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Market Overview
The Nasdaq fell more than 1%, and the S&P Nasdaq fell for the fourth consecutive time to a nearly two-month low. Among the "seven sisters" of technology, Google rose alone, the chip stock index closed down more than 3%, Nvidia fell nearly 4%, and ASML fell 7% after the financial report. United Airlines rose 17% after the earnings report. The technology sector of European stocks fell more than 3%, LVMH rose nearly 3% and Adidas rose nearly 9% after the earnings report.
U.S. Treasury yields accelerated off five-month highs and the 10-year yield fell more than 10 basis points from its intraday high. The U.S. dollar index halted a five-month winning streak, falling off a five-month high, and the yen took a break from the 1990 low.
Crude oil fell more than 3%, the biggest drop in three months, and fell to a three-week low for the third time in a row. Gold fell to a record closing high for four consecutive days. London tin rose 3%, and London copper rose more than 1%, both rebounding to nearly two year highs. Bitcoin fell nearly $5,000 intraday and fell below the $60,000 mark for the first time in more than a month.
In the Chinese market, during the U.S. stock market, the Chinese concept stock index fell three times in a row, Xpeng Motors rose nearly 4%, and the offshore yuan rose more than 200 points intraday, rising above 7.25 to a new one-week high. The three major A-share indexes rose by more than 2%, the micro-cap index rebounded strongly by 9.6%, the CITIC Bank rose by the limit, and Hong Kong stocks closed up slightly.
News
The spokesperson of the Ministry of Commerce issued a statement on the US Section 301 investigation against China: China strongly deplores this and firmly opposes it.
National Development and Reform Commission: It is untenable to believe that more export commodities means overcapacity, and it is of great significance and bright prospects to actively and steadily promote the development of low-altitude economy.
The New York Fed "forecasts" the QT withdrawal roadmap: the Fed may stop shrinking its balance sheet next year, and the balance sheet size is expected to shrink to about $6-6.5 trillion. "Fighting" with real economic data, the Fed's Beige Book: inflation is generally moderate, and consumer price sensitivity remains high.
In February, Japan's holdings of U.S. bonds increased by $16.4 billion month-on-month, hitting a one-and-a-half-year high, while China's holdings fell by $22.7 billion, falling for two consecutive months, close to the 14-year low set last year.
Demand for the 20-year Treasury bond auction was strong, but at the cost of the second-highest rate in history.
Report: Trump's core advisers are plotting a policy of devaluing the dollar.
Lithography machine giant ASML reported a net profit of 1.2 billion euros in the first quarter, with new orders falling short of expectations. Citi: This earnings season, it's hard for chip giants to replicate last year.
The market closes
U.S. stocks: The Dow fell 0.12%, the S&P 500 fell 0.58%, and the Nasdaq fell 1.15%.
European stocks: Europe's STOXX 600 index closed up 0.06%. Germany's DAX 30 index closed up 0.02%. France's CAC 40 index closed up 0.62%. Britain's FTSE 100 index closed up 0.35%.
A-shares: The Shanghai Composite Index rose 2.14%, the Shenzhen Component Index rose 2.48%, and the ChiNext Index rose 2.11%.
Bond market: The yield on the benchmark US 10-year Treasury fell 8.01 basis points to 4.5873%. The yield on the two-year Treasury note fell 5.50 basis points to 4.9321%.
Commodities: WTI crude oil futures for May delivery closed down $2.67, or 3.13%, at $82.69 a barrel. Brent crude oil futures for June delivery closed down $2.73, or 3.03%, at $87.29 a barrel. COMEX gold futures fell 1.30% to $2,376.60 an ounce. COMEX silver futures fell 0.29% to $28.293. London tin closed up 3%, London nickel and London zinc rose about 2.9% at most, and London copper and London aluminum rose at least more than 1%.
Highlights
Domestic macro
The spokesperson of the Ministry of Commerce issued a statement on the US Section 301 investigation against China: China strongly deplores this and firmly opposes it. We urge the US to respect facts and multilateral rules, immediately stop its erroneous practices and return to the rules-based multilateral trading system. China will closely follow the progress of the investigation and will take all necessary measures to resolutely defend its rights and interests.
National Development and Reform Commission: It is untenable to think that there are more export commodities and overcapacity. Jin Xiandong, director of the Research Office of the National Development and Reform Commission, believes that under the conditions of a market economy, the balance between supply and demand is relative, and the imbalance is universal, and a moderate increase in production over demand is conducive to market competition and the survival of the fittest.
National Development and Reform Commission: It is of great significance and bright prospects to actively and steadily promote the development of low-altitude economy.
"Trade-in" in Shenzhen's property market: Leyoujia cooperated with LVGEM Real Estate's project "LVGEM Baishizhou" to pilot and promote the new model of "trade-in" in Shenzhen, and completed the transaction of existing houses and the rotation cycle with new houses.
Domestic companies
Following Goldman Sachs, Morgan Stanley also raised its price targets for PetroChina and CNOOC. Morgan Stanley raised its price target for PetroChina to 7.3 yuan from 6.5 yuan and CNOOC Limited from HK$18.18 to HK$19.8.
Overseas macro
The New York Fed "previewed" a roadmap for withdrawing QT: the Fed may stop shrinking its balance sheet next year. The New York Fed expects that the balance sheet reduction may end early or mid-next year, with bank reserves falling to $2.5 trillion or $3 trillion from the current level of about $3.6 trillion and a balance sheet shrinking to around $6 trillion or $6.5 trillion.
Federal Reserve Beige Book: Inflation is generally moderate, and consumer price sensitivity remains high. Less consistent with the larger-than-expected inflation data released last week, the Beige Book showed that price increases were generally stable and moderate, unchanged from the previous reporting period. Price sensitivity remains high among U.S. consumers. Overall, the contact people expect US inflation to remain at a slow pace going forward.
In February, Japan's holdings of U.S. bonds increased by $16.4 billion month-on-month, hitting a one-and-a-half-year high, while China's holdings fell by $22.7 billion, falling for two consecutive months, close to the 14-year low set last year.
Demand for the 20-year Treasury bond auction was strong, but at the cost of the second-highest rate in history. While yields on the 20-year Treasury auction are at a fairly high level on record, demand is strong by a number of other measures. The yield on the U.S. 20-year Treasury bond fell more than 2 basis points in the short term, falling below 4.82%, and touched as low as 4.8162%, falling 7 basis points overall during the day.
Report: Trump's core advisers are plotting a policy of devaluing the dollar. Nearly every former Trump administration official has stressed that the revaluation of the currency is likely to be a priority for Trump's second term.
BofA survey: fund managers' equity allocations have reached their highest level since January 2022. Fund managers' bullish sentiment has risen to a new high since the peak of the previous round of market conditions, and it is also the first time in more than two years that they are bullish on the macro economy. The survey showed that the average cash level of fund managers fell to 4.2% from 4.4% of AUM, which is close to a contrarian sell signal below 4%.
U.S. interest rate hikes "stimulated" the economy. Analysts say that the rate hikes have brought significant gains to bond investments and savings accounts, and "people have more money in their hands."
Inflation in the eurozone has been declining steadily, with the final CPI reading of 2.4% in March. The services sector remains the biggest obstacle to the decline in inflation.
Asian currency wars: South Korea has a rare warning, the South Korean won soars, the Philippine peso falls below 57, Goldman Sachs: Embracing the wave of Asian depreciation
- The strength of the US dollar has put pressure on Asian currencies across the board, and central banks have spoken out intensively. Bank of Korea Governor Rhee Chang-yong said on Wednesday that the won was too weak and that the central bank had the tools to act on exchange rate volatility. The South Korean won rebounded against the dollar, extending its intraday gains to 0.7%.
- Goldman Sachs believes that the current Fed expectation of interest rate cuts is in stark contrast to the beginning of the year, which may push the dollar to strengthen further, and when the dollar rises, the South Korean won, Malaysian ringgit and Indonesian rupiah are more sensitive, and these currencies are most at risk of depreciation.
The Vietnamese government is bailing out Saigon Commercial Bank (SCB) "on an unprecedented scale". As of early April, Vietnam's central bank had injected $24 billion in "special loans" into the SCB, providing a total amount of funds equivalent to 5.6% of Vietnam's annual GDP and a quarter of its foreign exchange reserves.
Bitcoin briefly fell below $60,000 intraday, and bitcoin may "halving" on Friday. Analysts believe that the "halving" may be one of the drivers of the crypto market rally this year, and the "halving" also directly affects the income of miners, which is not good for miners' stock prices.
Overseas companies
Tesla once again asked investors to approve Musk's $56 billion compensation package, and its stock price fell nearly 2% at one point. Tesla said that Musk's 2018 compensation plan has received shareholder support, and plans to hold a shareholder meeting in June, while voting to move its registration from Delaware to Texas.
Studies have shown that Eli Lilly's "weight loss miracle drug" can help relieve sleep apnea symptoms. According to the analysis, Eli Lilly's "miracle drug for weight loss" could benefit up to 5.6 million cases of sleep-disordered breathing if it is widely covered.
AI topics are related
Lithography machine giant ASML reported a net profit of 1.2 billion euros in the first quarter, with new orders falling short of expectations. ASML's net sales in the first quarter fell 22% year-on-year to 5.29 billion euros, and net profit fell 37% year-on-year, maintaining its sales outlook for 2024 unchanged. ASML closed down 6.68%.
Citi: This earnings season, it's hard for chip giants to replicate last year. Citi believes that the performance and guidance of semiconductor stocks in the first quarter of 2024 will be more flat, partly because the semiconductor bellwether AMD will not raise its revenue forecast for the AI segment until this summer, but in the long run, the semiconductor sector still has room to rise, driven by AI and memory chips.
HBM demand is strong, Bank of America: rushing for capacity may lead to a shortage of DRAM supply. As strong demand for HBM continues to squeeze DRAM supply, BofA expects a supply shortage of conventional DRAM for non-HBM applications by 2025.
The European Union has dropped an antitrust investigation into Microsoft's $13 billion investment in OpenAI.
Industry/Concept
1. Non-ferrous antimony| According to Baichuan Yingfu data, on April 17, the price of antimony continued to rise, the price of antimony concentrate was 79,850 yuan/metal ton, up 1.91% from the previous working day, the market reference price of antimony trioxide was 82,830 yuan/ton, up 1.84%, and the price of antimony ingot was 95,380 yuan/ton, up 1.6%.
Comments: According to the analysis, in the short term, the difficulty in starting the mine has led to the current tight supply and circulation of antimony concentrate, and the recent shortage of raw material inventory in downstream refineries has led to a relatively obvious shortage of supply in the field. As of early April 2024, antimony ingot and antimony oxide inventories both fell by 9% month-on-month. Antimony ingot inventories are at a historically low level, close to the level of antimony prices at the beginning of 2021, and the antimony industry chain has also shown abnormal destocking since Q4 2023.
2. Innovative drugs On April 17, the Beijing Municipal Medical Security Bureau and other departments jointly issued the "Several Measures to Support the High-quality Development of Innovative Pharmaceuticals in Beijing (2024)", which put forward eight major work measures in terms of improving the quality and efficiency of clinical research of innovative pharmaceuticals and promoting the clinical application of innovative pharmaceuticals.
Comments: Industry insiders believe that expanding the payment channels for innovative drugs is a highlight of the "Measures". In recent years, many pharmaceutical companies have been plagued by issues such as the entry of national drugs into hospitals and the DRG payment of new drugs and technologies. The promulgation of the "Measures" has partially broken through the barriers to the "last mile" of the national talks into hospitals, so that innovative drugs have more opportunities. The Measures also strengthen the promotion of the clinical application of innovative medicines, give priority to the launch of a unified pricing demonstration procedure for innovative technology projects, and simultaneously study the inclusion of medical insurance payments.
3. Energy storage According to a report by The Paper on April 17, Tesla China introduced that Tesla's Shanghai energy storage super factory project is scheduled to start in May this year and complete mass production in the first quarter of 2025. This is Tesla's first energy storage gigafactory project outside of the United States.
Comments: According to the analysis, this means that Tesla's energy storage industry layout is accelerating, and the data shows that in 2023, global energy storage battery shipments will reach 224.2GWh, a year-on-year increase of 40.7%, of which Chinese enterprise shipments account for 90.9%. Research institutions predict that global shipments of energy storage batteries will reach 1397.8GWh by 2030. From the perspective of the competitive landscape, power system energy storage is still the largest application field, and the high demand for overseas household energy storage will drive the growth of household energy storage shipments. The global energy storage battery market is expected to reach $1.2 trillion by 2030.
4. Hydrogen energy According to Sinopec, at 10 a.m. on April 9, two hydrogen heavy trucks departed from Qingyundian Oil-Hydrogen Co-construction Station in Daxing District, Beijing, and arrived at Qingwei Oil-Hydrogen Co-construction Station in Qingpu District, Shanghai at 3 p.m. on April 11, with a total distance of about 1,500 kilometers, and hydrogen replenishment at 7 hydrogen refueling stations along the way. This is the first large-scale, long-distance, and cross-regional practical transportation test of a hydrogen vehicle in Continental.
Comments: Changjiang Securities believes that with the continuous progress of fuel cell technology, long life, adaptation to poor working conditions, low hydrogen consumption, and multi-application scenarios and diversified business development, industry leading companies with price advantages may have begun to seize the market.
5. AI security| According to a report by Shangguan News on April 17, from April 15 to 19, the 27th United Nations Science and Technology Conference was held in Geneva, Switzerland, and the World Digital Technology Institute (WDTA) released a series of breakthrough results at the meeting, including two international standards, "Generative AI Application Security Testing Standards" and "Large Language Model Security Testing Methods".
Comments: According to the analysis, the standard released this time brings together the wisdom of experts in the field of global AI security, fills the gap in the field of security testing of large language models and generative AI applications, and provides a unified test framework and clear test methods for the industry, which will help improve the security of AI systems and promote the responsible development of AI technology.
6. Aerospace| According to the China Manned Space Engineering Office, on April 17, the Shenzhou-18 manned spacecraft and the Long March-2F Yao-18 carrier rocket assembly have been transferred to the launch area. At present, the facilities and equipment at the launch site are in good condition, and various functional inspections and joint tests before the launch will be carried out as planned, and the launch is planned to be carried out at an opportune time in the near future.
Comments: According to the analysis, the space economy has become a new growth point for the national economy. The space economy includes space technology and products, satellite applications, space tourism, space and space cultural industries, space support and support services, etc. The size of the space economy has increased thousandfold in more than 60 years, making it one of the fastest-growing economies.
Today's news preview
China's Swift renminbi accounted for the share of global payments in March.
TSMC and Netflix announced their financial reports.
Lenovo held the Lenovo Innovation and Technology Conference.
G20 finance ministers and central bank governors meet.
Speeches by the President of the New York Fed and the President of the Atlanta Fed.
The number of initial jobless claims in the United States last week.
Total U.S. existing home sales in March.
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