Breakfast | Chinese concept giants such as Alibaba and Tencent will release their financial reports this week, while Apple is close to reaching an agreement with OpenAI

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Overnight Morning Market

Important events and data preview for this week are as follows:

Monday: China's April annual electricity consumption rate, China's April total electricity consumption; Speech by Federal Reserve's Mester and Federal Reserve Board Member Jefferson on central bank communication. Tencent Music releases financial report.

Tuesday: US April PPI annual rate, US April PPI monthly rate; Speech by Federal Reserve Board Member Lisa Cook. Federal Reserve Chairman Powell and European Central Bank Executive Board Member Knot participate in a meeting and deliver speeches. Google hosts the 2024 I/O Developer Conference. OpenAI product launch event. Alibaba, Tencent, and Miniso release financial reports.

Wednesday: US April CPI, retail sales, US May New York Fed Manufacturing Index, US May NAHB Housing Market Index. Seoul Stock Exchange closed in South Korea; Hong Kong Stock Exchange closed, with Southbound and Northbound trading suspended.

Thursday: US initial jobless claims for the week, US April total housing starts annualized, US April total building permits, US May Philadelphia Fed Manufacturing Index, US April industrial production. Speech by Federal Reserve Board Member Bowman. Federal Reserve Board Member Bostic testifies before the Senate Banking Committee. Baidu, JD.com, ZTO Express, JD Logistics, Walmart release financial reports.

Friday: China's April total retail sales of consumer goods annual rate, China's April year-on-year increase in industrial value added above designated size. Speeches by Federal Reserve's Mester and Bostic on economic outlook. China's National Bureau of Statistics releases monthly report on residential sales prices in 70 large and medium-sized cities. Hang Seng Index Company announces the review results of the Hang Seng Index series for the first quarter of 2024.

Last week, the Dow rose by 2.16%, marking an eight-day consecutive increase. The S&P 500 index rose by 1.85%, while the Nasdaq rose by 1.14%. The Hang Seng Index rose by 2.64%, while the Hang Seng TECH Index fell by 0.23%.

Blue Chips and Hot Stocks

Tencent's QQ earthquake early warning function goes live in Sichuan. Earthquake information within 50 kilometers of Sichuan and its surrounding areas can reach subscribed users in seconds.

Apple Store Maryland employees vote to authorize first strike, seeking to change what they call "unpredictable" scheduling practices and aiming for wages to align with local living costs.

Communications Workers of America: New Jersey Apple Store votes against unionization.

A Boeing 747 cargo plane in Japan returns due to hydraulic system failure.

Institution: Starlink to achieve positive free cash flow for the first time in 2024

According to a report by aerospace industry data firm Quilty Space, it is projected that SpaceX's Starlink project will generate revenue exceeding $6.6 billion in 2024, surpassing all global competitors. The two satellite operators SES and Intelsat have just announced a merger, with the combined company expected to have an annual revenue of around $4.1 billion. This could be a significant milestone before Starlink's IPO.

China Mobile's Migu Company: Becomes the largest internet platform and new media platform of state-owned enterprises. Migu Company is committed to building the top sports content platform in China, with a total user base of 380 million; video ringtone users exceeding 400 million, smart users reaching 25 million, with over 600,000 e-books and 1.3 million physical books in its library Launched more than 2300 cloud games online, with a total active user base of 120 million.

Geely Auto: "Announcement of strategic partnership with Foretellix" deemed as false information.

Media: Didi plans to restart its business operations in the UK. In recent months, Didi has obtained operating licenses in cities such as Rotherham, Rochdale, and Salford globally, and intends to conduct private rentals within buildings.

CAAM: In April, automobile sales increased by 9.3% year-on-year, with new energy vehicle sales increasing by 33.5% year-on-year.

The new Tesla Model 3 high-performance version has been declared by the Chinese Ministry of Industry and Information Technology, equipped with a dual-motor all-wheel-drive system. The maximum power of the front motor is 137 kW, and the maximum power of the rear motor is 265 kW. In terms of dimensions, the new car measures 4724/1848/1430mm in length, width, and height respectively, with a wheelbase of 2875mm. It uses ternary lithium-ion batteries. Prices start at 335,900 yuan.

Tesla's German factory was attacked by protesters, and several people were arrested.

Chips and Artificial Intelligence

Media: Apple is close to reaching an agreement with OpenAI to apply ChatGPT to the iPhone. Apple plans to upgrade Siri with AI technology and will release it at WWDC in June.

Arm is reportedly developing AI chips and plans to start mass production in the fall of 2025. Arm will establish an AI chip division with the goal of producing prototype products by spring 2025.

Media: Microsoft announced a 4 billion euro investment to build data centers in France.

South Korea plans to support the chip industry with 7.3 billion USD.

Media: MediaTek may collaborate with NVIDIA to develop Arm architecture AI PC processors, with design finalization expected in the third quarter and verification in the fourth quarter. The new chip is priced as high as 300 USD. NVIDIA CEO Jensen Huang will visit Taipei on June 2 before Computex, and there are rumors that MediaTek will reveal details of its collaboration with NVIDIA on AI PC processors in June.

New research finds that some AI systems are adept at "lying"

A research team at the Massachusetts Institute of Technology in the United States stated that some AI systems have learned how to deceive humans, including some systems that claim to have been trained to be helpful and honest. The research results were published in the journal "Patterns" under the American Cell Press. The article focuses on the ways in which AI systems spread false information - through learned deception, they systematically learn to "manipulate" others.

Macro: Taking You Around the World

"Big Short" prototype Danny Moses: Still bearish on Tesla, $50 may be a reasonable target price

"In Tesla's core business, everything is falling apart. Musk has led everyone towards robotaxis, artificial intelligence, and autonomous driving. Musk's decision to cut over 10% of the company's global workforce, reports of Tesla securities and telecommunications fraud investigations, and uncertainties surrounding robotaxis are all downside risks. A stock price of $50 and a market value of $150 billion is a reasonable valuation."

Analysts are raising profit estimates for US companies at the fastest pace in two years This suggests that the worst period for the sharp decline in profits of American companies may be in the past. Two key groups closely related to the economic cycle—energy and materials companies—have led the way in profit increases. This is a good sign for the direction of the U.S. stock market this year.

CICC: Slowdown in April financial data mainly due to financial "squeezing out water", no need to exaggerate the impact

The demand for housing remains weak, and the slow pace of government bond issuance has indeed dragged down financial data, reflecting insufficient domestic demand. However, the changes in the financial industry's GDP statistics have affected the behavior motivation of financial institutions, effectively "squeezing out water" from deposit and loan data, indirectly reducing the M2 growth rate. With the crackdown on idle capital and the squeezing out of water from financial GDP starting to take effect, achieving the 5% target will require the real economy to maintain steady growth, highlighting the increasing importance of fiscal efforts. If the pace of bond issuance accelerates after May, it will be beneficial to support monetary growth and economic growth.

CITIC Securities: Mainland China is expected to achieve a 5% economic growth target this year, and the necessity for significantly loose monetary policy at this stage is not high. China's CPI and PPI both saw a slight increase year-on-year in April, indicating that the period of greatest downward pressure on prices this year may have passed.

Northbound funds will no longer disclose real-time transaction amounts starting today

According to the Hong Kong Stock Exchange, adjustments to the real-time transaction amounts and daily quota balance related to northbound trading will officially take effect on May 13 (Monday). This means that the Hong Kong Stock Exchange will no longer disclose the real-time buy transaction amount, sell transaction amount, and total transaction amount of northbound funds.

Chinese Premier Li Keqiang chaired an executive meeting of the State Council, approving the "Action Plan for the Digital Transformation of Manufacturing Industry".

The U.S. Internal Revenue Service suspects that Donald Trump owes over $100 million in taxes.

German media: The 27 EU countries have reached a consensus on the draft of security commitments to Ukraine.

Hong Kong's various talent attraction measures have received approximately 290,000 applications in total, with 180,000 already approved