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Market Overview
The S&P Nasdaq fell for five consecutive years, the S&P hit the longest losing streak in half a year, and the Nasdaq hit a new low in nearly two months, and the Dow rebounded slightly. Tesla, which was downgraded by Deutsche Bank, closed down 3.6% to a new low in more than a year, while Meta closed up 1.5%. TSMC's guidance suppressed chip stocks, and the chip stock index fell more than 1%, but Nvidia turned up after falling nearly 2% at the beginning of the session, and TSMC's U.S. stocks fell nearly 5%. Netflix's post-market earnings report fell 7% at one point.
Treasury yields accelerated after hawkish speeches by the Fed's triad, with the two-year yield rising to 5% and approaching a five-month high, and the rebounding dollar index refreshed its daily high. The yen is approaching its lowest level since 1990.
Crude oil fell for four consecutive years and hit a three-week low, and turned up after falling more than 1% intraday. The rebounded futures were affected by the speech of the Fed's third-in-command, and once "flashed". Lunxi rose nearly 4%, and Lun copper hit a new high in the past two years. Bitcoin rebounded more than $3,000 intraday and regained $64,000.
In the Chinese market, during the U.S. stock market, the Chinese concept stock index closed up 1%, stopping three consecutive declines, NIO rose more than 2%, Xpeng Motors fell more than 3%, and the offshore yuan fell more than 100 points to 7.25 intraday. A-shares rose and fell throughout the day, with the Shanghai Composite Index once standing above 3,100 points, bank stocks continuing to erupt, and 30-year treasury bond futures rising sharply.
News
The People's Bank of China: There is still room for monetary policy in the future, and it will closely observe the effect of the policy and make good use of the reserve policy. In the first quarter of this year, the ratio of loans to the historical average returned to the historical average, leaving plenty of room for credit growth in the next three quarters.
At the end of March, Huijin bought nearly 160 billion yuan of three partial stock ETFs, and the cumulative position exceeded 200 billion yuan.
The Fed's "third-in-command" mentioned the possibility of raising interest rates, which turned significantly hawkish from earlier this week, and the president of the Atlanta Fed also mentioned it.
The demand for AI is strong, and TSMC's first-quarter profit increased for the first time in a year, but the growth forecast of the global wafer foundry industry was lowered, and TSMC's U.S. stock fell by more than 6% after its earnings report.
Huawei Pura 70 suddenly went on sale, sold out in less than a minute, about 200 people lined up at Huawei's global flagship store in Shanghai, and dealers: 500 yuan more was in stock.
Meta launched the strongest open-source model, Llama 3, challenging GPT, and the "smartest" free AI assistant on social media.
Netflix added 9.33 million subscribers in the first quarter, doubling from expectations, but signaling a slowdown in growth, falling 7% after hours.
The market closes
U.S. stocks: The Dow rose 0.06%, the S&P 500 fell 0.22%, and the Nasdaq fell 0.52%.
European stocks: Europe's STOXX 600 index closed up 0.24%. Germany's DAX 30 index closed up 0.38%. France's CAC 40 index closed up 0.52%. Britain's FTSE 100 index closed up 0.37%.
A-shares: The Shanghai Composite Index rose 0.09%, the Shenzhen Component Index fell 0.05%, and the ChiNext Index fell 0.55%.
Bond market: The yield on the benchmark US 10-year Treasury rose 4.53 basis points to 4.6326%. The yield on the two-year Treasury note rose 5.40 basis points to 4.9861%.
Commodities: WTI crude oil futures for May delivery closed up $0.04, or 0.05%, at $82.73 a barrel. Brent crude oil futures for June delivery closed down $0.18, or 0.21%, at $87.11 a barrel. COMEX gold futures rose 0.25% to $2,394.40 an ounce. London tin closed up about 3.7%, and London copper, London aluminum, London lead, and London nickel rose more than 1%.
Highlights
Domestic macro
The People's Bank of China: There is still room for monetary policy in the future, and it will closely observe the effect of the policy and make good use of the reserve policy. Zhu Hexin, Deputy Governor of the People's Bank of China and Director of the State Administration of Foreign Exchange, pointed out that he should pay close attention to the changes in the foreign exchange market situation, continue to implement comprehensive policies, stabilize expectations, resolutely correct pro-cyclical behaviors, resolutely guard against the risk of exchange rate overshoot, and maintain the basic stability of the RMB exchange rate at an equilibrium level. In the first quarter of this year, the ratio of loans to the historical average returned to the historical average, leaving plenty of room for credit growth in the next three quarters.
Wang Chunying, State Administration of Foreign Exchange: Since the beginning of this year, foreign investors have accumulated a net increase of more than 40 billion US dollars in domestic bonds.
People's Bank of China Governor Pan Gongsheng met with Fed Chairman Jerome Powell. On April 17, 2024, Pan Gongsheng, Governor of the People's Bank of China, met with Fed Chairman Jerome Powell on the sidelines of the IMF/World Bank Spring Meetings in Washington, D.C., and exchanged views on the economic situation, monetary policy, financial stability and other issues between China and the United States.
At the end of March, Huijin bought nearly 160 billion yuan of three partial stock ETFs, and the cumulative position exceeded 200 billion yuan. In the latest quarterly reports of ChinaAMC CSI 300 ETF, ChinaAMC SSE 50 ETF and Harvest CSI 300 ETF, it is only mentioned that there are institutions that hold a fairly high proportion of their ETF shares. However, comparing the information, it can be found that it is Huijin's account that has been shot.
Shanghai copper hit a new high since 2006. On the news side, mining giant Vale's Sossego copper mine in Brazil was shut down. Everbright Securities believes that the gap between supply and demand in the industry will widen, and copper prices are expected to rise to more than US$12,000/ton.
Domestic companies
The demand for AI is strong, and TSMC's first-quarter profit increased for the first time in a year, but the growth forecast of the global wafer foundry industry was lowered, and TSMC's U.S. stock fell by more than 6% after its earnings report
- TSMC's net profit in the first quarter was NT$225.5 billion, up 8.9% year-on-year, revenue was NT$592.64 billion, up 17% year-on-year, the fastest growth rate in more than a year, operating margin was 42%, and net profit margin was 38%. TSMC's first-quarter financial report was in line with expectations as a whole, with revenue weakened by seasonality, gross profit margin maintained at 50%, and Apple's demand was poor, but Nvidia came to the rescue, and there was still demand for high-performance computing to fill production capacity.
- Wall Street generally believes that strong demand in the AI space can still help TSMC offset the sluggish demand for general-purpose servers and automotive chips. JPMorgan Chase said that although TSMC failed to raise its capital expenditure expectations, there is still room for capital expenditure to improve in the future as the 2nm process is rolled out at an accelerated pace. Goldman Sachs said it expects TSMC's packaging and testing capabilities to double again in 2025.
Huawei Pura 70 suddenly went on sale, sold out in less than a minute, about 200 people lined up at Huawei's global flagship store in Shanghai, and dealers: 500 yuan more was in stock. The lowest price of Pura 70 Pro is 6499 yuan, and the highest price of the highest version of Pura 70 Ultra reaches 10999 yuan.
Lenovo has released a number of AI computers with embedded personal agents. Lenovo released the first batch of more than 10 AI PCs, with 5 major features and 10 major applications, and embedded personal agent "Lenovo Xiaotian".
The domestic software Talkie overseas AI accompanied the market to emerge. Talkie's clever combination of AI chatbots and card gameplay and the introduction of a marketplace trading mechanism not only greatly improves the user experience, but also explores new ways to monetize such apps. Since September 2023, Talkie's ranking has continued to lead the Character.AI of the top players in the AI escort track.
Lei Jun: There is no cold 4 billion in the card, Xiaomi SU7 sales are 3 to 5 times higher than expected, "It's too early to talk about success"! Lei Jun responded in the live broadcast, I am not the top student in the college entrance examination, I have not scored 700 points, and I did not have a cold 4 billion in the card at the trough of my life, I am also like everyone, born in the countryside, relying on diligence, hard work, and the opportunity of this era step by step to get to today.
EVE achieved a net profit of 4.05 billion yuan last year, an increase of 15% year-on-year, and plans to distribute 5 yuan in 10. In 2023, the company's domestic market share of power batteries will reach 4.45%, ranking fourth, an increase of two places from the previous year.
Overseas macro
The Fed's "three-in-command" mentioned the possibility of raising interest rates, which turned significantly hawkish from earlier this week. New York Fed President Williams warned that the Fed will raise interest rates if the data shows that the Fed needs to raise interest rates to achieve its goals. While Williams stressed that "rate hikes" are not the baseline he expected, his latest speech was distinctly hawkish than his comments earlier than the last week. On the same day, Atlanta Fed President Bostic also said that he was open to raising interest rates if inflation in the United States rose. This means that more and more senior Fed officials are mentioning the scenario of "raising interest rates", which is very different from the previous months.
U.S. Treasury yields have soared, and Wall Street has warned of a possible "return to the 5% era" in the short term. Vanguard believes that the 10-year Treasury yield breaking above the 4.75% mark could trigger a massive sell-off, and Macquarie believes that the 5% yield level is "likely within reach in the coming weeks".
U.S. existing home sales fell by the most month-on-month in more than a year in March, home prices hit a new high, and inventories continued to climb. U.S. existing home sales fell 4.3% month-on-month in March, the biggest monthly decline since November 2022, median home prices rose 5.7% year-on-year, and inventories surged 14.4% year-on-year. The latest data released by Freddie Mac on the same day on Thursday showed that U.S. mortgage rates surged to their highest level since late last year.
Currency wars continued: Asian currencies stopped falling and rebounded, while Japanese and South Korean stocks rebounded.
Overseas companies
Meta launched the strongest open-source model, Llama 3, challenging GPT, and the "smartest" free AI assistant on social media.
- The maximum parameter scale of Llama 3 exceeds 400 billion, the training token exceeds 15 trillion, and the winning rate of multiple human evaluations compared with GPT-3.5 is more than 60%; Amazon, Microsoft, and Google Cloud will launch Llama 3, and NVIDIA, Intel, and AMD hardware platforms will support Llama 3. According to Nvidia, Meta trained Llama 3 with a computer cluster equipped with more than 24,000 H100 chips. The Meta AI assistant will be available in English in 13 countries outside the United States, and can be used on mobile phones and computers, so you don't need to switch apps to query it, and the image function can update the image in real time according to the prompt word, and can generate GIFs.
Netflix added 9.33 million subscribers in the first quarter, doubling from expectations, but signaling a slowdown in growth, falling 7% after hours. According to some analysts, Netflix warned that "typical seasonal factors will make the user growth in the second quarter lower than in the first quarter", and key indicators such as the number of quarterly members will no longer be announced in the first quarter of next year, all suggesting that the positive momentum of user growth will slow down, triggering an after-hours setback. Otherwise, the overall earnings report is positive, with a 15% increase in revenue in the first quarter at least the best in two years, and the highest operating margin in at least three years.
Microsoft plans to stock up on 1.8 million GPUs by the end of the year. According to the report, Microsoft plans to triple the number of GPUs it owns in 2024, and by fiscal 2027, Microsoft expects to spend $100 billion on GPUs and data centers.
Groq CEO's latest interview: 1.5 million LPUs will be deployed by the end of next year, accounting for half of the global inference demand. Groq CEO Jonathan said that although NVIDIA is good at AI training, it has limitations in inference, and Groq's chips have several times advantages in inference speed and cost, and the share of the inference market will increase from the current 5% to 90%-95% in the future.
Behind the AI are all Indians, and India has become the "world's service factory". Goldman Sachs noted that since 2005, India's services exports have grown at a compound annual growth rate of nearly 11%, far outpacing global growth, especially in computers and professional consulting services, and are expected to reach 11% of India's GDP by 2030, an increase of 1.3 percentage points from 2023.
Industry/Concept
1. Computing power| According to the C114 communication network, China Mobile issued a bidding announcement for the procurement of new intelligent computing centers from 2024 to 2025 on the 18th, planning to purchase 7994 artificial intelligence servers and supporting products, and 60 Ethernet switches. Previously, China Telecom and China Unicom have started the purchase of AI servers, with the number of 4,175 and 2,503 respectively.
Comments: According to the analysis, from 2024 onwards, telecom operators' intelligent computing centers will be intensively put into use. In the process of building digital infrastructure ahead of time, the construction of intelligent computing centers has become a key direction for telecom operators. In addition to operators, bidding for domestic intelligent computing centers has also been gradually opened. Up to now, many cities in China have planned the construction of intelligent computing centers, and bidding for intelligent computing centers, finance and other fields has been continuously implemented.
2. Non-ferrous tungsten| According to Chinatungsten Online, the price of domestic tungsten products has continued to rise recently. On April 18, wolframite/scheelite concentrate rose by 1,000 yuan/ton compared with the previous day, and the latest quotation has risen to 13.3/132,000 yuan/ton, with a cumulative increase of 6,000 yuan/ton since April, and the latest price of tungsten powder has risen to 292 yuan/kg, a single-day increase of 1 yuan/kg, and an increase of 10 yuan/kg since April. In addition, ammonium paratungstate has risen by 7,000 yuan/ton since April, and the latest price is 190,000 yuan/ton.
Comments: The agency believes that under the background of total control, the mainland tungsten ore is facing problems such as declining grade and increasing cost. In addition, there is great uncertainty about the commissioning time of potential projects at home and abroad. At the same time, the demand for downstream photovoltaic tungsten wire and cemented carbide has grown steadily, and the contradiction between supply and demand of tungsten resources has become increasingly prominent.
3, Hongmeng| According to Jiemian News, at the Huawei analyst conference held on April 18, Huawei's rotating chairman Xu Zhijun said that building a HarmonyOS native application ecosystem is the most critical thing for Huawei in 2024, and the goal is to become the world's third largest mobile operating system. Huawei plans to fully migrate 5,000 apps that are used on smartphones in the Chinese market for more than 99% of the time to the HarmonyOS native operating system by 2024. At present, more than 4,000 applications have clarified migration plans, and less than 1,000 applications are in communication. It is expected that when the Mate70 is sold this year, it will be able to go on the market with pure-blooded Hongmeng.
Comments: Northeast Securities Research Institute believes that there are four main types of downstream partners of HarmonyOS: first, HMS cooperative enterprises, which jointly build a closed-source HMS service ecosystem with Huawei, are expected to benefit from the development of various businesses and get more shares; second, open source HarmonyOS code donors; third, industry commercial enterprises, whose business model is mainly to sell Licences or software and hardware integrated solutions; fourth, enterprises in the southbound hardware ecosystem, mainly HarmonyOS certification and adaptation of modules, development boards, and chips.
4、AIGC| The 14th Beijing International Film Festival will be held in Beijing from April 18 to 26, under the guidance of the National Film Administration, co-sponsored by China Central Radio and Television and the Beijing Municipal People's Government. In addition, according to the data of Lighthouse Professional Edition, as of April 17, 11 movies have been scheduled for the "May Day" file. Among them, 9 are domestic films and 2 are imported films.
Comments: Galaxy Securities believes that AIGC has been widely used in the whole process of film and television production, and continues to improve efficiency from the production and supply side. With the empowerment of AI, the film and television theater industry and content formats under the pro-cyclical recovery are expected to usher in new increments. Guotai Junan Securities believes that the volume and price of the film market will rise in March this year, and the "May Day" file is ready to wait. While benefiting from the increase in the total box office of Qingming files, cinema chains and ticketing platforms have also participated in the production and distribution of top films. Distributors of imported films will also benefit from the introduction of a large number of films into the mainland market.
5. Brain-computer| According to a report by Jiemian News on April 18, Intel recently released a large-scale neuromorphic system codenamed Hala Point. Hala Point is built on the Intel Loihi2 Neuromorphic Processor to support cutting-edge research in brain-inspired AI to address current AI challenges in terms of efficiency and sustainability. Building on Intel's first-generation large-scale research system, Pohoiki Springs, Hala Point has improved its architecture to increase neuronal capacity by more than 10x and performance by 12x.
Comments: According to the analysis, the scale of deep learning models is constantly expanding, and the number of parameters can reach trillions. This trend means that AI technology faces serious challenges in terms of sustainability, and it is necessary to explore the innovation at the bottom of the hardware architecture. Neuromorphic computing is a new computational method that draws on neuroscience research, which greatly reduces data transmission through the integration of storage and computing and high-fine-grained parallel computing. As Intel's first neuromorphic system with 1.15 billion neurons, Hala Point paves the way for more efficient and scaled AI.
6. Medical devices According to a report by CCTV on April 18, the "National New Generation Artificial Intelligence Open Innovation Platform for Medical Imaging", which took three years to build, has officially passed the comprehensive performance evaluation of the High-tech Research and Development Center of the Ministry of Science and Technology, marking that the mainland's medical imaging AI has achieved a full-link connection from "laboratory" scientific research to "hospital" clinical application.
Comments: At present, relying on Tencent Cloud's technology, the "National New Generation of Artificial Intelligence Open Innovation Platform for Medical Imaging" has built a SaaS service platform that supports multi-modality and multi-disease, and supports the whole process of medical AI R&D functions such as storage, statistics, annotation, AI model training, and verification of medical imaging data. After completion, the "National New Generation Artificial Intelligence Open Innovation Platform for Medical Imaging" integrates innovative infrastructure, cutting-edge research results, talents and other innovative elements, which will play a leading role in scientific and technological innovation, activate new productivity in the field of medical imaging, and promote the high-quality development of medical and health undertakings.
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