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Market Overview
The S&P Nasdaq stopped three consecutive gains, but closed more than half of its early losses, and the Dow fell for two in a row. After the earnings report, IBM closed down more than 8%, Caterpillar fell 7%, and Meta fell 10%, the biggest decline in two years. Tesla rose 5%. The chip stock index closed up 2%, rising for four consecutive days, and Nvidia closed up nearly 4% after falling nearly 2% at the beginning of the session.
In the after-hours earnings report of the U.S. stocks, Google once soared 15%, Microsoft once rose more than 5%, and Intel fell 9% after hours.
U.S. GDP and core PCE price data hit interest rate cut expectations hard, and U.S. Treasury yields rose more than 10 basis points intraday to a five-month high. The U.S. dollar index, which hit a new low in nearly two weeks, once turned higher. The yen hit a new low since 1990 for four consecutive days.
Crude oil turned lower after GDP, and then rebounded by more than 1%, closing at a new high in more than a week. After GDP, gold turned down, and then rose by more than 1%. Lunxi rebounded by more than 3%, and London copper rose twice in a row to a nearly two-year high. Bitcoin rebounded more than $2,000 intraday to regain the $65,000 mark.
In the Chinese market, during the U.S. stock market, the Chinese concept stock index turned up intraday and outperformed the market for four days, JD.com rose more than 1%, Li Auto fell nearly 2%, and the offshore yuan rebounded 200 points intraday to break 7.26. The three major A-share indexes closed mixed, chemical stocks collectively rose, and the Hang Seng Index recorded four consecutive positives.
News
Report of the State Council: Timely and reasonable adjustment of the proportion of state-owned financial capital in banking, insurance, securities and other industries.
The preliminary real GDP of the United States in the first quarter was 1.6%, the lowest in two years, and the core PCE price accelerated for the first time in a year.
Report: The Bank of Japan will consider tapering its purchases of Japanese government bonds on Friday. The Asian currency war continued, with the yen falling below the 155 mark and the exchange rate continuing to fall after Indonesia unexpectedly raised interest rates.
Google paid dividends for the first time in history, and its revenue, advertising, and cloud revenue all accelerated in the first quarter, and once soared 15% to a new high after hours. AI helped Microsoft's first-quarter earnings report exceed expectations, and cloud revenue accelerated growth, rising more than 5% after hours. Intel's second-quarter profit and revenue guidance was poor, falling 9% after hours.
Apple joined the open source war and officially announced the small model OpenELM on the end side, with parameters of 270 million to 3 billion, and an M2 Mac can run.
The market closes
U.S. stocks: The Dow fell 0.98%, the S&P 500 fell 0.46%, and the Nasdaq fell 0.64%.
European stocks: Europe's STOXX 600 index closed down 0.64%. Germany's DAX 30 index closed down 0.95%. France's CAC 40 index closed down 0.93%. Britain's FTSE 100 index closed up 0.48%.
A-shares: The Shanghai Composite Index rose 0.27%, the Shenzhen Component Index rose 0.14%, and the ChiNext Index fell 0.04%.
Bond market: The yield on the benchmark 10-year US Treasury rose 5.81 basis points to 4.6998%. The yield on the two-year Treasury note rose 6.44 basis points to 4.9913%.
Commodities: WTI crude oil futures for June delivery closed up $0.76, or 0.92%, at $83.57 a barrel. Brent crude oil futures for June delivery closed up $0.99, or 1.12%, at $89.01 a barrel. COMEX gold futures rose 0.27% to $2,344.60 an ounce. Lunxi rose more than 3.2%.
Highlights
Domestic macro
Report of the State Council: Timely and reasonable adjustment of the proportion of state-owned financial capital in banking, insurance, securities and other industries. Concentrate on building a "national team" in the financial industry. We will further optimize the distribution of state-owned financial capital, rationally adjust the proportion of state-owned financial capital in various financial industries, deepen the reform of policy-based financial institutions, increase the supply of policy-based finance, and promote the differentiated development of state-owned financial enterprises.
The heads of relevant departments and bureaus of the State Administration of Financial Supervision and Administration answered reporters' questions on the issuance of the "Guiding Opinions on Promoting the High-quality Development of Green Insurance". The "Guiding Opinions" put forward three key tasks from the investment side, involving improving the green investment management system, strengthening the green development support of insurance funds, and strengthening the management of green investment processes, aiming to strengthen the green investment support of insurance funds.
Expert interpretation: The European Parliament passed the so-called "Law on Products Prohibited from Forced Labor". The European Parliament approved a bill on the 23rd prohibiting the sale, import and export of goods made with forced labor in the EU market, experts believe that the bill will bring many negative impacts on Sino-European economic and trade relations, and seriously hinder the normal trade and investment exchanges between China and the EU.
Blinken raised concerns about China's so-called "non-market economic behavior" in Shanghai, and Wang Wenbin responded in principle. Wang Wenbin responded that China has always carried out economic and trade cooperation in accordance with market principles, firmly supported the multilateral trading system, and fully implemented WTO rules. We hope that the US side will earnestly respect the principle of fair competition, abide by WTO rules, work with China in the same direction, and create favorable conditions for the sound and steady development of China-US economic and trade relations.
Domestic companies
After a four-year absence, the 2024 Beijing Auto Show opens on Thursday: more than 200 new energy vehicles will be exhibited, Xiaomi and Huawei will face off on the same stage, luxury brands will launch a number of first cars, and joint venture brands will accelerate their offensive.
Lei Jun: The past 28 days have been like a dream, and Xiaomi Auto has launched the international market three years later. Lei Jun said that the sales situation of Xiaomi cars is particularly good, so good that you can't believe it.
ZTE's net profit in the first quarter was 2.74 billion yuan, an increase of 3.7% year-on-year, revenue increased by 3.7% year-on-year, and net cash flow increased significantly by 28.2%.
AMEC's Q1 revenue increased by 31% year-on-year, net profit decreased by 9.5% year-on-year, and the new shipment volume of etched products increased significantly.
As the market recovered, a number of memory chip companies disclosed their quarterly reports, and most of them achieved double growth in revenue and profit, and Montage Technology's net profit increased by more than 10 times year-on-year.
Overseas macro
The preliminary real GDP of the United States in the first quarter was 1.6%, the lowest in two years, and the core PCE price accelerated for the first time in a year;
- After the release of the data, the market expects the Fed's first interest rate cut to be postponed to December, and the Fed will only cut interest rates by about 35 basis points in 2024, much lower than the forecast at the beginning of the year.
- Nick Timiraos, a well-known financial journalist, wrote that the report on US economic activity released on Thursday brought the latest unpleasant wake-up call for investors and Fed policymakers. Recent inflation trends in the U.S. have led investors and Fed officials to reconsider whether it is appropriate to cut interest rates this year. The latest series of reports has reignited fears that it will be more challenging to pull inflation back to the so-called "last mile" of 2% completely.
The U.S. Treasury's seven-year U.S. Treasury auction bid rate jumped, and overseas demand weakened. However, there were some bright spots in the auction, including strong domestic demand and the third consecutive U.S. Treasury auction with no tail spreads reflecting weak demand.
Reporting: The SEC is expected to reject the approval of spot Ethereum ETFs next month. According to people familiar with the matter, the lackluster performance of SEC personnel at the negotiation meeting was interpreted as a signal that the application may be denied. Ether was $50 lower in the short term, at $3,103.6.
Report: The Bank of Japan will consider tapering its purchases of Japanese government bonds on Friday. The move, if implemented, could reduce the amount of Japanese government bonds held by the BOJ, thus starting a new phase of quantitative tightening. U.S. Treasury Secretary Janet Yellen, when asked about her thoughts on Japan's possible steps to respond to the yen's depreciation against the dollar, said U.S. Treasury Secretary Janet Yellen said intervention should only happen in extremely rare circumstances, according to news on Thursday.
Asian currency war continues: Asia-Pacific stock markets fell in early trading, the yen fell below the 155 mark, and the exchange rate continued to fall after Indonesia unexpectedly raised interest rates. The rupiah has suffered a depreciation storm, and the Bank of Indonesia unexpectedly raised interest rates by 25 basis points to stabilize the exchange rate, but analysts have generally questioned the effectiveness of the move, and the trend of the rupiah will still depend on the Fed's interest rate cut expectations on the one hand, and on the other hand, whether it can attract foreign capital inflows will also be the key to determining the rupiah.
South Korea's GDP grew by 3.4% in the first quarter, beating expectations, with strong exports and construction investment. South Korea's economic growth momentum began to spread from exports to other sectors, with investment in public works and construction becoming key growth factors.
Overseas companies
Google paid dividends for the first time in history, and its revenue, advertising, and cloud revenue all accelerated in the first quarter, and once soared 15% to a new high after hours. Google's revenue grew fastest in two years in the first quarter, profits surged by 60%, and it bet on $12 billion in capital expenditures on AI. Cloud growth re-accelerated to a high of 28% at the beginning of last year, with operating profit quadrupling and ad revenue improving steadily. The company also paid its first-ever quarterly dividend and will repurchase up to $70 billion in additional shares.
AI helped Microsoft's first-quarter earnings report exceed expectations, and cloud revenue accelerated growth, rising more than 5% after hours. This is the first full quarterly earnings report after the launch of Copilot's generative AI assistant, which not only increased Microsoft's profit by 20% year-on-year and also increased slightly quarter-on-quarter, but also accelerated the growth of Azure cloud revenue by 31%, and contributed to the cloud revenue growth of 7 percentage points, which is welcomed by Wall Street. CEO Nadella said that he has been integrating the artificial intelligence technology of his partner OpenAI into Microsoft's entire product line.
Intel's second-quarter profit and revenue guidance was poor, and the recovery was weak, and it fell 9% after hours.
Apple joined the open source war and officially announced the small model OpenELM on the end side, with parameters of 270 million to 3 billion, and an M2 Mac can run. First Llama 3, then to Microsoft Phi-3, and then to Apple's release of OpenELM - four different small parameter versions are all online, and the analysis says that we are not far from the iPhone being installed in the large model.
Another "Internet celebrity AI hardware" is about to see the light, Rabbit R1 is on sale, the first wave of feedback: it can be used, better than AI Pin. Some netizens directly commented: This is the iPhone moment in the AI era.
The world's largest open-source model has exploded the record again, with 480 billion parameter MoE beating Llama 3 and Mixtral. The main thing is a cost-effective model, with several times less training overhead than others, you can get a model with similar performance.
Industry/Concept
1. Low-altitude economy According to Jiemian News, on April 25, at the 2024 Beijing Auto Show, it was learned from the Xpeng Motors booth that the Xpeng Huitian "Land Aircraft Carrier" split flying car will be pre-sold in the fourth quarter of 2024, and the new brand MONA will be officially launched in June. Xpeng Huitian currently has two flying cars, one is a split flying car and the other is a land-air integrated flying car. In addition to Xpeng Huitian, EHang, GAC, Geely Automobile's Wofei Changkong and other companies are accelerating the layout of flying cars.
Comments: Analysts pointed out that this year's government work report proposed to "actively build new growth engines such as biomanufacturing, commercial aerospace, and low-altitude economy", which is the first time that "low-altitude economy" has been written into the government work report, and this year is expected to become the first year of low-altitude economic development. According to the forecast in the "National Three-dimensional Transportation Network Planning Outline", the industrial scale of the national low-altitude economy will reach more than 6 trillion yuan in 2035. At present, Anhui, Guangdong, Jiangsu and other places have introduced relevant policies to support the development of low-altitude economy, focusing on practical application scenarios (logistics, fire protection, etc.) and airspace management to accelerate the landing, multi-field commercial operation prospects are clear, corresponding to industry-level UAVs, eVTOL and other models will usher in volume one after another.
2. Diamond| According to IT House, the materials science team from the Korea Institute of Basic Science recently published an article in the journal Nature, announcing the successful realization of diamond synthesis at standard atmospheric pressure and 1025 °C. It is reported that the experimental team successfully formed diamond without the use of high pressure and crystal seeding by exposing a mixture of liquid gallium, iron, nickel and silicon to a methane-hydrogen mixture atmosphere and heating it to 1,025°C through a reaction device. This preparation method is expected to open up a lower cost path for the production of diamond films.
Comments: Analysts pointed out that diamond is not only a gemstone, but also an excellent semiconductor material, with an ultra-wide bandgap gap, which is more suitable for high-temperature, high-radiation, and high-voltage environments than materials such as silicon that are now commercially available. Under the conventional route, synthetic diamond requires a high-temperature, high-pressure environment and expensive manufacturing equipment costs. If the latest scientific research results of atmospheric pressure synthesis technology can be successfully promoted to a larger scale, it will open up a more economical and easier way to prepare diamond thin films, which is expected to provide a strong boost for the development of quantum computers and power semiconductors.
3. Green building materials According to CCTV, recently, the Ministry of Industry and Information Technology, the Ministry of Housing and Urban-Rural Development, the Ministry of Agriculture and Rural Affairs, the Ministry of Commerce, the State Administration for Market Regulation, and the National Rural Revitalization Administration jointly issued a notice to fully deploy and carry out green building materials to the countryside to further promote the green development of rural areas and accelerate the promotion and application of energy-saving, low-carbon, safe and cost-effective green building materials in the countryside. The event aims to promote the active participation of green building materials production enterprises, e-commerce platforms, stores and shopping malls through the combination of government guidance and market leadership, provide more green, environmentally friendly and efficient building materials products for rural areas, and help the revitalization of rural industries and the improvement of the ecological environment.
Comments: Media reports pointed out that the development of green building materials to the countryside is not only conducive to promoting the achievement of the "double carbon" goal, reducing carbon emissions in rural areas, and promoting the construction of ecological civilization, but also conducive to building a new development pattern of "dual circulation", stimulating the potential of rural consumption, promoting rural industrial upgrading, and improving the supply quality and demand level of the domestic market. At the same time, through the promotion of green building materials, it can also improve the quality and safety of rural buildings, improve the living conditions of rural residents, and help the construction of Hemei Village.
4. Brain-computer| According to The Paper, a small film with soft filaments is implanted in the skull, and the monkey with his hands tied can control the robotic arm and grasp the "strawberry" with only his "mind". This is the scene of the 2024 Zhongguancun Forum on April 25. The "Beibrain No. 2", independently developed by mainland scientists, fills the gap of high-performance invasive brain-computer interface technology in China, and realizes the dexterous brain control of two-dimensional motion cursors by macaques for the first time in the world.
Comments: Media reports pointed out that brain-computer interface is the "information highway" for the brain to communicate with external devices, and it is the cutting-edge technology of a new generation of human-computer interaction and human-computer hybrid intelligence. In January 2024, seven departments including the Ministry of Industry and Information Technology issued the "Implementation Opinions on Promoting the Innovation and Development of Future Industries", making breakthroughs in key technologies and core devices such as brain-computer fusion, brain-like chips, and brain computing neural models, developing a batch of easy-to-use and safe brain-computer interface products, and encouraging the exploration of applications in typical fields such as medical rehabilitation, unmanned driving, and virtual reality. According to a McKinsey report, the global market size of brain-computer interfaces from 2030 to 2040 is likely to be between $70 billion and $200 billion per year.
5. Household appliances According to the Shanghai Securities News, on April 25, the spokesman of the Ministry of Commerce said that the promotion of consumer goods to trade in the old for the new as the focus of the current work to promote consumption, and guide all localities to combine brand activities, key exhibitions, industrial clusters and leading enterprises and other advantageous resources to carry out a series of activities of "national consumer goods with a one-day new action and a local station". The Ministry of Commerce has successively supported Hainan, Ningxia, Shandong, Guangdong and other places to launch local station activities. Jilin, Shanghai, Guangxi, Jiangxi and other local station activities will be launched around the "May Day".
Comments: Guotai Junan Research Institute pointed out that since the beginning of 2024, the overall growth of home wire sales has been good, and the sales of major electrical appliances such as air conditioners, refrigerators, and color TVs have increased by 33%, 19%, and 25% year-on-year respectively. After the introduction of the last round of nationwide stimulus policies, the main sales of household appliances have entered a general replacement cycle, and the implementation of national policies is expected to form a joint force to better drive the willingness of the vast market (rural areas and third- and fourth-tier cities) to renew. Leading enterprises with multi-category and multi-brand layout are more likely to gain market share.
6. Computing power| According to the Shanghai Securities News, on April 25, the Beijing Municipal Bureau of Economy and Information Technology and the Beijing Municipal Communications Administration jointly issued the "Implementation Plan for the Construction of Computing Power Infrastructure in Beijing (2024-2027)". Among them, it is proposed to focus on the construction of a number of large clusters of intelligent computing, and by 2025, the city's intelligent computing supply scale will reach 45EFLOPS, and by 2027, the full-stack independent and controllable software and hardware products of intelligent computing infrastructure will be realized, and the construction capacity of 100% independent and controllable intelligent computing centers will be realized.
Comments: Galaxy Securities Research Institute believes that the mainland has proposed to build digital infrastructure and AI+ development in advance, and cooperate with the "artificial intelligence +" action, which may become an important step for AI to empower thousands of industries in the future. The construction of the intelligent computing center of the computing power industry chain will maintain a high degree of prosperity and drive the rapid increase in the market scale of the optical module industry chain. The IDC industry chain, optical communication industry chain, and temperature control industry chain will become the key directions of future infrastructure construction.
Today's news preview
Kweichow Moutai, Wuliangye, Mindray Medical, Muyuan Shares, CITIC Securities, Zhongzhi Shares, Weir Shares, and Sany Heavy Industry announced their financial reports.
The Bank of Japan announced its interest rate decision, and Governor Kazuo Ueda held a press conference.
Japan Tokyo CPI in April.
U.S. personal income, spending for March, core PCE price index.
U.S. University of Michigan consumer confidence in April.
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