Breakfast | Investors are still dumping US tech stocks! After the "Seven Sisters" intraday V-shaped reversal, they generally fell

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Overnight Market Update

Investors continue to sell off tech stocks and shift to blue-chip and small-cap stocks!

Overnight, the three major U.S. stock indexes closed mixed, with the Dow rising 0.2% to 39,935.07 points, the S&P 500 falling 0.51% to 5,399.22 points, and the Nasdaq dropping 0.93% to 17,181.72 points.

Except for Tesla, the "Big Seven" tech stocks all fell. NVIDIA fell by about 7% before turning positive, but still closed down by 1.7%. Tesla rose by 4.6% at one point and closed up nearly 2%.

Popular Chinese concept stocks had mixed performances, with JD.com rising by over 2%, XPeng, Li Auto, iQIYI, and NetEase rising by over 1%, while Bilibili and Vipshop saw slight gains.

Biopharmaceutical company Viking Therapeutics saw its stock price soar by 38.7%, marking its best performance in five months, closing up over 28% to a new high in nearly two months since May 28. Eli Lilly's market value shrank by $120 billion in just a few days.

Blue-Chip Stocks and Hot Stocks

Dongfang Selection announced last night that its well-known anchor Dong Yuhui has resigned with immediate effect, acquiring 100% equity of a company related to Yuhui for 76.59 million yuan. New Oriental's stock price fell by over 5%.

Regulatory filings showed that Warren Buffett's Berkshire Hathaway has sold a total of 52.8 million shares of Bank of America stock over the past six trading days, worth $2.3 billion, reducing its stake to 12.5%. Berkshire still holds 980.1 million shares of Bank of America stock, valued at $41.3 billion.

Rumors circulated that Xiaomi may enter the autonomous vehicle market, as it is currently recruiting autonomous vehicle safety officers with a starting salary of 6,000 RMB per month. Xiaomi has not officially responded to this. Xiaomi's car deliveries have declined for two consecutive weeks, with Wang Hua, the head of Xiaomi's public relations department, attributing it to a new round of production line optimization and maintenance.

Insiders revealed that Meta may face its first antitrust fine from the EU in the coming weeks for bundling its classified ad service Marketplace with the Facebook social network.

XPeng announced that it will hold an AI autonomous driving technology launch event on July 30. The XPeng XNGP is about to receive the largest update in history, and the XPeng AI Tianji XOS 5.2.0 will also see a breakthrough.

After communicating with the FDA, Viking Therapeutics is advancing the obesity candidate drug VK2735 to Phase III clinical trials ahead of schedule, potentially bringing forward the market launch by a year. This drug is expected to be injected once a month, making it more convenient than similar miracle drugs from Eli Lilly and Novo Nordisk. The oral version of VK2735 will begin mid-stage trials in the fourth quarter of this year.

Chips and Artificial Intelligence

OpenAI tests AI search function SearchGPT. SearchGPT answers questions and follow-up questions with online information, providing source links and context, with more related information and sources in the sidebar; the prototype of SearchGPT is being tested by 10,000 users, and the search function will eventually be integrated into ChatGPT. The new feature is unrelated to training AI models and includes information sources from news groups and partners such as The Atlantic Industry insiders said that Taiwan Semiconductor's German factory will start construction in the fourth quarter of 2024, with mass production expected to begin as early as the fourth quarter of 2027, gradually reaching the goal of a monthly capacity of 40,000 wafers by 2028.

Elon Musk stated that Tesla's board of directors will discuss whether the electric vehicle manufacturer should invest $5 billion in his artificial intelligence startup xAI.

Financial Report Highlights

Hermès' second-quarter revenue exceeded expectations with a 13% growth, showing resilience in the Chinese market despite a slowdown. Apart from China, the Asia-Pacific region saw double-digit revenue growth in the second quarter, with nearly 20% growth in Japan. While customer traffic in Greater China declined during the quarter, revenue in the Asia-Pacific region excluding Japan increased by 5.5%, less than half of the first quarter's growth rate but still higher than analysts' expectations. Following the financial report, Hermès' US stocks quickly turned higher, rising over 4% at one point and closing with a 1% gain.

STMicroelectronics fell over 15% as its second-quarter performance, although slightly better than expected, led to a second downward revision of the company's full-year revenue and profit forecasts due to the continued low demand for chips in the automotive industry, resulting in a significant drop in stock price.

Macro: A Global Perspective

The US GDP in the second quarter exceeded expectations, growing by 2.8% quarter-on-quarter, while the core PCE price index fell to 2.9% quarter-on-quarter, still higher than expected. The US economy remains resilient, with inflation slightly easing compared to the previous quarter but still slightly above expectations.

US durable goods orders unexpectedly plummeted in June, with an initial decline of 6.6% month-on-month. Due to a sharp drop in non-defense spending, durable goods orders in June fell by 6.6%, marking the first decline after four consecutive increases.

The number of initial jobless claims in the US last week was 235,000, lower than expected and the previous value. The four-week moving average of continued jobless claims rose to 1.8535 million, reaching the highest level since December 2021.

As the US economy slows down, the Bank of Japan hints at a hawkish stance, expectations of a narrowing US-Japan interest rate spread rise, and a sharp drop in US tech stocks drives outflows of safe-haven funds, leading to a reversal in the yen carry trade and a resurgence of the yen