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Market Overview
The threat of stagflation and the hawkishness of senior Federal Reserve officials suppressed U.S. stocks, the S&P turned down many times in the short term, the Nasdaq fell, the Dow still rose for eight consecutive days, and the Dow rose more than 2% for the week, the largest weekly rise in nearly five months. Tesla closed down 2%, making it a four-day losing streak. AI concept stock SoundHound rose more than 7% after its earnings report. Novavax almost doubled. Oklo, the first share of nuclear fission, fell nearly 54% on the first day of listing.
The pan-European stock index rose 3% for the week to record the biggest gain in three months, German, French and British stocks all hit record highs, and Infineon rose 20% for the weekly earnings week.
Treasury yields accelerated their recovery after Fed officials' speeches, with two-year yields hitting a one-week high. The U.S. dollar index jumped intraday after the release of Michigan inflation expectations.
Crude oil fell more than 2% intraday, falling from the high of this month, and U.S. oil still rebounded throughout the week. Gold closed at a three-week high, up nearly 3% for the week. London copper rose 1% to $10,000, and London fell 1.5% and still rebounded throughout the week. Bitcoin fell more than $3,000 intraday, approaching $60,000.
In the Chinese market, during the U.S. stock market, the Chinese concept stock index fell, JinkoSolar fell more than 9%, Xpeng Motors fell more than 5%, Weilai fell nearly 5%, Zeekr rose nearly 40% intraday, and TSMC's U.S. stocks, whose sales soared in April, rose 4.5%; The offshore yuan fell more than 100 points intraday to 7.23, approaching a one-week low. The Shanghai Composite Index fluctuated and consolidated and closed up slightly, the Hang Seng Index outperformed the S&P 500 during the year, and the real estate sector exploded.
News
The People's Bank of China's first-quarter monetary policy implementation report: long-term bond yields will better match the future economic upswing; Market investors pay more attention to the interest rate risk of long-term bond investment to prevent losses caused by overly short-term investment behavior. The slowdown in total credit to single digits does not mean that financial support for the real economy has weakened.
Smoothly promote the review of issuance and listing, and the Shanghai and Shenzhen Stock Exchanges plan to review the issuance and listing applications of the two companies on May 16.
National Data Bureau: It will accelerate the upgrading and deployment of digital infrastructure, and accelerate the construction of digital infrastructure such as industrial Internet, computing power, and mobile Internet of Things; Thoroughly implement the "Data Element ×" action plan, and encourage multiple entities to actively participate in the development and utilization of data elements.
Fed Governor Bowman hawkish: I don't think there's a reason to cut interest rates this year. ECB April meeting minutes: ready for a rate cut in June.
U.S. Michigan consumer confidence unexpectedly plummeted in May, and short-term inflation expectations soared.
OpenAI: GPT-5 will not be released next Monday, nor will it release an AI search engine.
Novavax and Sanofi reached a $1.2 billion vaccine licensing agreement, and shares closed up nearly 99%.
The market closes
U.S. stocks: The Dow rose 0.32%, the S&P 500 rose 0.16%, and the Nasdaq fell 0.03%.
European stocks: The European STOXX 600 index closed up 0.77%, hitting a record closing high for four consecutive trading days and up 3.01% for the week. Germany's DAX 30 index closed up 0.46%. France's CAC 40 index closed up 0.38%. Britain's FTSE 100 index closed up 0.63%.
A-shares: The Shanghai Composite Index rose 0.01%, the Shenzhen Component Index fell 0.58%, and the ChiNext Index rose and fell 1.15%.
Bond market: The yield on the benchmark 10-year U.S. Treasury note rose 4.72 basis points to 4.5003%, down 0.74 basis points for the week. The two-year Treasury yield rose 5.01 basis points to a new daily high of 4.8655%, up 4.95 basis points for the week.
Commodities: WTI crude oil futures for June delivery closed down $1.00, or 1.26%, at $78.26 a barrel, up 0.19% for the week. Brent crude oil futures for July delivery closed down $1.09, or 1.30%, at $82.79 a barrel, down 0.20% for the week. COMEX gold futures for June delivery closed up 1.48% at $2,375 an ounce. London tin, London aluminum, and London copper closed down at least more than 1% on Friday, and London copper rose by more than 0.9% and London nickel fell by about 1.5% throughout the week.
Highlights
Domestic macro
The People's Bank of China's first-quarter monetary policy implementation report: the supply and demand of the bond market are expected to further balance, and the yield of long-term bonds will better match the future economic momentum.
- The central bank pointed out that the yield on mainland long-term bonds is generally effective in reflecting market expectations and the macroeconomy. Market investors pay more attention to the interest rate risk of long-term bond investment to prevent losses caused by too short-term investment behavior. This year, the intensity of the proactive fiscal policy is relatively large, and the scale of government bonds planned to be issued is not small, and the pace of issuance will be accelerated. The slowdown in total credit to single digits does not mean that financial support for the real economy has weakened.
- Verbatim comparison, what new signals are released by the first quarter monetary policy implementation report? The central bank recently proposed that it will promote the steady decline of corporate financing and household credit costs, provide effective support for key areas and weak links such as inclusive finance, scientific and technological innovation, and green development, give full play to the decisive role of the market in the formation of exchange rates, and resolutely correct pro-cyclical behavior.
Smoothly promote the review of issuance and listing, and the Shanghai and Shenzhen Stock Exchanges plan to review the issuance and listing applications of the two companies on May 16. According to the Shanghai Securities News, on May 10, the Shanghai and Shenzhen Stock Exchanges issued an announcement on the review meeting of the listing committee, intending to review the company's application for issuance and listing on May 16. Among them, 1 Shenzhen IPO issuance and listing application was reviewed, and 1 Shanghai stock exchange refinancing application was reviewed. Since the release of the "827" policy on tightening the pace of IPOs last year, the number of companies submitting registration and obtaining registration approvals on the Shanghai and Shenzhen stock exchanges has remained stable overall. At the same time, due to multiple factors, the number of projects submitted to the Listing Committee for review decreased year-on-year.
National Data Bureau: It will accelerate the upgrading and deployment of digital infrastructure, and accelerate the construction of digital infrastructure such as industrial Internet, computing power, and mobile Internet of Things; Thoroughly implement the "Data Element ×" action plan, and encourage multiple entities to actively participate in the development and utilization of data elements.
Domestic companies/industries
The largest Chinese IPO in the past three years: the fastest listed new energy vehicle company Zeekr made a brilliant debut, once rising nearly 40%. ZEEKR issued 21 million shares, an increase of 20% over the plan, and the issue price was at the top of the guidance range, raising $440 million, which is said to be nearly five times oversubscribed. Shares closed up 34.6% to market capitalization of $7.16 billion at the highest intraday price, still below the $13 billion valuation after the funding round a year ago.
Passenger Car Association: Retail sales of passenger cars in April decreased by 5.7% year-on-year, and retail sales of new energy vehicles increased by 28.3% year-on-year. Looking ahead, the Federation of Passenger Cars expects that the car trade-in subsidy will bring millions of increments to private new car consumption in the auto market, and can also bring more than 100 billion yuan of annual consumption increments, and the auto market is expected to sweep away the downturn in May to achieve restorative growth.
AI-driven chip recovery spreads, and TSMC's sales in April increased by 60% year-on-year. While the demand for AI continues to grow, the consumer electronics market is beginning to recover.
From the pricing of Deepseek-V2, we can see the new trend of cost reduction for large models. Huafu Securities believes that the continuous decline in the pricing of large models is expected to bring faster commercialization, which will in turn derive more demand for fine-tuning and reasoning, and will gradually revitalize the development of domestic AI applications and domestic computing power.
Hangzhou canceled the purchase restriction, and some sellers jumped by three percent, and the stock prices of local listed real estate companies rose. Some sellers have increased the price of the property by 30%, and the intermediary said that this kind of sudden increase in the listing price of the customer is not actually for the real sell-off, but for the new purchase of a loan according to the first set of identification.
On-site investigation of Ruifengda's assets: The Shanghai office has been seized, and the public security organs are investigating and collecting evidence. Previously, it was rumored that Ruifengda had run away, and the company's products had been confirmed to be unredeemable. Ruifengda's management scale exceeds 3 billion yuan, and the company's product income is 20% annualized with no drawdown.
Overseas macro
Fed Governor Bowman hawkish: I don't think there's a reason to cut interest rates this year. Bowman believes that it is not appropriate for the Fed to cut interest rates in 2024, noting that there are persistent pressures on US inflation in the first few months of the year. She urged Fed policymakers to proceed cautiously and carefully as they move toward their 2% inflation target.
U.S. Michigan consumer confidence unexpectedly plummeted in May, and short-term inflation expectations soared. In the United States, the University of Michigan consumer confidence unexpectedly fell sharply short of expectations in May, and the extent of the missed expectations hit a record high, plummeting from April, and the largest monthly decline since August 2021. Consumers' short-term inflation expectations have risen sharply, as have their long-term inflation expectations. Fears about inflation and the job market have led to a sharp drop in confidence.
ECB April meeting minutes: ready for a rate cut in June. The minutes showed that most people don't think there will be a single one-off rate cut in June. The market is currently pricing in up to three rate cuts this year, or two after June, most likely in September and December.
UK GDP grew by 0.6% quarter-on-quarter in the first quarter, the highest in two and a half years. UK GDP grew 0.2% year-on-year in the first quarter, up from -0.2% in the previous quarter. The Bank of England is expected to start a cycle of interest rate cuts in June.
Modi's election came in lower than expected, and Indian stocks fell below key support levels. Low turnout could lead to the BJP gaining fewer seats than expected, which could create obstacles to Modi's follow-up policies.
100 years of global central bank gold purchases: the current situation is far from 1990 levels. Huatai Securities pointed out that although global central bank gold purchases have increased after 2008 and accelerated significantly after 2022, from a long-term perspective, the proportion of gold in global reserves is still at a historical low. Even if gold reserves continue to increase at the rate since 2022, the share of gold in central bank reserves will still have to climb for more than a decade before it returns to 1990 levels.
The UN General Assembly resolution affirmed Palestine's membership in the UN Charter and recommended that the Security Council reconsider Palestine's application for membership in the UN Charter.
Overseas companies
OpenAI: GPT-5 will not be released next Monday, nor will it release an AI search engine. Sam Altman's announcement took the market by surprise once again. It was reported yesterday that OpenAI plans to announce its AI-based search product next Monday, May 13. The earliest revelation was made by OpenAI on Thursday, a few days ago that it was postponed, and now it looks like it's been postponed again. On May 14, Google will hold its annual "Google I/O" conference, and OpenAI still did not "run ahead" of Google in the end.
Novavax and Sanofi reached a $1.2 billion vaccine licensing agreement, and shares closed up nearly 99%. The two companies will jointly commercialize Novavax Pharmaceutical's COVID-19 vaccine and jointly develop a combination vaccine against coronavirus and influenza starting next year.
Jim Simons, a quantitative investor and founder of the Renaissance Fund, passed away at the age of 86. Simmons founded the hedge fund Renaissance Technologies in 1978, pioneering quantitative trading and becoming one of the most profitable investment firms in history.
Today's news preview
China's April CPI, PPI.
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