August 27 Financial Breakfast: Latest news on US tariffs! Gold surged nearly 1% approaching 3400, US stocks rose across the board, Nvidia up over 1%

Trump stated that the trade agreements with the European Union, Japan, and South Korea have been completed, and indicated that a 100% or 200% tariff on imported furniture will prevent other countries from dominating the furniture industry. He also mentioned that China must provide magnets to the United States, or else a 200% tariff or similar measures will be imposed. Additionally, Trump plans to nominate Malpass or Milan to replace Federal Reserve Board member Cook, and stated that a majority will soon be in favor of advocating for interest rate cuts among the Fed's decision-making leadership. Wall Street is focused on Nvidia's earnings report, short-term bond yields are declining, and the overall market remains optimistic.

All three major U.S. stock indexes rose, with the Dow Jones up 0.3%; the S&P 500 up 0.41%; and the Nasdaq rising 0.44%, closing at 21,544 points; the China Golden Dragon Index climbed 0.73%. European stocks faced pressure, with the French government facing a crisis, leading to a 1.7% drop in French stocks due to financial stocks leading the decline, while UK and German stocks fell 0.6% and 0.5%, respectively. In popular stocks, Nvidia rose 1.09%, Microsoft fell 0.44%, Apple rose 0.95%, Meta rose 0.11%, and Tesla rose 1.46%. Eli Lilly's weight loss drug in development made progress in key tests, with its stock price soaring 5.9%; EchoStar surged 70.3%, and Boeing jumped 3.5%, making it the largest gainer among Dow components.

The U.S. dollar index fell 0.23%, temporarily stabilizing above 98.0; the euro/dollar rose 0.18%, holding steady at 1.1600. The dollar/yen fell 0.22%, facing resistance at 148.0; gold rose 0.8%, rebounding close to 3,400; WTI crude oil fell 2.21%, ending a four-day rise; Bitcoin rose 1.53%, regaining $110,000; and Ethereum rose nearly 5%.

Macro News

Trump: Trade agreement with the EU, Japan, and South Korea completed, high tariffs on imported furniture

On Tuesday, Trump stated that the trade agreements with the European Union, Japan, and South Korea have been completed, and indicated that high tariffs will soon be imposed on imported furniture. Trump pointed out that a 100% or 200% tariff will prevent other countries from dominating the furniture industry, hoping to revitalize the furniture manufacturing industry in North Carolina and South Carolina.

The trade agreements mentioned by Trump with the EU, Japan, and South Korea were announced in July. The tariff imposed by the U.S. on the EU is 15%, while the EU has implemented zero tariffs on all industrial products imported from the U.S. Trump threatened that if countries imposing digital taxes do not repeal relevant legislation, the U.S. will impose subsequent additional tariffs on those countries. Sources indicate that the U.S. is considering whether to impose sanctions on officials enforcing the EU's Digital Services Act.

On Monday, Trump stated that in the trade dispute between the two countries, China must provide magnets to the U.S., or else a 200% tariff or similar measures will be imposed.

U.S. business equipment spending shows resilience, but consumer confidence in the labor market continues to deteriorate

In July, U.S. durable goods orders fell 2.8% month-on-month, with the market expecting a decline of 4%. Excluding aircraft, non-defense capital goods orders rose 1.1% month-on-month, with expectations of a 0.2% increase. The increase in new orders for key capital goods in July exceeded expectations, suggesting that business equipment spending started strong in the third quarter However, the U.S. Conference Board Consumer Confidence Index fell to 97.4 in August. The sub-index measuring expectations for the next six months declined in August, while the present situation index dropped to its lowest level since April. Consumer confidence remains significantly below pre-pandemic levels, and the recent slowdown in the labor market has intensified economic concerns triggered by Trump's tariff policies.

German Central Bank Officials Warn of Eurozone Debt Risks

Michael Theurer, a member of the Executive Board of the Deutsche Bundesbank, commented in the Handelsblatt that regulators are concerned about the rising levels of government debt in the Eurozone, as countries remain closely linked to banks. Theurer pointed out that during the financial crisis and sovereign debt crisis, the ties between nations and banks threatened financial stability, and doubts about national solvency undermined banks' credibility. Issues affecting nations or banks during crises may still exacerbate each other today, warning that rising costs of sovereign borrowing could still weaken banks' balance sheets.

U.S. Commerce Secretary: Government May Get Involved in Defense Industry

U.S. Commerce Secretary Howard Lutnick stated that the government may get involved in the defense industry. Lockheed Martin derives 97% of its revenue from the U.S. government. "They are essentially a department of the U.S. government." Trump stated on Monday that he hopes the U.S. government will invest more in healthy American companies, although critics warn that such a role for the government could limit corporate strategy and market flexibility, questioning the impact on consumers.

He also said, "If a company approaches the U.S. government and says we need your help, we want to fundamentally change the status quo; I think this is a matter between the company's CEO and the U.S. President, to see if the President is willing to listen to their opinions and change the rules," mentioning a recent agreement with Nvidia. The U.S. government has reached agreements with chip manufacturers Nvidia and AMD to take a 15% cut from the revenue generated from previously banned chip sales to China.

U.S. Treasury Secretary: Trump's Tariff Policy May Push U.S. Tariff Revenue Over $500 Billion

U.S. Treasury Secretary Lutnick stated on Tuesday that customs revenue from Trump's tariff policy could exceed $500 billion annually, showing significant growth from July to August, with even larger increases expected in September. Lutnick also noted that the Congressional Budget Office (CBO) raised its estimates of federal revenue from Trump's tariffs last week, predicting a reduction in the federal deficit by $4 trillion over the next decade. Lutnick expects this figure to continue rising.

Trump: The White House Will Hold Majority Support for Fed Rate Cuts

Trump stated that the White House may quickly allow newly appointed Federal Reserve temporary board member Stephen Miran to secure a longer-term position, and the White House will soon hold majority support for rate cut proposals within the Fed's decision-making upper echelons.

Earlier, Trump announced the dismissal of Federal Reserve Board member Lisa Cook, who stated through her lawyer that she would sue over the incident. Trump responded that he is prepared to face legal battles and reiterated his belief that Cook had engaged in misconduct The Federal Reserve's statement indicates that, from the central bank's perspective, Cook's status as a board member has not changed, and she can still participate in meetings unless a court ruling is made before the next meeting. The market generally believes that if Cook is forced to resign, the independence of the Federal Reserve may be compromised, which could manifest as a steeper yield curve, rising inflation compensation, and higher inflation risk premiums.

Market Overview

U.S. Stocks: All three major U.S. stock indices rose, with the Dow Jones up 0.3%, the S&P 500 up 0.41%, and the Nasdaq up 0.44%.

European Stocks: European stock markets generally fell, with the German DAX 30 index down 0.5%. The French CAC 40 index fell 1.7%. The UK FTSE 100 index dropped 0.6%.

Bond Market: The yield on the U.S. 10-year benchmark Treasury bond is about 4.26%, down 1 basis point from the previous trading day.

Commodities: Gold rose 0.81%, priced at $3,392 per ounce. WTI crude oil fell 2.21%, priced at $63.3 per barrel.

Foreign Exchange: The U.S. dollar index fell 0.23%, priced at 98.2. The USD/JPY fell 0.22%, while the EUR/USD rose 0.18%.

Cryptocurrency: Bitcoin rose 1.5% in the last 24 hours, currently priced at $111,775. Ethereum rose 5.13% in the last 24 hours, currently priced at $4,588.

Hong Kong Stocks: The Hang Seng Index night market futures closed at 25,626 points, up 52 points, compared to yesterday's Hang Seng Index closing at 25,524 points, with a premium of 101 points and a turnover of 12,937 contracts. The night market futures for the National Index closed at 9,179 points, with a premium of 30 points compared to yesterday's National Index closing.

Global Company News

ExxonMobil in Secret Talks with Russian Oil Company to Return to Russia

According to informed sources, during secret talks with the Russian oil company in Qatar this year, an executive from ExxonMobil (XOM.US) discussed the possibility of the company returning to the large Sakhalin project on Russia's Far East coast if both governments grant permission in the Ukraine peace process. Exxon executives have requested support from the U.S. government for the company's return to Russia and received a positive response. According to senior government officials, ExxonMobil CEO Darren W. Woods recently discussed this possibility with Trump at the White House. The Sakhalin-1 project is one of ExxonMobil's largest investments, with the company operating and holding a 30% stake. Informed sources stated that discussions about ExxonMobil resuming cooperation with Russian oil accelerated when Trump took office in January this year.

Apple's Fall Event Scheduled for September 9, Focus on iPhone 17 Series and AI Developments

Apple Inc. announced that it will hold its annual fall event at its headquarters on September 9 at 10 AM Pacific Time (1 AM Beijing Time on the 10th), themed "Awe dropping." As usual, Apple is expected to unveil the next generation of iPhones, the iPhone 17 series, during this event. This event will also serve as an important platform for Apple to showcase its latest advancements in AI technology. The market is keenly watching how Apple will compete against rivals in the fierce AI race and integrate related features into services like Siri IBM and AMD will collaborate to develop the next-generation computing architecture

IBM and AMD announced that they will collaborate to develop the next-generation computing architecture, combining IBM's quantum computers and software with AMD's supercomputing and artificial intelligence accelerators. IBM CEO Arvind Krishna stated that quantum computing will simulate the natural world and present information in new ways. By exploring how IBM's quantum computers and AMD's advanced high-performance computing technologies can work together, they will jointly establish a powerful hybrid model to break through the limits of traditional computing.

Today's News Preview

Australia's July Weighted CPI Year-on-Year

Germany's September GfK Consumer Confidence Index

Switzerland's August ZEW Investor Confidence Index

UK's August CBI Retail Sales Balance

US EIA Crude Oil Inventory for the week ending August 22

US EIA Cushing Crude Oil Inventory for the week ending August 22

US EIA Strategic Petroleum Reserve Inventory for the week ending August 22

Federal Reserve's Barkin delivers a speech