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2024.04.03 00:05
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Breakfast | US stocks, bonds, and forex are all down, "Several key principles must be adhered to in Sino-US relations this year"

S&P and Dow Jones both fell for two consecutive days. Tesla dropped for the third consecutive day, with quarterly deliveries far below market expectations. Intel's transformation suffered setbacks, with losses in its contract manufacturing business widening. Xi Jinping stated that the US's economic, trade, and technological suppression against China is not about "reducing risks" but creating risks. Boeing secured a contract worth up to USD 559 million from the US Air Force over the next five years. HSBC is reportedly considering selling part of its business in Germany. Huawei plans to distribute dividends to shareholders totaling RMB 77.095 billion

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Overnight Morning Market

Solid economic data has led investors to further reduce their expectations for Fed rate cuts this year. The market now expects the total rate cut by the Fed this year to fall to around 65 basis points, lower than the 75 basis points expected by Fed officials announced after the March meeting. The three major U.S. stock indexes all closed lower, with the S&P and Dow falling for two consecutive days, marking the largest closing decline in four weeks since March 5.

Tesla fell by 4.9%, marking a three-day decline. Microsoft dropped by 0.7%, Apple fell by 0.7% for the third consecutive day. NVIDIA fell by 1%, AMD by 2.5%, and Arm by over 2%.

Most AI concept stocks continued to decline. fell by over 5%, by over 3%.

The sharp drop in Bitcoin dragged down cryptocurrency and blockchain concept stocks. Bitcoin mining companies CleanSpark, Marathon Digital, and Riot Platforms fell by nearly 9.4%, 8.8%, and 7.5% respectively, while MicroStrategy fell by 3.5% and Coinbase by 2.5%.

The Nasdaq Golden Dragon China Index (HXC) rose by 0.3%, marking a four-day increase. Nio and XPeng both fell by over 2%, while Li Auto rose by over 1%. NetEase fell by nearly 2%, Pinduoduo by nearly 0.8%, and Alibaba by nearly 0.7%.

Blue Chips and Hot Stocks

In the first quarter of this year, Tesla delivered 386,810 vehicles, the largest deviation from analysts' average expectations on record. Tesla plummeted by nearly 7% intraday, leading the decline among S&P 500 index components. Currently, Tesla's market value is $530 billion, less than a quarter of NVIDIA's.

Boeing secured a contract worth up to $559 million from the U.S. Air Force over the next five years.

General Motors delivered 594,233 vehicles in the U.S. in the first quarter, a 1.5% decrease.

HSBC is reportedly considering selling part of its German business unit.

Huawei plans to distribute dividends to shareholders totaling RMB 77.095 billion.

Deutsche Bank: Commodity giant Glencore may consider listing in the U.S.

Chips and Artificial Intelligence

Intel's Transformation Stumbles, Losses in Foundry Business Expand

Intel's new division Intel Foundry, responsible for manufacturing, had sales of $18.9 billion in 2023, lower than the previous year's $27.5 billion, with operating losses expanding from $5.2 billion in 2022 to $7 billion. It is expected that losses will peak in 2024 and achieve operational profitability on the mid-term level from now until the end of 2030. Intel fell by over 2% after hours.

The use of Intel's external fabs will peak this year and next. Currently, the company outsources about 30% of its wafers, with expectations to reduce this proportion to less than 20%.

Macro: Taking You Around the World

Xi Jinping spoke with U.S. President Biden over the phone, and both leaders believed that the call was candid and constructive. China welcomes Treasury Secretary Yellen and Secretary of State Blinken's recent visit to China Xi Jinping: U.S. Pressures on China in Economic, Trade, and Technology Arenas Are Not About "Risk Mitigation" but Creating Risks

Xi Jinping emphasized that the U.S. continues to introduce various measures to suppress China in economic, trade, and technology fields, with the list of sanctioned Chinese companies growing longer. This is not about "risk mitigation" but creating risks. If the U.S. is willing to engage in mutually beneficial cooperation and share the dividends of China's development, China's doors will always be open. However, if the U.S. insists on suppressing China's high-tech development and depriving China of its legitimate development rights, we will not stand idly by. (Xinhua News Agency)

U.S. President Biden: U.S. Does Not Seek a "New Cold War" or to Change China's System

Biden stated that U.S.-China relations are the most profound bilateral relationship in the world. The progress made in U.S.-China relations since the meeting in San Francisco shows that both sides can actively promote cooperation while responsibly managing differences. I reiterate that the U.S. does not seek a "new Cold War," does not seek to change China's system, does not seek to oppose China by strengthening alliances, does not support "Taiwan independence," and has no intention of conflict with China. The U.S. adheres to the One China policy. China's development is beneficial to the world, and the U.S. does not seek to contain China's development or decouple from China. (Xinhua News Agency)

Key Principles for China-U.S. Relations This Year

First, prioritize harmony, adhere to the principle of non-conflict and non-confrontation, and continuously enhance positive expectations for China-U.S. relations. Second, prioritize stability, avoid stirring up trouble, provoking incidents, or crossing boundaries, and maintain overall stability in China-U.S. relations. Third, prioritize trust, fulfill commitments with actions, and turn the "San Francisco Vision" into reality. Both sides should strengthen dialogue in a mutually respectful manner, manage differences prudently, promote cooperation with a spirit of reciprocity, and enhance international coordination with a sense of responsibility. (CCTV News)

Fed's Daly: Three Rate Cuts This Year Is the Baseline Forecast, Adjustments Can Be Made If Necessary. No Consideration to Change Inflation Target.

Fed's Mester: Expects Three Rate Cuts This Year, Not Ruling Out a Cut in June, Insufficient Reasons for a May Cut.

Moody's: U.S. Office Vacancy Rate Approaching 20% in the First Quarter, Reaching a Record High.

Morgan Stanley: Stay Away from the "Overbought" S&P 500 Index

Despite the "robust" outlook for a soft landing of the U.S. economy, investors' expectations have become too high, which is why it is advisable to look for opportunities beyond the S&P 500 index. This year's 10% return rate has been driven by multiple expansions, with optimism "excessively high" in a scenario where the labor market is not damaged or inflation further cools. "Blondes usually have an expiration date, so we focus on finding opportunities away from overbought indices."

China's National Bureau of Statistics: Formulating Policies to Promote Efficient Flow and Trading of Data, Establishing Data Element Revenue Distribution Mechanisms.

North Korea Announces Test-Firing of Hypersonic Ballistic Missile