Preview of US Stock Market: BTC breaks $59,000, BlackRock's spot ETF trading volume exceeds $1.3 billion.

• Source: Zhitong App.

1. Before the U.S. stock market opened on Wednesday, February 28, the futures of the three major U.S. stock indexes all fell. As of the time of publication, the Dow Jones futures fell by 0.33%, the S&P 500 index futures fell by 0.31%, and the Nasdaq futures fell by 0.40%.

2. At the time of publication, the German DAX index rose by 0.18%, the UK FTSE 100 index fell by 0.75%, the French CAC 40 index fell by 0.05%, and the European Stoxx 50 index fell by 0.10%.

3. At the time of publication, WTI crude oil fell by 1.12% to $77.99 per barrel. Brent crude oil fell by 1.05% to $81.79 per barrel.

Market News

Traders finally "surrender": Betting that the Fed will not cut interest rates more than three times this year. Bond traders are betting that the Fed will not cut interest rates by more than 75 basis points this year, in line with the most likely outcome implied by Fed policymakers. Swap contracts have been repriced to higher interest rate levels, with the December contract rate currently at 4.58%, only 75 basis points lower than the effective federal funds rate of 5.33%. Since July last year, the Fed's target rate has been between 5.25% and 5.5%. Market expectations for the Fed's next move have been converging towards the median of the latest quarterly forecast made by policymakers in December last year. However, even with this rate cut, there are doubts, and some investors are considering the possibility of further rate hikes.

Is the bullish trend in U.S. stocks about to fade? JPMorgan sounds the alarm: Fear of a return to "1970s-style" stagflation. The U.S. stock market hit a historic high again last week, but JPMorgan's chief market strategist Marko Kolanovic warned in an analysis report to clients that the risk of the U.S. economy returning to a stagflation scenario similar to the 1970s is increasing, suggesting that this uptrend may not last long. In this scenario, the economy would not over-expand or contract, similar to the stagflation period experienced in the 1970s. This phenomenon ravaged the U.S. economy in the 1970s and early 1980s, with soaring oil prices, rising unemployment rates, and loose monetary policy pushing the Consumer Price Index (CPI) to 14.8% in 1980, forcing Fed policymakers to raise interest rates to nearly 20% that year.

• Goldman Sachs CEO: More Uncertainty Expected for Soft Landing in the U.S. David Solomon, CEO of Goldman Sachs Group, stated that the slowdown in consumer spending has cast doubt on expectations that the U.S. economy will avoid a recession. Solomon said at a UBS Group conference on Tuesday, "The world is prepared for a soft landing. The market seems to believe that the certainty of a soft landing is very high. But in my personal opinion, there is more uncertainty." Solomon mentioned that corporate executives have informed him that due to persistently high prices, "moonlight" spending behavior has begun to decrease. He added, "Our business conditions are still good, but the uncertainty is higher than the level currently perceived by the market." In 2022 and 2023, interest rates are rising at the fastest pace in forty years as the Federal Reserve attempts to curb soaring inflation.

• Crazy Fundraising! Boosted by Bitcoin's Surge, BlackRock's Spot ETF Trading Volume Continues to Exceed $1.3 Billion. On Tuesday, driven by Bitcoin surpassing $57,000, the daily trading volume of BlackRock's Bitcoin Spot ETF (IBIT) exceeded $1.3 billion for the second consecutive day. On Wednesday, Bitcoin continued to break through $59,000, hitting a new high since December 2021.

• Stock News

• Vipshop (VIPS.US) Reports 9.2% YoY Growth in Q4 Total Net Revenue and 33% YoY Growth in Net Profit. Vipshop's Q4 total net revenue was ¥34.674 billion, compared to ¥31.758 billion in the same period last year, representing a 9.2% YoY growth; net profit was ¥2.98 billion, up from ¥2.24 billion in the same period last year, a 33% YoY growth; diluted earnings per ADS were ¥5.35, compared to ¥3.66 in the same period last year. The number of active customers in Q4 2023 increased by 2.3% YoY, from 47.5 million in the same period last year to 48.5 million. GMV in Q4 increased by 21.9% YoY, from ¥54.4 billion in the same period last year to ¥66.4 billion.

• Hutchison China MediTech (HCM.US) Releases Annual Results, Net Income of $101 Million, YoY Turnaround from Loss to Profit. Hutchison China MediTech released its annual results for the year ended December 31, 2023, with total revenue of $838 million, a 96.52% YoY increase; net income attributable to Hutchison China MediTech was $101 million, compared to a shareholder loss of $361 million in the same period last year, marking a turnaround from loss to profit; basic earnings per share were $0.12. The revenue increase was attributed to collaboration with Takeda, strong commercial progress in China, and growth in third-party distribution. In 2023, the oncology/immunology business saw a 223% increase in revenue (228% at fixed exchange rates) to $528.6 million, close to the upper end of financial guidance, including $280 million received from Takeda as an upfront payment. The 2024 comprehensive revenue financial guidance for the oncology/immunology business is $300 million to $400 million, benefiting from sales of oncology products already on the market and a target growth of 30% to 50% in royalty fees.

• Daqo New Energy (DQ.US) Reports a 44.8% YoY Decline in Q4 Revenue. Daqo New Energy's Q4 revenue was $477 million, down from $864 million in the same period last year, a 44.8% YoY decline; net profit attributable to the company's shareholders was $44.9 million, compared to $333 million in the same period last year. ADS earnings were $0.64, down from $4.26 in the same period last year. Adjusted net profit attributable to the company's shareholders was $66 million, compared to $363 million in the same period last year; adjusted ADS earnings were $0.94, down from $4.65 in the same period last year.

iQIYI (IQ.US) 2023 Q4 and full-year financial report: Achieving the best annual performance, with core financial indicators reaching new highs. iQIYI's total revenue for the year was 31.9 billion yuan, a 10% year-on-year increase; Non-GAAP operating profit was 3.6 billion yuan, up 68% year-on-year; Non-GAAP net profit was 2.8 billion yuan, up 121% year-on-year. In the fourth quarter, revenue was 7.7 billion yuan, with Non-GAAP operating profit at 928 million yuan. iQIYI's membership service revenue in 2023 was 20.3 billion yuan, a 15% year-on-year increase, mainly driven by the growth in ARM and daily average subscription members, as well as continuous optimization of operations to enhance member experience and monetization capabilities. In the fourth quarter, ARM reached a record high of 15.98 yuan, up 13% from the same period in 2022. In the fourth quarter, iQIYI's daily average subscription members reached 100.3 million, with a total of 101.1 million subscription members as of December 31, 2023.

Baidu (BIDU.US) released its annual performance, with a net profit attributable to Baidu of 20.315 billion yuan, a 169% year-on-year increase. In the fourth quarter and full-year performance announcement for 2023, the group's total revenue in the fourth quarter was 34.951 billion yuan, a 6% year-on-year increase; net profit attributable to Baidu was 2.599 billion yuan, a 48% year-on-year decrease; diluted earnings per American depositary share were 6.77 yuan. For the full year 2023, the group's total revenue was 134.598 billion yuan, a 9% year-on-year increase; net profit attributable to Baidu was 20.315 billion yuan, a 169% year-on-year increase; diluted earnings per American depositary share were 55.08 yuan. By the end of 2023, Baidu's PaddlePaddle platform had attracted 10.7 million developers and served 235,000 enterprises and institutions. By the end of 2023, developers had created 860,000 models on PaddlePaddle. Baidu's autonomous ride-hailing service, Luobo Kuai Pao, provided 839,000 ride services in the fourth quarter of 2023, a 49% year-on-year increase.

eBay (EBAY.US) Q4 performance and profit guidance exceed expectations, expanding stock buyback plan. eBay's Q4 revenue was $25.6 billion, a 2% year-on-year increase, surpassing the market's expected $25.1 billion; earnings per share were $1.07, also exceeding the market's expected $1.03. Gross merchandise volume was $186 billion, a 2% year-on-year increase, exceeding the market's expected $182 billion. Active buyers were 132 million, a 2% decrease from the same period last year. Advertising revenue in the fourth quarter was $393 million, surpassing the market's expected $375 million, helping eBay improve profits despite losing customers. The company also added $2 billion to its existing stock buyback plan, increasing the total repurchase authorization to $3.4 billion. Strong holiday quarter performance has given investors new hope that the company can boost profits significantly after substantial layoffs. Beyond Meat (BYND.US) exceeds Q4 net revenue expectations and plans to take multiple measures to support profit growth. In the fourth quarter, Beyond Meat's net revenue decreased by 7.8% year-on-year to $73.679 million, with sales volume growth offset by a decrease in revenue per pound, but it exceeded the average analyst expectation of $66.8 million. The net loss was $155 million, compared to a net loss of $66.9 million in the same period last year; the loss per share was $2.40, higher than the average analyst expectation of a loss per share of $0.89, and higher than the loss per share of $1.05 in the same period last year. Beyond Meat expects full-year net revenue in 2024 to be between $315 million and $345 million, slightly lower than the average analyst expectation of $344 million; it expects the full-year gross margin to remain stable at around 15%, with performance in the second half of the year expected to outperform the first half; it expects full-year operating expenses to be between $170 million and $190 million, with relatively higher expenses in the first half of the year.

Car-making plans fall through, making Apple's (AAPL.US) "AI dream" more urgent. Earlier reports stated that Apple (AAPL.US) will cancel its electric car project that has been in the works for nearly a decade. Apple's abandonment of the autonomous car project means giving up potential billions of dollars in revenue and also relinquishing the dream of selling what a senior executive called the "ultimate mobile device." Apple hopes that other big bets—such as generative artificial intelligence (AI) and mixed reality headsets—can make up for this gap. On Tuesday, Apple internally disclosed this news, surprising nearly 2,000 employees working on the project. It was revealed that before making this decision, the company's executives and board had held several months of intense meetings on how to proceed. The result is that Apple's future will not depend on selling a $100,000 autonomous car. Instead, it will focus on catching up with competitors in the generative AI industry.

Catalyst for a trillion-dollar market cap? Eli Lilly's (LLY.US) "weight-loss miracle drug" may launch in India next year. David Ricks, CEO of the American pharmaceutical giant Eli Lilly (LLY.US), stated in a media interview on Wednesday that the company expects to launch its weight-loss drug product, tirzepatide, dubbed the "weight-loss miracle drug," in the Indian market with a population of 1.4 billion as early as next year. When asked if Lilly is open to approving generic versions of tirzepatide, Ricks said, "As long as it makes sense for the company's development, we are open to any way that can reach more patients." This weight-loss drug from Lilly, with the main ingredient tirzepatide, is sold in the U.S. market under the Mounjaro brand for diabetes treatment and the Zepbound brand for weight loss.

Important Economic Data and Events Preview

At 21:30 Beijing time: U.S. fourth-quarter actual GDP annualized quarter-over-quarter revised (%), U.S. fourth-quarter core PCE price index annualized quarter-over-quarter revised (%), U.S. January wholesale inventory month-over-month initial value (%).

• At 23:30 Beijing time: The EIA crude oil inventory change (in 10,000 barrels) for the week ending February 23 in the United States.

• Early morning the next day at 01:00 Beijing time: 2024 FOMC voter and Atlanta Fed President Bostic will participate in a fireside chat.

• Early morning the next day at 01:15 Beijing time: 2025 FOMC voter and Boston Fed President Collins will join a fireside chat.

• Early morning the next day at 01:45 Beijing time: FOMC permanent voter and New York Fed President Williams will participate in an economic briefing organized by the Long Island Association.

Earnings Forecast

• Thursday morning: Salesforce (CRM.US), HP (HPQ.US), C3.ai (AI.US), Snowflake (SNOW.US).

• Thursday pre-market: NetEase (NTES.US), Youdao (DAO.US), Dingdong Maicai (DDL.US), Best Buy (BBY.US).