Overnight US Stocks | Dow hits record high, Morgan Stanley hits new high, Chinese concept stocks rebound, Fangdd Network closes up 55.43%

According to Zhitong Finance, on Wednesday, the three major indices closed higher, with the Dow hitting a new closing high. Scott Rubner, Managing Director and Tactical Expert at Goldman Sachs Global Markets, expects the U.S. benchmark index to close the year well above 6000 points.

[U.S. Stocks] At the close, the Dow rose 337.28 points, or 0.79%, to 43077.70 points; the Nasdaq rose 51.49 points, or 0.28%, to 18367.08 points; the S&P 500 rose 27.21 points, or 0.47%, to 5842.47 points. NVIDIA (NVDA.US) rose by 3%, Apple (AAPL.US) fell by nearly 1%, Intel (INTC.US) fell by 1.5%, ASML (ASML.US) fell by over 6%. The Nasdaq Golden Dragon Index closed up by 0.93%, Alibaba (BABA.US) rose by 0.35%, Nio (NIO.US) fell by nearly 2%, KE Holdings (BEKE.US) rose by 4.5%, and Fangdd Network closed up by 55.43%.

U.S. financial stocks rose by 1.2% on Wednesday, outperforming the S&P 500 and closing at record highs. Wall Street banks continued to release strong earnings reports, with Morgan Stanley (MS.US) exceeding market expectations. Morgan Stanley rose by 6.5%, marking its largest increase in nearly four years, closing at a record high of $119.51; third-quarter profits surged by 32%, trading revenue rose by 13%; wealth management revenue reached $7.27 billion, exceeding analyst expectations. Bank of America (BAC.US) rose by 1.6%, JPMorgan Chase (JPM.US) rose by 0.6%, Goldman Sachs (GS.US) rose by 1.4% to a record high, Citigroup (C.US) rose by 2.6%, and Charles Schwab (SCHW.US) rose by 0.2%.

[European Stocks] The German DAX30 index fell by 72.56 points, or 0.37%, to 19448.35 points; the UK's FTSE 100 index rose by 79.11 points, or 0.96%, to 8328.39 points; the French CAC40 index fell by 29.97 points, or 0.40%, to 7492.00 points; the Euro Stoxx 50 index fell by 38.08 points, or 0.77%, to 4908.65 points; the Spanish IBEX35 index rose by 70.76 points, or 0.59%, to 12000.96 points; the Italian FTSE MIB index rose by 85.55 points, or 0.25%, to 34664.00 points.

[Asia-Pacific Stock Markets] The Nikkei 225 index fell by over 1.8%, the Jakarta Composite Index in Indonesia rose by 0.29%, and the VN30 index in Vietnam fell by 0.15%.

[Cryptocurrencies] Bitcoin rose by 0.74% to $67,549.68 per coin; Ethereum rose by 0.25% to $2,612.83 per coin.

[Gold] COMEX gold futures rose by 0.41% to $2,689.90 per ounce; spot gold rose by 0.42% to $2,673.75 per ounce 【Crude Oil】 The West Texas Intermediate (WTI) futures price for November delivery on the New York Mercantile Exchange fell by $0.19, or about 0.27%, to settle at $70.39 per barrel. Brent crude oil futures for December delivery fell by $0.03, or about 0.04%, to $74.22 per barrel.

【Metals】 London metals saw mixed movements, with zinc up by 0.49%, nickel down by 0.52%, aluminum up by 0.58%, and copper up by 0.75%.

【Macro News】

U.S. Mortgage Rates Rise to Highest Level Since Early August. U.S. mortgage rates saw a significant increase for the second consecutive week, reaching the highest level since early August, leading to a sharp decline in home buying and refinancing activities. Data released by the Mortgage Bankers Association (MBA) on Wednesday showed that for the week ending October 11th, the 30-year fixed mortgage rate rose by 16 basis points to 6.52%. Over the past two weeks, this rate has climbed by 38 basis points, the highest since February 2023. The 15-year fixed rate surged by 23 basis points to 5.94%, the largest increase since May. Mortgage rates tied to U.S. Treasury yields have been rising recently, with reports of strong job growth and persistent high inflation prompting traders to reduce bets on significant rate cuts. The rise in mortgage rates is shattering hopes for a rapid recovery in the housing market.

Goldman Sachs Trading Division: Expects S&P 500 Index to Rise to 6,270 Points by Year-End. The S&P 500 Index has already set new highs at the close 46 times this year, and Goldman Sachs' trading team believes this trend is likely to continue into the last few months of 2024. Scott Rubner, Managing Director and Tactical Expert of the bank's global markets division, expects the benchmark U.S. stock index to potentially close the year well above 6,000 points. Based on data dating back to 1928, he found that the median historical return of the S&P 500 Index from October 15th to December 31st is 5.17%. The median return in election years is even slightly higher at around 7%, indicating a year-end level of 6,270 points.

San Francisco Fed Research: Foreign Inflation Affects U.S. Prices. The latest research from the San Francisco Fed found that domestic conditions such as the labor market and economic expectations are important determinants of U.S. inflation, but international inflation from other major economies also plays a role. Economists at the Fed studied global economic data from recent years and concluded that after controlling for domestic conditions and other factors, international inflation contributed around 4 percentage points to the rise in U.S. commodity prices during the pandemic period, and contributed 3 percentage points to the decline in commodity prices since 2023. Economists added that the impact of foreign inflation on U.S. service sector inflation appears to be relatively small. The IMF's recent emphasis on a global soft landing may further help reduce inflation in the U.S.

Lagarde: For Europe, Today's Changes in the Global Economy Represent a Turning Point. European Central Bank President Lagarde stated that for Europe, today's changes in the global economy represent a turning point. But if we approach it with the right spirit, I believe it can be an opportunity for revival. An unfavorable global economy can drive us to complete the internal market with the right spirit Intense foreign competition can encourage us to develop new technologies. More unstable geopolitics can drive us to become more secure and self-sufficient in the energy supply chain.

[Stock News]

Amazon (AMZN.US) invests in next-generation nuclear energy. Amazon and billionaire financier Ken Griffin have decided to invest $500 million in small nuclear reactors. Small nuclear reactors are an emerging technology hailed as the next era of atomic energy. X-Energy, the private nuclear reactor developer receiving this investment, stated in a Wednesday announcement that this funding will help cover the development costs of over 5 gigawatts of new power projects to be launched in the United States by 2039. At the time of Amazon's announcement, tech companies are seeking new energy sources to power large data centers required for running artificial intelligence systems. Google, a subsidiary of Alphabet Inc., announced on Monday its support for nuclear power plants and signed an agreement with Kairos Power to build a series of small reactors using molten salt cooling technology.

Morgan Stanley (MS.US) exceeds Q3 expectations with a 13% increase in trading revenue. Morgan Stanley's traders and bankers, like their Wall Street counterparts, reported better-than-expected revenue performance, driving a significant increase in third-quarter profits. The bank's trading revenue in the third quarter increased by 13%. Prior to this, Morgan Stanley's competitors had all reported profits as the market business boosted the industry's overall profits, and the steady rebound in investment banking fees increased trading matching commissions. CEO Gorman has stated that the investment banking business is at a turning point in a multi-year cycle, and with the rebound in investment banking fees, this will be a boon for the company. The bank also assured the market that the profit margin of its large wealth management business will increase significantly. The wealth department's revenue in the third quarter was $7.27 billion, higher than analysts' expectations, with net new assets of $64 billion.

ASML (ASML.US) plunges, showing divergent fates of various chip manufacturers with strong AI-related demand but weak demand in other areas. Since disclosing weak orders for its chip manufacturing equipment, ASML's market value has evaporated by over 60 billion euros ($65.3 billion), forcing investors to reassess the health of the industry. Following a 16% plunge on Tuesday, marking the largest drop in 26 years, the Dutch company fell by 5.8% on Wednesday. ASML, which holds a monopoly in producing the most advanced chip manufacturing equipment, serves as a barometer of the health of companies like Intel, Samsung Electronics, and TSMC. Its performance falling short of expectations triggered a general decline in the semiconductor sector. Its financial report shows divergent fates of various chip manufacturers, with a surge in demand for semiconductors capable of handling complex workloads of artificial intelligence (AI) programs, while demand in other areas remains weak. ASML did not provide specific reasons for why third-quarter orders were half of analysts' forecasts, only stating that some customers postponed factory construction.

Apple (AAPL.US): Over 80 Chinese suppliers are striving to produce Apple products using only renewable energy by 2030. Apple's Vice President and Greater China Managing Director Ge Yue introduced at the Sina ESG Global Leaders Conference on the 16th that Apple's extensive environmental efforts are all based on "Apple2030," aiming to achieve carbon neutrality across the entire value chain by 2030 Global commitments have been made by over 320 manufacturers to use 100% clean energy for Apple's product manufacturing by 2030. These represent over 95% of Apple's direct manufacturing expenditures. This includes over 80 suppliers in China who are working towards transitioning to using 100% renewable energy to produce Apple products by 2030. Additionally, 2024 marks the 10th anniversary of the "Apple Supplier Zero Waste Program". Over 300 supplier factories in mainland China have participated in this program, including all completed final assembly factories. Over the past decade, Chinese suppliers have successfully reduced over 2.5 million tons of landfill waste.

[Major Banks Ratings]

Citigroup: Upgrades Cisco (CSCO.US) stock rating from "Neutral" to "Buy"

Truist Securities: Raises Alphabet (GOOG.US) target price from $196 to $220

Barclays: Increases JD.com (JD.US) target price from $40 to $50