Breakfast | Chinese concept stocks plummeted nearly 6%, NVIDIA fell 4.7%, ASML plunged 16%

Market Overview

US stocks rose only in small caps, with the S&P and Dow falling from their highs. ASML's financial report disappointed, dragging the chip index down by over 5%, also weighing on the overall US stock market. The New York Fed's manufacturing index unexpectedly fell into contraction in October, hitting a five-month low.

ASML plunged 16% in US stocks, marking the largest drop since March 2020. NVIDIA fell from yesterday's closing high, dropping by 6.8% at one point. KLA dropped by 15%, marking a ten-year low. AMD fell by over 5%. Apple released a new AI-supported product, the iPad Mini, causing a temporary 2.7% increase, reaching an intraday high. In bank stock reports, Goldman Sachs rose over 3% to a new intraday high before closing lower, while Citigroup opened higher but turned lower, falling by over 5%. After LVMH's financial report, the luxury goods giant, US stocks fell by 10% at one point, hitting a two-year low.

Chinese concept stocks fell by nearly 6%. JD.com and Ctrip fell by about 9%, while Pinduoduo dropped by nearly 6%. Offshore RMB fell by 400 points, breaching 7.13.

There are reports that Israel will not strike Iranian oil facilities, and the International Energy Agency (IEA) warned in its monthly report that ample supply offsets geopolitical risks, leading to a sharp drop in oil prices by over 5%, weakening inflation expectations. Coupled with risk aversion, US Treasury bonds rose, with the 10-year Treasury yield falling by nearly 7 basis points. Safe-haven asset gold rose, while Bitcoin broke through $67,000.

Stock News

ASML's early release of performance results in disappointing outlook, stock price plummets

ASML was originally scheduled to release its Q3 performance report on Wednesday but was briefly released early due to a technical error. Although the link was quickly deleted, the significant news in the report is the disappointing outlook for the company. According to FactSet data, ASML is currently expected to achieve a total net sales of €30 billion to €35 billion by 2025, while the market generally predicts €35.8 billion. ASML CEO Christophe Fouquet stated, "Although artificial intelligence still has strong development and growth potential, other niche markets will take longer to recover. It now appears that the economic recovery is slower than previously expected. This situation is expected to continue until 2025, leading to cautious customer attitudes."

AI boom drives Apple's stock price to intraday historical high, maintaining its position as the most valuable company

Apple's stock price extended its gains on Tuesday, reaching a record high intraday, benefiting from market optimism that the company will benefit from the launch of the AI-powered iPhone. The stock rose by 2.7% to $237.49 at one point, marking the first record high since July. This surge solidified Apple's position as the world's largest company, with its market value surpassing $3.6 trillion.

Only 2,500 Vehicles Approved for Road Use Annually! Stringent US Laws Pose Challenges to Musk's Large-scale Production of Robotaxi Dream

The National Highway Traffic Safety Administration (NHTSA) stated that Tesla has not applied for road exemption for its steering wheel-less prototype vehicle, Cybercab. Experts point out that the bigger issue is obtaining permits from various states for autonomous vehicles to operate on roads. For example, in California, Tesla may need several years to obtain the necessary permits

Citigroup opens high and falls, plunging 5%

In the third quarter, Citigroup's net profit fell by nearly 9% year-on-year, with EPS dropping by over 7%, affected by a year-on-year increase of $1.9 billion in credit loss provisions, up over 9%; market business revenue in the quarter increased by 1%, with stock market revenue growing by 32% and fixed income market revenue declining by 6% but still higher than expected; investment banking expenses increased by 44%, reflecting continued strong issuance of investment-grade bonds; service business revenue increased by 8%, reaching a new quarterly high. After the financial report was released, Citigroup initially rose by nearly 2%, but then fell by over 5% following the broader market downturn.

Quarterly revenue drops for the first time post-pandemic, luxury giant LVMH plunges 10% at one point

The world's largest luxury goods group, LVMH, announced in its financial report on Tuesday that all major divisions' performance in the third quarter did not meet analysts' expectations, with quarterly revenue declining for the first time since the pandemic, leading to a 10% plunge in the company's US ADR stock on Tuesday. The company stated that the poor performance in the third quarter was mainly due to the strengthening of the Japanese yen, resulting in a slowdown in growth in the Japanese region.

Boeing poised to raise up to $25 billion in funding

Boeing has indicated that it may raise up to $25 billion in funding through issuing new shares or debt to alleviate the financial pressure from years of massive losses. Since the beginning of 2019, Boeing has incurred losses exceeding $25 billion, and with its major production of commercial aircraft workers entering the second month of strikes, the company's finances are facing new pressures. The strikes are impacting the company's cash flow. Boeing has already used up over $1 billion in cash, and as of September, the company's remaining cash and securities totaled $10.3 billion. Last Friday, Boeing's newly appointed CEO Kelly Ortberg stated that the company will cut approximately 10% of its workforce, equivalent to about 17,000 positions, and has postponed the launch of a new 777 large passenger aircraft. Due to the strikes, production of Boeing's current 777 model and its best-selling 737 Max aircraft has been forced to halt.

Geopolitical Situation

Around 1.4 million youth alliance cadres and young students in North Korea sign up for military service or rejoin the army

On the 16th local time, North Korea stated that due to South Korea's major sovereignty infringement and provocative actions against North Korea, over 1.4 million youth alliance cadres and young students nationwide signed up for military service or rejoining the army (returning to the military) on the 14th and 15th.

Israeli officials: Possible strikes on Iranian military bases or government buildings

On the 15th local time, two Israeli officials stated that while Israeli attacks on Iran are not expected to target nuclear facilities and oil installations, they may include targets such as missile and drone launchers, warehouses, factories, Iranian military bases, government buildings, and more. Earlier on the 15th, during a security consultation involving Israeli Prime Minister Netanyahu, Defense Minister Gantz, and other ministers, a comprehensive consensus was reached on the action plan against Iran, possible timing, and response intensity, but final approval from the cabinet is still required to implement this action.

Macro Information

State Council Information Office: The Ministry of Housing and Urban-Rural Development, Ministry of Finance, People's Bank of China, and other departments will hold a press conference at 10:00 am on October 17th regarding the promotion of stable and healthy development of the real estate market.

New York Fed Manufacturing Index Plunges to -11.9, Surprising Analysts

In October 2024, the New York State manufacturing index plummeted from 11.5 in September to -11.9, surprising analysts who had expected 3.8. This is the worst reading since May, indicating a contraction in New York State once again, albeit at a steady pace. The new orders index fell 20 points to -10.2, while the shipments index dropped 21 points to -2.7.

Fed's Daly: Central Bank Officials Must Remain Cautious to Sustain Economic Growth

San Francisco Fed President Daly stated that as inflation cools and the labor market softens, the Fed must remain cautious, but she is optimistic that officials can maintain the current momentum of economic expansion. Daly noted that workers are benefiting from a strong labor market that is attracting more people into the workforce and narrowing income disparities, much like in past long periods of growth. "We are seeing some of the same patterns in the current expansion. Prime-age labor force participation is at new highs," Daly said. "Relative to recent history, the current economic expansion is still in its relatively early stages." Daly believes that the Fed has several rate cuts ahead before monetary policy returns to neutral. Referring to the federal funds rate, Daly said, "The fact is, we have a long way to go before we get to where we might end up." She added that the nominal neutral rate may have risen before the outbreak of the pandemic, but the exact level is difficult to predict accurately. She suggested that 3% could be a reasonable guess