纳斯达克战士

Technology continues to be a tale of two extremes.

Hardware continues to plummet, with capital rotating back to Apple, Amazon, Google, and others.

Among the "Seven Sisters," except for Dazi and Tesla, the others are doing quite well.

This is essentially what Morgan Stanley previously called "selling chips, buying cloud."

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Another piece of good news! The US just released its June PPI data, with both PPI and core PPI coming in below expectations, and the PPI month-on-month rate even turned negative.

As a producer price index, this will also impact inflation, so this data is also positive for the market. After the data was released, the probability of a Fed rate hike continued to decrease. By the way, from around 10:00 to 12:00 later, the Fed's Waller will be participating in a hearing again.

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Great news! The US just released its June CPI inflation data. The market expected 3.8%, but the actual figure was only 3.5%. Additionally, the core CPI was 2.6%, also below expectations.

US inflation has indeed fallen along with the drop in oil prices.

After the data was released, the probability of a Fed rate hike decreased. This is significant positive news for the market. By the way, Fed's Waller will be attending a hearing later.

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Are you ready? The most important CPI data of the year in the US is scheduled to be released tonight.

Why is it the most important? First, it's the first month's CPI data after the decline in oil prices. The market predicts it will drop from last month's 4.2% to 3.8%, indicating significant optimistic expectations from the market.

Then, Fed's Waller said last night that if the data tonight is not good, he will support raising interest rates in the near term. Therefore, tonight's data will directly impact the Fed's interest rate policy in September, or even as early as July. The entire market is waiting for this data.

Additionally, after the data release, Wash will attend a Senate hearing tonight. The market will also look for clues from his Q&A session.

So tonight is destined to be anything but calm. And are you ready?

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I feel the opportunity is almost here.

Just now, Trump came out saying he would reinstate the blockade on Iran, and that he would also charge a 20% fee for ships from other countries and regions passing through. He said this is a security fee.

After the news came out, market sentiment was collectively released, with a short-term dip.

However, I feel the negative news has been mostly released, and the opportunity is almost here. Anyway, I chose to hold steady, but I still have to repeat that saying: don't put all your eggs in one basket.

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Meta, please! (expressing exasperation)

The broader market just took a dive. I didn't see any other news, only that Meta said it's going to wage a price war on models, saying it will win through a price war.

So, can we pin this market drop on you?

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Isn't Meta coming out again? Is this to start a price war??

Saying its new model will win through price?

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Is Meta "slapping itself in the face"? Building new data centers!

META has left everyone confused this time. They announced plans to invest $10 billion in building their first data center in Canada, aiming to expand their global data center network.

However, they previously mentioned having excess computing power and even considered renting some of it out. The contrast is stark; if there's truly a surplus, there's no need to keep spending on new data centers.

So, one possibility is that the earlier adjustments were only for some short-term projects, and the rental plan was also a short-term strategy. They likely still believe long-term AI demand will be insufficient, hence the continued investment.

As the saying goes, it's best for the one who tied the bell to untie it. Now it's up to the market to interpret this. At least for today, the tech sector has shown some recovery.

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Warsh's First FOMC Minutes

The Federal Reserve released Warsh's first monetary policy meeting minutes in the early hours, which contained several important signals.

First, they listed AI investment as a significant source of inflation for the first time. They believe that AI investments such as data center construction and computing power will bring sustained pressure to inflation.

Second, the internal attitude of the Fed has changed significantly compared to March. The number of people expecting a rate hike this year increased from 0 last time to 9, while only 1 person expects a rate cut. This is hawkish, but this is the dot plot we mentioned before, which is not very meaningful and will change with the data.

Third, they reiterated that subsequent interest rate policies will be decided based on the latest inflation and employment data.

Alright, although the overall tone is neutral to hawkish, the market has mostly priced it in, and these decisions are based on previous data. We can see that the big non-farm payrolls released this month have already cooled down. Now, it all depends on the CPI data to be released next week.

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Reminder to pay attention to the Fed's meeting minutes released in the early morning.

A reminder that the Fed will release the minutes of its last monetary policy meeting at 2 a.m. tonight.

This is essentially a review of what happened at the last meeting.

There are three main points of interest this time.

First, how the Fed internally views the current inflation and employment situation.

Second, whether there is internal disagreement about future interest rates; that is, to see how many doves versus hawks there are, preferably with more doves than hawks.

Third, and most importantly, whether Waller will change the Fed's previous communication style, making the minutes more concise and reducing hints about future policy.

Alright, hoping for some positive news in the early morning to rescue the sluggish market.

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Since Trump did not mention terminating the agreement during the NATO summit, the market has been speculating on a taco expectation, leading to a short-term surge.

Is the positive news that the longs want really this simple?

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Is the US-Iran agreement over? The market has skidded!

The market just skidded because Trump (the "know-it-all") was speaking, saying he believes the memorandum of understanding previously reached with Iran is over. After the news came out, oil prices surged in the short term, and then all other sectors skidded.

Sigh, this farce is really exhausting.

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US Treasury yields have surged, and the market continues to be volatile.

US Treasury yields have surged again, with 20-year and 30-year Treasuries breaking through 5% again today. The reasons behind this, besides high expectations for the Fed to raise interest rates, are also likely that Japan is selling US Treasuries to obtain US dollars to defend its exchange rate.

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They have often done this before, but doing so seems to have fallen into a vicious cycle. Selling US Treasuries will cause US Treasury yields to rise, thereby widening the US-Japan interest rate differential. This will increase the pressure on yen outflows and depreciation. So we can see that Japan's numerous interventions have had little effect, and the situation is getting worse.

Now it all depends on when expectations for the Fed to raise interest rates can come down. Otherwise, the entire market will inevitably be volatile.

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Bros, what else can I say?

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Morgan Stanley predicts the Fed won't raise interest rates this year

Morgan Stanley is also turning dove. Their economists said the Fed won't raise rates this year,

They gave three main reasons:

First, Waller's stance has shifted from solely focusing on inflation to also paying attention to employment, signaling a dovish tilt,

Second, falling oil prices have lowered future inflation expectations,

Third, Morgan Stanley's internal inflation forecast is below the Fed's internal median, so they believe the Fed won't raise rates in '26,

Well, anyway, the data will tell. Whether there will be a rate hike, we'll know by looking at the CPI data in June and July.

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Next Week Preview! Fed Meeting Minutes Review!

First, on Tuesday, South Korea's Samsung will announce its Q2 earnings guidance. Let's see the latest performance of this semiconductor and memory giant, which will have an impact on the memory sector and even the entire AI sector.

Then, early Thursday morning in the US, there will be a 10-year US Treasury auction. The results of this auction can also reflect market expectations for future US inflation and interest rates. If the auction results are good, it can boost confidence in the entire market.

Immediately after, the Fed will release the minutes from its last monetary policy meeting. This will give everyone a good look at what happened during Waller's Fed debut meeting and also show the Fed's internal stance on inflation, employment, and interest rates.

In the evening, just check last week's unemployment claims numbers.

Finally, on Friday, South Korea's memory leader SK Hynix may list in the US. This time, their maximum fundraising amount could reach $29.4 billion. If it goes ahead, it will be another one of the largest IPOs in recent years. However, its impact on liquidity won't be as obvious as SpaceX's before, but it will still affect the memory and tech sectors.

Alright, updating the next week preview every weekend.

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Big positive! The latest US non-farm payrolls data came in significantly below expectations!

The US just released its June employment data. Market expectations were 110,000, but the actual number was only 50,000.

Furthermore, the non-farm payrolls for April and May were also revised down by a combined 74,000. The US job market is cooling down!

After the data was released, the probability of a rate hike decreased. This is good news for the market. We can also see the entire market surging straight up.

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Waller's speech was dovish, but Meta tanked the market.

Waller's speech tonight was dovish, especially the line about inflation risks having subsided, which is why you can see the yellow line surging. But why did the U.S. tech market get hammered? That's because Meta actually came out and said its computing power is in surplus and it plans to sell the excess.

When you say something like that, the market interprets it as AI hardware reaching saturation and limited growth potential. So the market directly sold off tech stocks. Especially the AI hardware sector.

Let's see if sentiment can recover a bit later in the night.

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Not Meta actually came out and said you have a computing power surplus.....

It can be seen that after the news came out, the tech sector experienced a small-scale dip.

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The US has released the latest ADP employment data

The US just released its June ADP employment data. The market expected an increase of 118,000, but the actual figure was 98,000.

The US employment situation hasn't continued to heat up, but it's not bad either; it's considered a neutral data point.

If tomorrow night's non-farm payrolls also come in below expectations, then the probability of a Fed rate hike could hopefully decrease. By the way, Fed's Waller is about to start speaking soon.

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Fed's Warsh speech + ADP report coming tonight

There are two important things tonight,

The first and most important is Fed's Warsh will speak at the European forum at 9:30 PM. This is his first international speech. He may not directly give future interest rate policy guidance but may comment on the current inflation and employment situation. The market will fully interpret it.

Then the second is the US June ADP employment data at the earlier 8:15 PM. The current market expectation is an increase of 118,000. Let's see if it will exceed expectations again tonight, and also look at the specific employment direction.

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Positive news! European inflation begins to cool down.

Some European countries released their latest CPI inflation data today, with Germany, France, and Italy's CPI figures all coming in lower than expected.

This means that as oil prices fall, inflation has also decreased, and the market has lowered the probability of a rate hike in Europe this year, which is positive for the market.

Now that European inflation has started to cool, will US inflation follow suit as oil prices drop?

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The Japanese yen is depreciating wildly, beware of a Japanese surprise.

The depreciation of the yen is too crazy. Everyone needs to be vigilant, it has fallen below 162 against the US dollar today. This is the lowest level since 1986, a 40-year low,

considering this is happening just after Japan completed an interest rate hike and has already used 11 trillion yen for intervention this year. I heard they even sold US Treasury bonds to intervene in the exchange rate.

Moreover, they keep talking tough, saying they will raise interest rates once more this year, but the market just isn't buying it, and the depreciation continues. So everyone needs to be a bit more cautious now. If the yen continues to depreciate, Japan might adopt some more aggressive policies to protect the exchange rate (could it be a surprise like before?). This could bring volatility to the global market.

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Can you hold on, Kang God? I've been bullish on you for a long time.

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Corning's new glass bridge technology targets the CPO market!

Optical fiber giant Corning recently released a blockbuster CPO product called Glass Bridge, a new generation of glass-based optical interconnect technology, aimed at solving the most difficult process in CPO—optical coupling.

You should know that traditional CPO packaging requires aligning optical fibers and silicon photonic chips point by point, which is slow, expensive, and has a low yield rate.

The concept of this Glass Bridge is to directly create optical waveguides within the glass, pre-engraving the alignment coordinates into the glass. During assembly, there's no need for individual light adjustment; instead, components are directly plugged in according to the coordinates.

So the market has been speculating on glass drilling these past two days. However, the real core value isn't just the drilling equipment, but also low-iron specialty glass, ion-exchange waveguides, and optical coupling processes.

Of course, this approach is still in the verification stage, and it will take considerable time before true mass production. But it at least indicates one thing: the core of the next-generation AI optical interconnect competition might be gradually shifting from electrical interconnects to optical interconnects.

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