary verification for the technical feasibility of utilizing thorium resources in molten salt nuclear energy systems. Domestic Companies Vanke: Shenzhen Metro Group agrees to provide the company with loans totaling up to 22 billion yuan. According to Jiemian, on November 2, Vanke announced that on November 2, 2025, the company entered into a loan framework agreement with its major shareholder, Shenzhen Metro Group, under which Shenzhen Metro Group agreed to provide the company with loans totaling up to 22 billion yuan, mainly covering: the unsecured credit loans that Shenzhen Metro Group has provided to the company according to the designated agreement before the effective date; and the secured loans that Shenzhen Metro Group will provide to the company according to the terms and conditions of the loan framework agreement on or after the effective date Overseas Macro How big is the current AI bubble? UBS: This round of bubble is more "reasonable" than the TMT period, and three key topping signals have not yet appeared. UBS's research report points out that we are in the early stages of a potential bubble, but the three key signals indicating a bubble peak—extreme valuations, long-term overheating catalysts, and short-term topping signals—have not yet appeared. The report emphasizes the strong productivity enhancement potential of generative AI, as well as the current higher risk of government balance sheets compared to corporations, providing a more solid foundation for this round of valuation expansion than during the 2000 internet bubble. Global Asset Mainstream Narrative: Consensus expectations are loosening but have not yet reversed. Financial market volatility has increased, but Guo Lei from GF Securities believes that the mainstream narrative has not yet reversed: first, the pattern of global fiscal expansion + monetary easing remains unchanged; second, there has been no unilateral reversal in geopolitical issues, global trade order, and central bank gold purchasing trends; third, the second inflection point of AI capital expenditure has not yet appeared. "Consumer confidence has fallen to the worst level in decades"! Goldman Sachs warns that American middle-class consumption is "stalling," and the 25-35 age group is "tightening their wallets". Goldman Sachs warns that weak consumption has spread from low-income groups to the middle class, especially among consumers aged 25-35. The CEO of Kraft Heinz stated that they are facing "the worst consumer confidence in decades." Stock performance confirms the deterioration of fundamentals, with companies targeting the middle class, such as Chipotle and CAVA, seeing their stock prices plummet, and the consumer discretionary sector underperforming the market by 500 basis points. The yen falls to an 8-month low; is Japan going to intervene? The new finance minister warns: closely monitoring the foreign exchange market with a high sense of urgency. The yen has depreciated by about 5% over the past month, prompting Japan's new finance minister to issue the strongest verbal warning since taking office—closely monitoring the foreign exchange market with "high urgency." As the yen approaches the important psychological level of 155 against the dollar, the conditions for intervention are gradually maturing. Bitcoin fell nearly 5% in October, marking the first October decline in six years. Bitcoin fell nearly 5% in October, ending its record of rising in October since 2018. Influenced by Trump's tariff threats, Bitcoin plummeted from a historical high of $126,000 to $104,000 in just a few days in mid-October, triggering the largest liquidation event in history. Analysts point out that under the impact of market uncertainty, investors have not returned to Bitcoin on a large scale, and asset volatility remains high. Overseas Companies Has Amazon's "AI Turning Point" Arrived? Amazon AWS's Project Rainier core data center has been fully operational and is currently training the Claude large model for Anthropic. The system has deployed nearly 500,000 Trainium 2 chips (expected to double to 1 million by the end of the year), making it one of the largest AI training computers in the world. This means that Amazon's AI infrastructure expansion is shifting from strategic layout to capacity realization. Morgan Stanley expects AWS's revenue growth rates to reach 23% and 25% over the next two years, while Bank of America predicts that Anthropic alone could bring up to $6 billion in incremental revenue to AWS by 2026. From "Mass Layoffs" to "Better Than Expected," Amazon was the most "reversed" company last week. Amazon faced pressure early in the week due to layoffs of 14,000 employees and doubts about "falling behind in AI." However, the company's earnings report released on Thursday became the strongest rebuttal: AWS sales grew 20% year-on-year, reaching a two-year high, and the self-developed AI chip business scaled to billions of dollars. This "better than expected" report not only propelled the stock price to a historic high but also reversed the market narrative for Amazon. The 36 People Reporting to Jensen Huang at NVIDIA. In addition to three veterans (GPU architecture mastermind Jonah Alben, software guru Dwight Diercks, and chief scientist Bill Dally), a new face of Chinese descent has attracted attention: Wu Xinzhou, Vice President of NVIDIA's automotive business, who is fully responsible for the strategic planning, product layout, and engineering execution of the automotive business. Betting on Anthropic's Great Success, Google and Amazon Gain Billions in Paper Profits. Reports indicate that Alphabet's third-quarter profits included $10.7 billion in net gains from equity securities, part of which came from Anthropic, with Amazon's investment in Anthropic contributing $9.5 billion in pre-tax profits. This is due to Anthropic's valuation soaring to $183 billion in the latest funding round, nearly tripling, marking the beginning of significant returns from the generative AI investment boom in public company earnings reports. Ilya Forced into Court by Musk, Revealing Shocking Insider Information about Altman and OpenAI. After firing Altman, the OpenAI board initiated a crazy "Plan B": they actively and seriously explored the possibility of merging with their top competitor, Anthropic, which could have allowed Anthropic's CEO Dario Amodei to take the helm at OpenAI Humanity's First Mechanical Ascension, Musk Boasts Neuralink Defeats All Humanity. Neuralink has implanted in 12 people, accumulating over 2000 days of use. Patients have moved from hospital beds to podiums, learning calculus, studying neuroscience, and even starting careers. This technology not only restores freedom but also grants "talent enhancements." Incremental Power Demand from U.S. Data Centers, "Off-Grid Solutions" Address "1/4 to 1/3," with Fuel Cells Meeting "25-50%". "Off-grid" power supply solutions have become a key force in solving the electricity dilemma for AI. Goldman Sachs predicts that by 2030, this emerging market will reach a scale of 20-25 gigawatts. With advantages such as rapid deployment and clean efficiency, fuel cell technology stands out and is expected to occupy up to 20 gigawatts of the "golden track," becoming a key energy source driving the future of AI. U.S. Power Project Reserves: Concentration of Photovoltaic and Wind Power in the Next Two Years, Surge in Natural Gas and Energy Storage Future Plans. Photovoltaic and wind energy projects are concentrated for production and grid connection in the next two years, with these two years' photovoltaic projects accounting for 94% and 99% of Goldman Sachs' predicted new capacity, respectively. Meanwhile, compared to the same period last year, the total capacity of currently planned natural gas and energy storage projects has surged by 127% and 60%, respectively, with most of these new projects planned to be operational between 2028-2030. Data Centers Impacting Consumption? AI Influencing U.S. Midterm Election Landscape, Reason: Electricity Prices! Regions with the highest electricity price increases are mostly Democratic-led, with states like Maryland, Delaware, and California experiencing a 29% increase in electricity prices over the past three years. Republicans are attempting to leverage voter dissatisfaction with soaring electricity prices to break the Democratic political dominance in certain districts during the midterm elections, targeting the green energy policies promoted by Democrats. Goldman Sachs: Eli Lilly is on the Eve of "The Strongest New Product Cycle in Biopharmaceutical History". Goldman Sachs believes that Eli Lilly's oral weight loss candidate orforglipron represents "one of the most important new product cycles across the entire biopharmaceutical spectrum." Management has revealed that global regulatory submissions are about to begin, with expectations for a launch in the U.S. market for obesity treatment next year. Today's News Preview China's October RatingDog Manufacturing PMI. U.S., Eurozone, and U.K. October Manufacturing PMI. The U.S. Senate's next vote on advancing the appropriations bill to stop the government "shutdown" will begin as early as the evening of November 3. Hong Kong FinTech Week. The International Financial Leaders Investment Summit is held in Hong Kong. Palantir's financial report