"Stock Market Decoder" The United States just announced an increase of 57,000 in non-farm employment for June, far below the market expectation of 113,000, with the previous value also significantly revised down to less than 130,000. The labor participation rate unexpectedly dropped to 61.5%, the lowest in over five years. Although the unemployment rate slightly decreased to 4.2%, the weak data raised concerns about a slowdown in the U.S. economy, but it also reduced the likelihood of the Federal Reserve raising interest rates in the short term, which in turn prompted an expansion in the gains of U.S. stock index futures, while U.S. Treasury yields and the dollar both suffered significant declines.

In the context of overall economic uncertainty, NVIDIA (US.NVDA) announced it will collaborate with AI cloud providers to deploy large multi-tenant AI factories through revenue-sharing and credit support models, aiming to profit by massively releasing cloud computing power via the DSX platform. On the other hand, Meta (US.META), which has long invested heavily in expanding data centers, plans to sell excess computing power and model services to external clients, officially declaring war on cloud giants like Amazon AWS, Microsoft Azure, and Google Cloud. In response to changing environmental conditions, Microsoft (US.MSFT) is rumored to be launching a new round of layoffs as early as this week, expected to reduce about 5,500 employees across several departments, including sales and the Xbox gaming division, raising the question of whether AI is a helper or a competitor to humans. Facing the tech industry's demand for hardware infrastructure, Micron (US.MU) CEO Sanjay Mehrotra warned on CNBC that memory prices had plummeted to one-third in 2023, causing manufacturers to fall into negative profit margins, criticizing some customers for excessively driving down prices, which has severely eroded the industry's long-term investment and R&D capabilities, specifically targeting Apple (US.AAPL). However, in the business world, who can be blamed for clear buying and selling?

\* Behind the Glory *

The global technology and economic landscape is undergoing a dramatic transformation led by digital transformation and the rise of semiconductors. In the consumer electronics sector, Sony Interactive Entertainment announced it will stop producing physical disc games for PlayStation starting January 2028 and will gradually close the online stores for PS3 and PS Vita, symbolizing the full transition of console gaming into the digital age. In the semiconductor economy, South Korea is benefiting from the strong demand for chips driven by the global AI wave, with June exports increasing by 70.9% year-on-year to $102.25 billion, becoming a global focus and achieving the largest increase in nearly half a century. This also makes South Korea the fourth country in the world, after Germany, China, and the United States, to exceed $100 billion in monthly exports, with the trade surplus in the first half of the year surging to a new high of nearly $140 billion. However, behind the impressive data, Samsung's foundry has adjusted its supply order due to insufficient capacity, prioritizing existing customers and selectively accepting new orders, giving a sense of "the emperor's daughter is not worried about marriage." Media also warns that the nationwide stock trading craze in South Korea has triggered a leveraged ETF crisis, similar to the gold trend earlier this year; if the market reverses, it could become a potential culprit for severe fluctuations in global stock markets \* The Loss of the Horse of Sai Weng *

The Chinese semiconductor sector is experiencing a dual bonus from the rise in AI computing power and production capacity prices. As the first domestic AI chip stock, Cambricon has seen its stock price soar to 1,613 RMB, with its market value surpassing 1 trillion RMB for the first time, setting a new record in the domestic Sci-Tech Innovation Board. Despite its high PE ratio raising market concerns about the sustainability of profits, the traditional power semiconductor supply chain is also witnessing a price surge due to recovering demand. Leading foundry company, Chipone, announced a price increase of 15% to 25% for the third quarter, marking the second price hike this year. Major companies like Silan Micro and China Resources Micro have followed suit, with officials emphasizing that this is not merely a cost pass-through but a collaborative choice for the long-term development of upstream and downstream sectors, representing another example of justified price increases. These trends indicate that the Chinese chip industry not only demonstrates strong capital-absorbing power in AI computing but that traditional semiconductor companies are also entering a new round of bonus cycles due to optimized supply-demand structures. Trump's technology blockade has inadvertently accelerated the growth of domestic AI-related enterprises.

\* Ultimate Escape *

The put-call ratio for the Hang Seng Index options next month is 60:40, with heavy positions at the 24,000-point call and 22,000-point put options, along with an increase in positions at the 23,600-point put. It is believed that the Hang Seng Index will peak at 24,000 points in the short term; the bull-bear certificate street ratio is 51:49, with bear certificates concentrated between 23,900 and 24,100 points. Summarizing various position data, it appears that large investors are leaning bearish in July, and retail investors should consider exiting during rebounds.

The latest economic data from Hong Kong shows that GDP grew nearly 6% year-on-year in the first quarter, primarily driven by exports and investments, with both goods imports and exports recording over 20% growth, reflecting continued improvement in external demand. Private consumption rose by less than 5%, and although overall retail has rebounded, the recovery of domestic demand remains to be verified. Employment numbers have declined, and the overall unemployment rate in Hong Kong remains around 3%, indicating that employment pressure has not eased. Industry differentiation is becoming more apparent, with the financial and insurance sectors growing by 8%, and the overall service industry rising by over 6%, while the restaurant and accommodation sectors saw growth of less than 1%, and manufacturing remains weak. Overall, Hong Kong's economy is benefiting in the short term from foreign trade and investment, but domestic demand and the labor market remain concerns. Consumer confidence and the global interest rate environment will be key areas of focus for Hong Kong's economy in the future.

\* Stock Commentary *

Oriental Watch Holdings Limited (00398) primarily engages in the distribution and retail of watches, clocks, pens, and lighters in mainland China, Hong Kong, and Macau, representing over 60 luxury watch brands, mainly Swiss brands such as Rolex, Tudor, Vacheron Constantin, Audemars Piguet, IWC, Jaeger-LeCoultre, and Omega. The group recently announced its full-year results for the period ending March 31, 2026, showing that despite headwinds from a weak retail market and changing consumer patterns, its overall performance still demonstrates notable defensiveness. The group recorded a turnover of approximately 3.423 billion RMB, a slight year-on-year decline of 0.8% (compared to 3.45 billion RMB in the previous fiscal year), reflecting the group's ability to stabilize its position in a market environment where luxury consumption is slowing, thanks to its solid brand portfolio and core customer base However, constrained by operating costs and market price reduction promotional pressures, the group's profitability has also been under pressure, with a pre-tax profit of HKD 328 million recorded during the period, a year-on-year decrease of 2.6%. The profit attributable to shareholders was HKD 180 million, with a year-on-year decline of over 10%.

As a well-established watch retailer in the Greater China region, Oriental Watch Holdings Group faces a dual challenge of high base effects and a cooling luxury goods market in the mainland and Hong Kong-Macau markets. The decline in revenue has been controlled within 1%, which is already better than some peers. The market will continue to pay attention to its inventory optimization strategy and the stability of its dividend policy. However, the opening of directly operated stores by Rolex after acquiring Patek Philippe, as well as some old agents in Hong Kong losing their agency rights, may mark the beginning of a nightmare for Oriental Watch Holdings Group or other Rolex agents, especially since the group's revenue mainly comes from Rolex. Coupled with the lack of improvement in luxury goods consumption, these are negative factors for the group's stock price in the future. Investors holding shares should consider selling at the current price. "Senior market commentator Dai Ming"

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* The above views are merely personal opinions on the market and do not constitute any investment solicitation or advice. Readers can communicate via email at imail1997@gmail.com