Breakfast | US stocks and bonds both fell, Chinese concept index rebounded sharply in a V-shaped manner, Chinese asset ETF surged

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U.S. stocks and bonds both fell, with the Dow down 400 points and Chinese concept stocks rebounding sharply

The only Wall Street major bank, Citigroup, which still expected a 50 basis point rate cut in November, has also surrendered. Market expectations for a Fed rate cut have been reduced to less than 50 basis points by the end of the year, the first time since August 1st, with an expected rate cut of 21 basis points in November.

The three major U.S. indexes all fell by about 1%, with investors accelerating the selling of U.S. stocks towards the close. At the close, the Nasdaq fell by 1.18%, the S&P 500 fell by 0.96%, and the Dow fell by 0.94%. 11 sectors of the S&P 500 index generally fell, with only the energy sector benefiting from the surge in oil prices.

Among the "Tech Seven Sisters," only NVIDIA closed higher. NVIDIA rose by 2.24%, Apple fell by 2.25%, Tesla fell by 3.7%, Microsoft fell by 1.57%. Google Class A fell by 2.44%, Meta fell by 1.87%, and Amazon fell by 3.06%.

Chinese concept stocks outperformed the U.S. market. The Nasdaq China Golden Dragon Index rose by 0.07%, the China Technology Index ETF (CQQQ) closed up by 6.43%, the KraneShares China Internet Index ETF (KWEB) closed up by 1.2%, the Direxion FTSE China Bull 3X ETF (YINN) closed up by 13%, the Direxion FTSE China Bear 3X ETF (YANG) closed down by 13.41%, the "China Dragon" ETF Roundhill China ETF (DRAG) closed up by 3.12%, the Xtrackers Harvest CSI 50 (ASHS) closed up by 9.99%, and the Deutsche Bank CSI 300 Index ETF (ASHR) closed up by 7.98%. The FTSE A50 night futures closed up by 1.98%, hitting a new high since mid-December 2021.

Among popular Chinese concept stocks, Mengniu Dairy ADR rose by 10.52%, Meituan ADR rose by 4.51%, Li Auto rose by 4.18%, ZEEKR closed up by 4.01%, Baidu rose by 3.63%, Alibaba rose by 2.61%, Tencent Holdings ADR rose by 2.6%, XPeng rose by 2.11%, Nio rose by 0.3%, JD.com rose by 0.23%, Tiger Brokers fell by 7.51%, Fangdd Network fell by 14.23%, Bilibili fell by 4.03%, NetEase fell by 2.72%, New Oriental fell by 1.29%, Pinduoduo fell by 0.76%.

Summary of Chinese asset gains during the holiday period: FTSE China A50 futures surged by 15.8%

During the holiday period, the Hang Seng Index, Hang Seng Tech Index, and Hang Seng China Enterprises Index rose by 9.30%, 13.36%, and 10.93% respectively. From September 30th to October 8th 6:00, the FTSE China A50 Index futures rose by about 15.8%, surpassing 52% from the year's low point; the Nasdaq China Golden Dragon Index rose by about 12%; the U.S. Dollar Index (DXY) rose by about 2.1%; the offshore RMB depreciated against the U.S. dollar by about 1%; Brent crude oil rose by about 11.6%; the 10-year U.S. Treasury yield rose by 27 basis points; the S&P 500 index fell by about 0.7%, while spot gold and London copper fell slightly.

FTSE China A50 futures surged over 52% from the year's low point, with record high open interest contracts

During the National Day holiday in mainland China, major securities firms saw a record high number of new account openings. In preparation for the A-share market opening, securities firms have launched 7x24-hour bank-securities transfer services. According to Bloomberg data, as of October 4th, nearly $6 billion flowed into U.S.-listed emerging market and specific country ETFs, reaching a new high in over a year. Among them, five major ETFs investing in Chinese stocks attracted approximately $4.9 billion, with an unprecedented scale. During the National Day holiday, traders shifted their focus to futures listed in Singapore and Hong Kong.

CCTV News: International capital optimistic about China's economic development prospects

Foreign investment banks such as Goldman Sachs, UBS, and Morgan Stanley have expressed optimism about Chinese assets. A professional from Morgan Stanley emphasized that Chinese assets are leading the global stock market, with both Hong Kong and A-shares receiving almost unanimous positive outlooks. The trading volume has significantly increased, indicating a substantial net inflow. From an absolute perspective, the static PE ratio of the CSI 300 Index remains very attractive at only 12.3 times, compared to 28 times for the S&P 500 Index and 20.9 times for the Nikkei 225. Therefore, there is still significant room for recovery in the A-share market. It is important to monitor the progress of policy implementation and fiscal stimulus in the fourth quarter, as there is a high possibility of increased fiscal support.

Goldman Sachs: Clients are most concerned about "whether they see funds flowing from India to China," and the answer is "undoubtedly, yes"

When the Chinese stock market experiences "intense" buying pressure, the Indian stock market becomes vulnerable. Recent data shows that global funds are selling off Indian stocks, with the net selling scale reaching a record high since at least January 1, 1999. Goldman Sachs stated that the recent sell-off was mainly triggered by the strong performance of the Chinese market, with the Hang Seng Index rising by 26% last month, and the bullish sentiment is expected to continue.

Mainland investors flock to the Hong Kong stock market during the National Day holiday: Hong Kong brokers actively promote account openings

"(When I went to open an account), there were a lot of people, and the appointments were already full early on. I went to line up early, and there were already six people in front of me when I arrived," said investor Liang Chen (pseudonym) who went to open an account at a bank in Hong Kong on October 6th. Some investors have gone from "a 50% loss to a 30% profit."

Enthusiasm in the mainland market continues to rise, with new and old investors rushing into the market

Recent grassroots research data obtained by reporters shows that during the National Day holiday, a large securities firm averaged 11,000 to 12,000 new account openings per day, with nearly 20 billion yuan of new individual funds added on September 27th. A senior investor stated that the number of new accounts opened during the holiday period may reach several million. "It is expected that many large time deposits will be redeemed, and even consumer loans are rapidly increasing."

CME Group: Offshore RMB sets new daily trading volume record in September

CME offshore RMB futures saw a daily average trading volume surge to 4,567 contracts in September, setting a new record high; the daily average notional value of offshore RMB in September increased by 118% year-on-year to $457 million, also reaching a historical high. Paul Houston, Global Head of CME Foreign Exchange Products, believes that there has been robust demand for RMB products in the market this year.

Minsheng Strategy: Let go of the anxiety of missing out and think about the Chinese story

Policy shifts, global liquidity easing, position replenishment, and historically low valuations have all contributed to the rebound of A-shares in the past two weeks. Historically, the logic of a bull market in A-shares has never been repeated, and when there are comparable bull market experiences in history, the rebound is often unsustainable. China has undergone financial de-risking, and the value of the manufacturing industry is becoming more apparent in an increasingly complex international environment, which may be the blueprint for the true "Chinese story" in the future.

Fu Peng: What is needed now is not only strong medicine but also to stop it first

Fu Peng, Chief Economist of Dongbei Securities, stated that in terms of economic issues, from August to September, everyone was discussing economic pressures. Some so-called experts and scholars may have policy recommendation channels, but in reality, many people may not have noticed the critical point of the economy. In general, the three major policies can be divided into leveraging and direct subsidies. What is needed now is not only strong medicine but also to stop it first. However, long-term solutions should not be forgotten at the same time.

Liu Chenming from GF Strategy: The most vigorous rise in Hong Kong stocks during the National Day holiday is in the semiconductor sector

Liu Chenming stated that during the National Day holiday, the most vigorous rise in Hong Kong stocks was in the technology sector represented by semiconductors. "After the National Day holiday, A-shares, represented by the Sci-Tech Innovation Board, should also be the focus." Drawing on historical experience, after a violent rebound of 20% in a single week, there may still be around 7% rebound space, and after that, it will enter a oscillation phase, with a final outcome in about 60 trading days.

Micro-cap stocks frequently enter mid-cap stocks in the violent surge of Hong Kong stocks

On Monday, technology and consumer sector stocks in Hong Kong surged across the board, with many micro-cap stocks "disappearing" in the violent surge of stock prices. The phenomenon of micro-cap stocks entering mid-cap stocks in the violent surge of stock prices has frequently appeared in the Hong Kong stock market, further indicating the importance that institutional investors place on the elasticity of micro-cap stocks, implying the probability of long positions by public funds such as QDII in this round of market.

Goldman Sachs once again raises S&P 500 index target

Goldman Sachs has once again raised its year-end target for the S&P 500 index to 6,300 points (previously 5,600 points), and has also raised the 12-month target to 6,300 points (previously 6,000 points), stating that these targets may be "too low."

Super Micro Computer says it has shipped over 100,000 units of new liquid-cooled GPU in the first quarter, with a nearly 18% intraday increase

Super Micro stated that it has recently deployed over 100,000 GPUs with its liquid cooling solution for some of the largest AI factories and cloud service providers, resulting in the largest intraday increase in seven months. Analysts commented that if the average price of these GPUs is comparable to NVIDIA's $3,000 chips, it could mean orders worth billions of dollars.

U.S. judge orders Google to open app store to competitors

A U.S. judge ruled on an antitrust lawsuit filed by game company Epic, which will take effect on November 1. The three-year injunction against Google Play Store, a Google app platform under Alphabet, will be limited to the U.S. market. Google Play must allow competitors' Android apps to access the platform

AstraZeneca and Stone Pharmaceutical Group reach exclusive licensing agreement

Both parties will collaborate on developing a preclinical innovative small molecule lipoprotein(a) (Lp(a)) inhibitor. AstraZeneca is set to pay Stone Pharmaceutical Group up to $1.92 billion in milestone and royalty fees, as well as a $100 million upfront payment.

Jefferies downgrades Apple rating from "Buy" to "Hold"

The target price is $205, citing "overly high" expectations for the iPhone.

BYD distributes profit bonuses to employees

Recently, a self-media blogger quoted a netizen's disclosure that "BYD suddenly distributed profit bonuses without notifying employees in advance, with some receiving seventy to eighty thousand yuan, and others receiving over one hundred thousand yuan." In response, BYD confirmed the situation.

WuXi AppTec plans to issue $500 million convertible bonds

WuXi AppTec plans to issue $500 million in zero-interest, secured convertible bonds due in 2025. The initial conversion price is HKD 80.02 per H share, representing a premium of approximately 15.97% over the closing price of HKD 69.00 per H share on October 7th