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Market Overview
The Dow ended its eight-day winning streak, the S&P edged lower, and the Nasdaq rebounded to a one-month high. Tesla closed up 2%, halting a four-day losing streak. Google turned higher after falling nearly 3% at the beginning of the session. The chip stock index and Nvidia rose twice in a row, and Arm rose 7.7%. The game station once soared nearly 120% and closed up more than 74%. German, French and British stocks fell to record highs, with Maersk up 7.7%.
U.S. Treasury yields pared most of their losses after U.S. consumer inflation expectations, the U.S. dollar index narrowed more than half of its losses, and the yen hit a new low in more than a week.
Crude oil rebounded, up more than 1% intraday, and cloth oil bid farewell to more than seven week lows. Gold fell to a three-week closing high, closing down nearly 1.4%, its biggest drop in the month. London copper rose more than 1%, hitting a two-year high, and London zinc rose more than 2%, rising to a 14-month high for three consecutive years.
In the Chinese market, during the U.S. stock market, the Chinese concept stock index rose nearly 4%, rebounding to an eight-month high, Zeekr and Weilai both rose more than 10% intraday, Station B closed up more than 10%, and Ali rose nearly 6%; The offshore yuan fell more than 100 points to 7.24. The Shanghai Composite Index fluctuated and adjusted, treasury bond futures collectively strengthened, Hong Kong stocks opened low and went high, the Hang Seng Index regained 19,000 points, and Ali rose more than 4%.
News
The Ministry of Finance announced the issuance arrangement of ultra-long-term special treasury bonds, and the first phase of 40 billion yuan is planned to be tendered on Friday with a term of 30 years; Li Qiang: Issue and make good use of ultra-long-term special treasury bonds, and do a good job in supporting the "two-fold" construction with high quality.
The People's Bank of China: support the further optimization of the "Swap Connect" mechanism.
Fed Survey: Consumer inflation expectations have risen significantly, outlook for the labor market and financial conditions has deteriorated.
Morgan Stanley also shouted: US CPI on Wednesday will be "significantly lower than expected".
OpenAI launched a new flagship model, GPT-4o, which can be handled by AI in graphic and audio mobile phones, and the human-like speed is ultra-fast and responsive.
The game station once soared 120% intraday and closed up more than 74%, setting the best one-day performance since 2021. The speculation of Gill's comeback drove a group of retail investors to hold concept stocks higher.
The market closes
U.S. stocks: The Dow fell 0.21%, the S&P 500 fell 0.02%, and the Nasdaq rose 0.29%.
European stocks: Europe's STOXX 600 index closed up 0.02%. Germany's DAX 30 index closed down 0.16%. France's CAC 40 index closed down 0.12%. Britain's FTSE 100 index closed down 0.22%.
A-shares: The Shanghai Composite Index fell 0.21%, the Shenzhen Component Index fell 0.6%, and the ChiNext fell 0.95%.
Bond market: The yield on the benchmark US 10-year Treasury fell 1.18 basis points to 4.4845%. The yield on the two-year Treasury note fell 0.64 basis points to 4.8591%.
Commodities: WTI crude oil futures for June delivery closed up $0.86, or 1.10%, at $79.12 a barrel. Brent crude oil futures for July delivery closed up $0.57, or 0.69%, at $82.79 a barrel. COMEX gold futures closed down 1.04% at $2,369.1 an ounce. London tin and London zinc closed up at least about 2.3%, and London copper, London lead, and London nickel rose more than 1%.
Highlights
Domestic macro
The Ministry of Finance announced the issuance arrangement of ultra-long-term special treasury bonds, and the first phase of 40 billion yuan is planned to be tendered on Friday with a term of 30 years; Li Qiang: Issue and make good use of ultra-long-term special treasury bonds, and do a good job in supporting the "two-fold" construction with high quality.
- In 2024, the ultra-long-term special treasury bonds will be issued in 20-year, 30-year, and 50-year varieties, and will be issued in mid-to-late May. The 1 trillion yuan of ultra-long-term special treasury bonds issued this year will not be included in the deficit. Huatai Securities pointed out that from the perspective of experience, the previous market-oriented issuance of special treasury bonds will inevitably cause certain disturbances to the bond market, and the magnitude mainly depends on the coordination of monetary policy.
- The first tranche of 40 billion yuan is to be tendered on Friday, with a term of 30 years, and the current treasury bonds will start to accrue interest on May 20, 2024, and the interest will be paid semi-annually, and the interest payment date will be May 20 and November 20 each year, and the principal will be repaid and the last interest will be paid on May 20, 2054.
- Li Qiang stressed that the issuance of ultra-long-term special treasury bonds to support the "two-fold" construction is a major decision made by the CPC Central Committee with a view to the overall situation of building a strong country and national rejuvenation, and is an important starting point for promoting Chinese-style modernization, promoting high-quality development, and grasping the initiative in development.
- How do special government bonds affect the rhythm of supply throughout the year? Huachuang Fixed Income believes that the pace of supply of special treasury bonds is slower than expected, the supply progress in the first half of the year is slow, and the pressure in the third quarter may be greater. The trend of government bond supply in May has not changed, and the fourth week may usher in an increase.
The People's Bank of China: support the further optimization of the "Swap Connect" mechanism. The first is to enrich product types and launch interest rate swap contracts with the settlement date of the international money market as the payment cycle; The second is to improve the supporting functions, and launch contract compression services and supporting historical value contracts.
The "combination of punches" in Hangzhou and Nanjing policies has achieved obvious results, with a large increase in foreign property customers, rising housing prices, and a new round of housing buying fever is also coming. CRIC report pointed out that looking forward to the market outlook in May, the intensive introduction of policies, and the continuous fermentation of the "old for new" heat, the heat of the Nanjing market may continue. With the stimulus of the 5.9 New Deal, the decline of the Hangzhou market may be improved, and the transaction is expected to rise in May.
CITIC Securities: If the Hong Kong Stock Connect dividend tax is adjusted, it is conducive to tax fairness, but there are still uncertainties.
- CITIC Securities pointed out that the theoretical upper limit of dividend and dividend tax for Hong Kong Stock Connect investors is 20%, but due to the obstacles of listed companies in penetrating share holders, it is difficult for individual investors to obtain withholding certificates, and the actual implementation tax rate is 20-28%. Moreover, considering that the tax policy involves cross-regional and cross-departmental coordination, it is theoretically difficult to implement the policy.
- How much impact does dividend tax have on the discount of Hong Kong stocks? Huatai Securities said that using the AH premium of 143 on May 8, 2024 as a benchmark, the AH premium without the impact of dividend tax is estimated to be about 138, corresponding to a valuation impact of 4% on high-dividend H shares.
Domestic companies
"Microsoft-OpenAI" model: China's "AI unicorns" have been voted over, and Alibaba is the largest financier of China's AI. Alibaba uses today's cash and cloud computing capabilities to invest in the future transformation scene, which can be regarded as buying insurance for its future.
Kai-Fu Lee: Zero One Things is close to profitability, and the goal is to make AI more affordable. Kai-Fu Lee believes that AI applications will explode in 2024. Last week, Zero One Everything launched the TOC AI platform "Know", which has similar features to Microsoft's Office 365 Copilot.
Overseas macro
Fed Survey: Consumer inflation expectations have risen significantly, outlook for the labor market and financial conditions has deteriorated. People's expectations for 1-year inflation came in at 3.3%, the highest since November, after hovering around 3% for the previous four months; Longer-term inflation expectations and house price growth expectations have also climbed. At the same time, respondents were also unconfident in their ability to find a new job after losing their current job, falling to a three-year low. The percentage of consumers who expect to be unable to repay their minimum debt in the next three months is the highest since the pandemic.
Morgan Stanley also shouted: US CPI on Wednesday will be "significantly lower than expected". Morgan Stanley believes that the current rental data is very weak, and despite the surge in immigration last year, the vacancy rate for multi-family apartments is approaching record highs, and housing inflation has sent a downward signal.
High interest rates in Europe and the United States may last longer, economists: There are five major factors for the long-term neutral interest rate to rise. According to the analysis, the five major factors of large fiscal deficits, aging populations, climate change, the prospects for artificial intelligence development, and growing geopolitical risks may keep long-term interest rates high to some extent.
European line container shipping futures hit a new high. On May 13, the main contract of the European line container transportation index accelerated its rise, up more than 14%, and stood at 4,000 points, a new high since its listing, and the forward contracts 2410, 2412 and 2502 contracts were all closed intraday. Since March, the European line container transportation index has continued to rise, with a cumulative increase of 135.53%. Shipping OPEC, take advantage of the "chaos" to raise prices! It is pointed out that in addition to demand, the alliance of shipping companies is also an important reason for the sharp rise in freight rates.
Overseas companies
OpenAI launched a new flagship model, GPT-4o, which can be handled by AI in graphic and audio mobile phones, and the human-like speed is ultra-fast and responsive. GPT-4o is open to all users, including free users, and responds to audio input in as fast as 232 milliseconds, with an average response time similar to that of humans. Compared to GPT-4 Turbo, it is twice as fast, the cost is 50% lower, and the API rate limit is increased by five times. OpenAI demonstrates using ChatGPT on a mobile phone to guide people to solve equations, interpret and analyze charts in real time, and it can also read user emotions, albeit a little difficult. OpenAI also launched a desktop version of ChatGPT.
Report: Apple prepares to sell the Vision Pro headset for the first time outside the United States. Apple is preparing to sell the Vision Pro headset outside the U.S. after next month's Worldwide Developers Conference. The first overseas expansion candidates are likely to include China, France, Germany, Australia, Japan, South Korea, and Singapore.
Meta explores the development of AI headsets with cameras and translation. But insiders revealed that the product design has not yet been decided, and there are still technical and privacy issues that have not been resolved. According to the analysis, there are already many companies interested in developing AI headsets, and Meta is not too early to start in this crowded track, and it is still unknown whether it can succeed.
The European Union is stepping up its antitrust investigation into Microsoft's video conferencing app Teams. If ultimately found to have violated EU antitrust law, Microsoft could face hefty fines of up to 10% of its annual global revenue.
GameStop soared 120% intraday and closed up more than 74%, its best one-day performance since 2021. The speculation of Gill's comeback drove a group of retail investors to hold concept stocks higher.
With a 90% success rate of AI-generated drug molecules, it will only take 5 years to develop new drugs in the future.
Report: Samsung's second-generation 3nm production line will start operation in the second half of the year. Samsung Electronics will showcase its latest 3nm technology chip, Exynos W1000, which is being applied to the Galaxy Watch7 and Galaxy S25 for the first time at a new product launch event in July, directly challenging Apple and TSMC.
SoftBank's net loss in fiscal 2023 decreased by 76.5% year-on-year, achieving profitability for the second consecutive quarter. Thanks to Arm, which went public in the middle of last year, SoftBank's net worth hit an all-time high.
The mining "deal of the century" was full of hardships, and after BHP Billiton raised its offer, Anglo American once again refused. BHP Billiton initially offered Anglo American £31.1bn before increasing it to £34bn, but Anglo American felt the price fell short of expectations and rejected the offer on Monday.
Industry/Concept
1. Robot| According to Southern Metropolis Daily, Unitree Technology released a new humanoid robot called Unitree G1, priced from 99,000 yuan. The robot not only has a large joint movement angle and up to 34 joints, but also incorporates force and position hybrid control technology to simulate the precise operation of the human hand. In addition, Unitree G1 is driven by UnifoLM (Unitree Robot Unified Large Model), which has strong capabilities for self-learning and iterative upgrading.
Comments: Northeast Securities pointed out that in the field of humanoid robots, inertial sensors are very critical to attitude balance control. The inertial sensors manufactured by MEMS process are expected to be widely used in humanoid robots due to their small size, light weight, strong environmental adaptability, low price, and easy mass production.
2. Tungsten products| Baichuan Yingfu data shows that on May 13, the price of domestic tungsten metal rose in many varieties. Among them, ammonium paratungstate, tungsten powder and scheelite concentrate increased by 1.79%, 1.53% and 1.33% respectively compared with the 10th, and the quotations were 227,000, 3.32 million and 152,500 yuan/ton respectively. Since the beginning of this year, the price of tungsten products has continued to rebound, and ammonium paratungstate has risen by more than 25% since the low point of the year.
Comments: CITIC Securities Research Institute believes that the mainland, as the world's largest tungsten resource reserves and producers, has a leading position in the supply side of tungsten ore. In recent years, the output of tungsten concentrate in mainland China has declined from 145,000 tons in 2019 to 123,000 tons in 2023 due to factors such as the constraints of total mining control indicators, the decline in mine grades, and the improvement of environmental protection supervision requirements. Due to the small number of new projects at home and abroad, the short-term increase is very limited, and the supply of tungsten resources may continue to be tight. Coupled with the recovery of demand brought about by the recovery of downstream manufacturing, it will form a strong support for tungsten prices.
3. AI Assistant| On May 10, local time, OpenAI announced on social media X that it would demonstrate the update of ChatGPT and GPT-4 live on its official website at 10 a.m. on Monday (1 a.m. Beijing time on Tuesday).
Comments: The International Data Corporation (IDC) predicts that in 2024, more than 70% of terminal devices equipped with artificial intelligence functions in the Chinese market will be equipped with artificial intelligence functions, and artificial intelligence terminals will account for 55%. The mainland's artificial intelligence industry will make great progress in the next 10 to 15 years, and a number of industrial elements are leading the world. It is estimated that by 2035, the scale of Chinese's artificial intelligence industry will reach 1.73 trillion yuan, accounting for 30.6% of the global total. PwC even predicts that AI could add $15.7 trillion to global GDP by 2030, a 20% increase from today.
4. AI Pharmaceutical| According to Xinzhiyuan, the latest research from BCG (Boston Consulting Group) found that the success rate of AI-generated drug molecules in phase I clinical trials is as high as 80%-90%, while the historical average is about 50%. In less than a year, AI has predicted the structure of 200 million proteins in the universe. The results show that AI has a strong ability to design or identify molecules with drug properties. Recently, many technology giants such as Microsoft, Nvidia and Google have increased the layout of "AI + healthcare".
Commentary: The McKinsey Global Institute (MGI) estimates that generative AI could bring between $60 billion and $110 billion in economic value to the pharmaceutical and healthcare industries annually. According to the Global Market Insights report, the "AI + healthcare" market is expected to grow at a compound annual growth rate of more than 29%, and the market size will reach $70 billion by 2032. Drug discovery and medical imaging have become the two most important areas for AI applications, accounting for more than 50% of the combined market share. In the future, perhaps artificial intelligence can help humans take off the holy grail of drug discovery.
5. Indium| Baichuan data shows that indium prices have risen rapidly since mid-to-late April. According to the latest quotation of Yangtze River Nonferrous Metals, the price of refined indium is approaching 3,000 yuan/kg, an increase of nearly 50% compared with the beginning of the year, and the price has hit a new high in more than 8 years since 2016. The latest indium ingot price in the European market is at $345/kg, up nearly 60% from last year's low and the price is also the highest since 2016.
Comments: Indium resources are extremely scarce, one of the seven scattered metals, equivalent to only 1/6 of gold reserves, according to the analysis. The application of indium in photovoltaic heterojunction cells, thin-film cells and optical chips has also shown a rapid growth trend. Due to the breakthrough in photovoltaic heterojunction cell technology, the demand for indium metal as a target has increased.
Today's news preview
Alibaba, Tencent, MINISO financial reports.
The announcement of the new tariffs imposed by the United States on China was announced.
Fed Chair Jerome Powell speaks.
Tanka I/O 2024 Competition.
U.S. PPI (APRIL).
German CPI for April.
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