Market Overview

The three major U.S. stock indices posted two consecutive days of gains, with the S&P 500 and Dow Jones hitting new highs. Nvidia rose by more than 2%, closing at a record high for the first time in four months, bolstering the U.S. stock market.

Chinese concept stock indices fell by over 2%, reaching the lowest point of the month. XPeng Motors dropped by nearly 10%, NIO fell by more than 7%, and Pinduoduo fell by 6%. The offshore renminbi fell by nearly 300 points during the trading session, breaking through 7.10, to a new low of over a week.

U.S. Treasury bonds were closed for trading. The U.S. dollar index rebounded to a two-month high. The Japanese yen hit a new low of over two months. Bitcoin rose by nearly $4,000 during the trading session, breaking through the $66,000 mark and setting a new high for over two weeks.

The U.S. dollar strengthened, leading to a general decline in commodities. OPEC lowered its forecast for crude oil demand growth, and crude oil fell for two consecutive days, approaching a one-week low. After-hours media reported that Israel does not intend to target Iranian oil, causing oil prices to extend their decline, falling by nearly 5% at one point. Gold turned lower after hitting a new high of over a week. Base metals collectively stopped their two-day rise, with LME zinc and tin falling by more than 2%, and LME copper hitting a four-week low.

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In the Asian trading session, A-shares' transaction volume exceeded 1.6 trillion yuan, and the Shanghai Composite Index closed up by 2.07%. Military industry and debt restructuring concept stocks collectively exploded, and companies affiliated with China Merchants Group collectively repurchased shares.

News Highlights

In September, China's new social financing increased by 3.76 trillion yuan, and new RMB loans increased by 1.59 trillion yuan. The stock market rebound led to a rise in M2 growth rate to 6.8%, while M1 money supply continued to decline.

Recently, the phenomenon of residents repaying loans in advance has decreased.China's coal imports hit a historical high in September, with soybean imports up nearly 60% year-on-year, and natural gas and integrated circuit imports leading the increase; in terms of US dollars, exports in September increased by 2.4%, and imports increased by 0.3%, the General Administration of Customs stated that the slowdown in exports is a normal short-term data fluctuation.

Federal Reserve Governor Waller: The US economy may still be operating at a higher-than-expected speed, and future rate cuts need to be more cautious.

Nvidia set a new historical high for the first time in four months, with a more than 10% increase in two weeks this month, and Blackwell reignited investor enthusiasm. Huang Renxun's latest 10,000-word interview: AGI is coming soon, and AI will completely change productivity.

The 2024 Nobel Prize in Economic Sciences has been announced, with three American professors winning the award, revealing how institutions shape prosperity and global inequality.

Market Report

US Stocks: The Dow Jones Industrial Average rose by 0.47%, the S&P 500 Index rose by 0.77%, and the NASDAQ rose by 0.87%.

European Stocks: The Euro STOXX 600 Index closed up by 0.53%. The German DAX 30 Index closed up by 0.69%. The French CAC 40 Index closed up by 0.32%.

A-Shares: The Shanghai Composite Index closed up by 2.07%, the Shenzhen Component Index rose by 2.65%, and the ChiNext Index rose by 2.6%.

Bond Market: US Treasury bonds were closed. The yield on German 10-year government bonds rose by 0.9 basis points, reporting 2.275%. The yield on two-year German bonds rose by 2.2 basis points, reporting 2.257%.Commodities: WTI November crude oil futures closed down $1.73, a decrease of 2.29%, at $73.83 per barrel. Brent December crude oil futures closed down $1.58, a decrease of 2%, at $77.46 per barrel. COMEX gold futures fell by 0.45%, reporting $2664.30 per ounce. COMEX silver futures fell by 1.15%, reporting $31.390 per ounce. COMEX copper futures fell by 2%, reporting $4.4037 per pound. London tin and zinc closed down by approximately 2.3%.

News Details

Global Highlights

China's new social financing in September was 3.76 trillion yuan, with new RMB loans of 1.59 trillion yuan. The stock market rebound led to a rise in M2 growth rate to 6.8%. The M1 money supply continued to decline, and the stock market rebound led to a rise in M2 growth rate to 6.8%, with the negative gap between M1 and M2 growth rates widening slightly.

Recently, the phenomenon of residents repaying loans in advance has decreased. After the announcement of several financial policies supporting the real estate market, such as reducing the interest rates on existing mortgages and unifying the down payment ratio for mortgages, the number of visitors and subscriptions for most first-tier city property projects increased marginally, and the situation of residents repaying their mortgages in advance has decreased. A branch of a state-owned major bank in Shenzhen reported that since September 25th, the average daily application volume for early repayment of personal mortgages has decreased by 60% compared to the average level in the first half of September.

China's coal imports in September set a historical record high, with soybeans increasing by nearly 60% year-on-year, and natural gas and integrated circuit imports leading the growth; exports in September increased by 2.4% in US dollar terms, while imports increased by 0.3%. The General Administration of Customs: The slowdown in exports is a normal short-term data fluctuation.

In September, China's coal imports reached a historical record high, while crude oil imports decreased by 0.6% year-on-year. The import volumes of soybeans, natural gas, and integrated circuits led the growth, with steel imports experiencing the largest decline.

The General Administration of Customs stated that the export growth rate in September did indeed slow down. Preliminary analysis mainly attributes this to some short-term occasional factors. Extreme weather, the recent global shipping difficulties, and the high base of the same period last year all had a certain impact on September's exports. In the first three quarters of this year, exports of integrated circuits, automobiles, and home appliances increased by 22%, 22.5%, and 15.5%, respectively.

Federal Reserve Governor Waller: The US economy may still be operating at a speed higher than expected, and future rate cuts need to be more cautious. The highly influential Federal Reserve Governor Waller hinted that future rate cuts will be smaller than the significant cuts in September. He stated that regardless of recent events, his basic view remains to gradually lower the policy interest rate. Waller expects that due to the impact of hurricanes and strikes, the United States may lose 100,000 non-farm jobs in October. On the same day, Kashkari, a 2026 voter, indicated that it might be appropriate for the Federal Reserve to further moderately lower the interest rate.Nvidia has hit a record high for the first time in four months, with shares rising over 10% in just two weeks this month, as Blackwell reignites investor enthusiasm. At the beginning of this month, Huang Renxun stated that the Blackwell chips are now in full production, with demand being "crazy"; Morgan Stanley's report last week indicated that the Blackwell chips are expected to be sold out within the next 12 months, and the prospects for a boost in long-term chip demand following the release of the inference model o1 by OpenAI are optimistic; Nvidia's chip customer OpenAI completed a massive financing round of $6.6 billion at the beginning of the month, and its foundry partner TSMC's sales exceeded expectations, both of which are positive for Nvidia; last week, a wave of bullish option purchases showed that investors are betting on Nvidia's stock price being up to 40% higher than last Friday's closing price by next March.

Huang Renxun's latest ten-thousand-word interview: AGI is imminent, and AI will completely change productivity. The flywheel of machine learning is the most important. Simply having powerful GPUs does not guarantee a company's success in the AI field.

The 2024 Nobel Prize in Economic Sciences has been announced, with three American professors winning the award, revealing how institutions shape prosperity and global inequality.

The theories of the three winners have proven the importance of social institutions to a nation's prosperity. Global inequality is largely caused by differences in average income among countries. But why are some countries poor while others prosper? Why is the gap between poor and rich countries so persistent?

Nobel laureate Acemoglu: Does not agree with overly optimistic predictions about AI driving economic growth. Acemoglu believes that generative artificial intelligence is a promising technology, but he is skeptical about some overly optimistic predictions surrounding AI's impact on productivity and economic growth. In a paper previously published by the National Bureau of Economic Research, he pointed out that the productivity increase brought about by future AI advancements may not be significant, estimating that AI's contribution to the growth of total factor productivity (TFP) over the next decade will not exceed 0.66%.

Overseas macro

Expectations for a rapid interest rate cut in the United States have cooled, and the market is now betting on "one more cut this year, and stopping rate cuts at the beginning of next year." Due to the September CPI exceeding expectations across the board, the bond market expects the Federal Reserve to cut interest rates by only 45 basis points this year, while the options market is betting on only one more rate cut this year, and it may even pause rate cuts after a 25 basis point cut this year until the beginning of next year. The MOVE index, which measures the volatility of expected yields on U.S. Treasury bonds, has soared to its highest point since January.

Former Vice Chairman of the Federal Reserve: The neutral interest rate will rise moderately, and the U.S. Treasury yield curve will continue to steepen. Richard believes that the neutral policy interest rate may rise from the pre-pandemic 0.5%, but he expects the increase to be moderate. What is more noteworthy is the steepening of the U.S. Treasury yield curve, with the term premium currently being positive and likely to continue to rise.

No need to replace Powell, Trump can still control the Federal Reserve? Trump's ambition to intervene in the Federal Reserve is becoming more apparent. Analysis points out that once Trump is elected, he may nominate a "shadow" Federal Reserve Chairman, abolish the Federal Reserve's "dual mandate" to focus solely on controlling inflation, and attempt to reshape the Federal Reserve system.

After selling for eight consecutive weeks, hedge funds are buying back into U.S. stocks at the fastest pace since 2021. The U.S. stock market is experiencing active buying and market rallies, but the high valuation of the market is a worrying issue that could trigger future adjustments.Don't be misled by Shigeru Ishiba; the market may be underestimating the probability of interest rate hikes in Japan. Barclays suggests that Ishiba's moderate remarks reflect his current low approval ratings. Should the LDP-Komeito coalition win a majority in the Diet in the election, Ishiba's dovish rhetoric may diminish, and market expectations for a Bank of Japan rate hike could strengthen. It is anticipated that the Bank of Japan will raise rates by 25 basis points in December of this year or January next year, followed by another 25 basis point increase in July, bringing the interest rate to 0.75%.

OPEC has lowered its global oil demand growth forecast for the third consecutive month. Even after three consecutive months of reductions, OPEC's estimates for global oil demand are more optimistic than Wall Street's expectations. Although conflicts in the Middle East have driven up crude oil prices, OPEC's efforts to boost oil prices have been affected by countries such as Iraq, Kazakhstan, and Russia failing to fulfill their promised production cuts.

Overseas Companies

Another milestone for human aviation, why is SpaceX's "chopsticks recovery" important? The "chopsticks catching rocket" is a significant milestone towards the goal of making Starship a fully reusable rocket system, with Musk previously predicting a success rate of only 50%. This recovery method greatly reduces launch preparation time and is expected to become an efficient solution for rocket reuse.

OpenAI faces internal and external challenges, with departing executives attempting to poach talent, and Google's "mini GPT" gaining popularity. Media reports indicate that former OpenAI Chief Technology Officer Mira Murati is trying to recruit from OpenAI for her own project. With Liam Fedus replacing the recently departed Vice President Barret Zoph as the head of the later training team, OpenAI's R&D team is currently in turmoil. Moreover, Google's previously released "Audio Overview" AI podcast generator, dubbed "mini GPT," has unexpectedly become popular on social networks, adding competitive pressure to OpenAI.

Low demand and a sharp decrease in applications make Apple's headset Vision Pro "cooler and cooler." The main reason for the sharp decrease in Vision Pro applications is its high starting price of $3,499. Ming-Chi Kuo revealed that Apple has reduced this year's Vision Pro shipments from 700,000 to 800,000 units to 400,000 to 450,000 units. Some analyses suggest that to escape the current predicament, Vision Pro needs a "killer app."

Buffett increases his stake in satellite broadcaster SiriusXM, raising his ownership percentage to 32%. Last week, Buffett's Berkshire Hathaway Inc. spent about $87 million on several transactions to purchase approximately 3.6 million shares of SiriusXM, increasing its ownership percentage to 32%. Despite SiriusXM facing issues of user loss and insufficient growth potential, Berkshire may have seen opportunities in merger arbitrage, thus choosing to continue investing. The news of the increase caused SiriusXM's stock price to rise by more than 9.3% at one point during Monday's trading.

In order to "mow the Indian lawn," two American quantitative giants have taken their dispute to court. One strategy, two traders, earned $1 billion in a year. According to the lawsuit documents, Jane Street accuses two former employees who defected to Millennium Management of stealing highly confidential and "extremely valuable" Indian market trading strategies.