Market Overview

The U.S. September PPI inflation remained unchanged month-on-month, indicating further cooling of inflation, alleviating anxiety brought by CPI, and supporting the Federal Reserve's rate cut next month. The S&P and Dow Jones reached new highs, with the S&P closing above 5,800 points for the first time, and the Dow Jones rising nearly 1%. After the opening of the U.S. earnings season, the bank index rose by 3%, and the U.S. stock indices all increased by more than 1% for the week, with the S&P gaining for five consecutive weeks. Tesla fell nearly 9% and dropped nearly 13% for the week, while Nvidia turned down on Friday but still rose nearly 8% for the week.

Chinese concept stocks opened low and closed high, with the index falling 1.9% and then closing up nearly 1%, but still falling nearly 7% for the week. The FTSE A50 futures rose more than 3% at night. "NIO, XPeng, and Li Auto" fell more than 3% and then turned up. Tiger Brokers rose more than 18% and then closed up more than 6%. The Chinese yuan rose 260 points for the week.

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The 10-year U.S. Treasury yield rose by 10 basis points for the week. The U.S. dollar index fell slightly on Friday, detaching from its eight-week high, but still rose by 0.3% for the week.

Oil prices fell slightly on Friday but rose for two consecutive weeks. Gold rose by more than 1%, rising for two consecutive days, and slightly turned up for the week. Bitcoin broke through $63,000, rebounding by $4,000 from the previous day's low.

In the Asian session, the three major A-share indices all closed lower, with the ChiNext index falling by 5%. Cross-border payment concept stocks rose against the trend, while semiconductor stocks led the decline.

News Highlights

The State Council Information Office will hold a press conference, where the Minister of Finance, Lan Fu'an, will introduce the situation related to "Increasing the Counter-cyclical Adjustment Strength of Fiscal Policy and Promoting High-Quality Economic Development" and answer questions from journalists.

China Securities Regulatory Commission and other departments: Strictly regulate futures trading behavior, and study the inclusion of stock index futures and Treasury futures in the opening up of specific varieties to the outside world.Regulatory clearance sales reduction, Shanghai and Shenzhen supervision, swift action taken.

Tesla Cybercab and Robovan make their debuts, both without steering wheels and pedals, with the former priced under $30,000. Musk's Robotaxi report fails to impress the market: lacking key details and avoiding regulatory issues. Tesla's stock drops nearly 9% on Friday.

Gasoline prices decline, US September PPI remains unchanged month-over-month, inflation further cools down. Goldman Sachs estimates that the Federal Reserve may have essentially achieved its 2% inflation target.

JPMorgan Chase Q3 revenue and profit both exceed expectations, with unexpected growth in net interest income and excellent investment banking performance. BlackRock Q3 report exceeds expectations, assets under management soar to $11.5 trillion, stock price hits a historical high.

US media: After a call between US and Israeli leaders, both sides are closer to reaching a consensus on Israel's plan to retaliate against Iran. Sources say Gulf countries are lobbying the US on the Israeli-Iran situation.

Market closing report

US stocks: Dow Jones Industrial Average up 0.97%, S&P 500 up 0.61%, Nasdaq up 0.33%.

European stocks: STOXX Europe 600 Index closes up 0.55%, up 0.66% for the week. DAX 30 Index closes up 0.85%. CAC 40 Index closes up 0.48%. FTSE 100 Index closes up 0.19%.

A-shares: Shanghai Composite down 2.55%, Shenzhen Component Index down 3.92%, ChiNext Index down 5.06%.Bond Market: The U.S. 10-year benchmark Treasury yield rose by 2.57 basis points to 4.0865%, accumulating an increase of 12.52 basis points for the week. The two-year U.S. Treasury yield fell by 0.82 basis points to 3.9491%, with a weekly accumulation of a 2.73 basis point increase.

Commodities: WTI November crude oil futures settled down by $0.29, a decrease of 0.38%, at $75.56 per barrel. Brent December crude oil futures settled down by $0.36, a decrease of 0.45%, at $79.04 per barrel. COMEX gold futures rose by 1.31%, reporting $2,673.90 per ounce, with a weekly accumulation of a 0.21% increase. COMEX silver futures rose by 1.24%, reporting $31.755 per ounce, with a weekly accumulation of a 2.03% decrease. On Friday, London zinc closed up by 2.2%, while London lead fell by more than 2.4% for the week, and London copper and London tin both fell by more than 1%.

News Details

Global Highlights

China Securities Regulatory Commission and other departments: Strictly regulate futures trading behavior, and study the inclusion of stock index futures and Treasury futures in the opening up of specific varieties. The General Office of the State Council stated that it will orderly promote the inclusion of eligible commodity futures and options in the range of opening up to foreign investors, allowing qualified foreign investors to participate in more commodity futures and options trading. It will study the inclusion of stock index futures and Treasury futures in the opening up of specific varieties. Support deepening product and business cooperation between domestic and foreign futures exchanges, and allow foreign futures exchanges to launch more financial products pegged to domestic futures prices.

Illegal liquidation reduction, Shanghai and Shenzhen supervision, rapid response! On the evening of October 11th, the Shanghai Securities Regulatory Bureau's official website published an article stating that it had decided to order Wang Xiaoqing, Sun Xiaowen, and Wei Changwei to repurchase shares reduced in violation of regulations and to pay the price difference to the listed company. On the same evening, the Shenzhen Securities Regulatory Bureau's official website published an article stating that it had decided to order Wei Changwei to repurchase shares reduced in violation of regulations and to pay the price difference to the listed company.

Tesla Cybercab and Robovan made their debuts, both without steering wheels and pedals, with the former priced below $30,000. Musk's Robotaxi answer did not satisfy the market: lacking key details and avoiding regulatory issues. Tesla fell nearly 9% on Friday.

Musk introduced that Cybercab will introduce inductive charging technology, promoting travel costs to 5-10 cents per mile, and will be put into production in 2026; the driverless bus Robovan can carry up to 20 people at a time; the mass production price of the humanoid robot Optimus is $20,000-$30,000.

When people came back to their senses from the excitement of the morning press conference, they found that Tesla had only made an empty promise. The Wall Street Journal stated that Musk "hardly provided new details about Tesla's autonomous taxi business model, such as predictions of revenue or market size."Tesla's product launch has given Uber a boost, with its stock price surging by over 10% to hit a new record high, while Lyft also saw significant gains. Citigroup stated that the Tesla event has increased their confidence in Uber's stock, as there was little detail on the sales and ride-hailing app specifics of the Cybercab; they believe Tesla may collaborate with Uber in future sales endeavors.

With gasoline prices falling, the U.S. Producer Price Index (PPI) for September remained unchanged from the previous month, indicating further cooling of inflation. The PPI, excluding the more volatile food and energy categories, rose by 0.2% month-on-month, in line with expectations and lower than the previous 0.3%. Institutional analysis points out that the flat PPI in September suggests that the inflation outlook remains favorable, supporting the view that the Federal Reserve will cut interest rates again next month.

Goldman Sachs: The Federal Reserve may have essentially achieved its 2% inflation target. According to Goldman Sachs' latest forecast released on Friday, the U.S. Department of Commerce's September Personal Consumption Expenditures Price Index will show an annual increase of 2.04%. If Goldman Sachs' prediction is correct, this figure would round to 2%, aligning perfectly with the Federal Reserve's long-term inflation target.

JPMorgan Chase's Q3 revenue and profit both exceeded expectations, with unexpected growth in net interest income and outstanding investment banking performance; BlackRock's Q3 report exceeded expectations, with assets under management soaring to $11.5 trillion, and stock prices reaching a new historical high.

JPMorgan Chase's investment banking revenue in Q3 surged by 31%, and under the Federal Reserve's easing cycle, net interest income also unexpectedly grew by 3%. However, CEO Jamie Dimon's view on the economic outlook is somewhat bleak, believing that escalating geopolitical risks could have a profound impact on short-term economic outcomes and even the course of history.

BlackRock's assets under management skyrocketed to $11.5 trillion in Q3. This month, BlackRock also completed the acquisition of Global Infrastructure Partners.

Wall Street's major banks fired the first shot of the earnings season with strong performance, and analysis suggests that a soft landing of the U.S. economy may have been achieved. Under the premise of an easing cycle and a soft landing, financial stocks often perform well.

U.S. media: After a phone call between U.S. and Israeli leaders, the two sides are closer to reaching a consensus on Israel's plan to retaliate against Iran. Sources say Gulf states are lobbying the U.S. over the Israeli-Iran situation.

According to Global Times, Axios News Network reported that the Biden administration has currently accepted the situation that "Israel will soon launch a large-scale attack on Iran," but is concerned that Israel's attacks on certain targets could sharply escalate regional tensions. The U.S. and Israel will continue to consult on the latter's plan to retaliate against Iran in the coming days.

Gulf states such as Saudi Arabia are lobbying the U.S. in hopes of preventing Israel from striking Iranian oil facilities, fearing that if the conflict continues to escalate, the flames of war will spread to themselves. These Gulf states have also informed the U.S. that if Israel launches an attack on Iran, they will not open their airspace to Israel.Domestic Macro

A significant forum is about to be held, with many attendees from the "one line, one bureau, one meeting." Li Yunze, Secretary of the Party Committee and Director of the Financial Regulatory General Administration, will attend the opening ceremony of this Financial Street Forum Annual Conference and deliver a speech. Wu Qing, Secretary of the Party Committee and Chairman of the China Securities Regulatory Commission (CSRC), will attend the opening ceremony of the 2024 Financial Street Forum Annual Conference and deliver a keynote speech.

Historical experience of incremental fiscal policy. Shenwan Hongyuan believes that for localities, incremental fiscal policies are mostly used to increase investment in infrastructure and other fields, and to support "three guarantees" work. For enterprises, the intensification of fiscal policy is mainly reflected in large-scale value-added tax (VAT) refunds, tax cuts and fee reductions, and phased exemptions of social insurance costs for enterprises. In the past, fiscal policy intensification directly subsidized residents, which could be divided into personal income tax adjustments and optimizations, social security support subsidies, and consumption promotion subsidies.

Wall Street veteran: A-shares will rise by another 50%, and hedge funds that sold off this week will regret it. Jeff deGraaf of Renaissance Macro Research said that the market and policy are driving in both directions. The introduction of a series of supportive measures for the capital market in China is not a coincidence. The current Chinese policy for the market is similar to the "Draghi moment" during the euro crisis.

Historical review of market reversals. Guolian Securities pointed out that historically, market bottom rebounds are often due to two major reasons: 1) the economic bottom stabilizes; 2) liquidity expands rapidly. The rebound of this market may be a superposition of the two states. Regardless of whether it is futures contango or turnover rate, about two weeks after market sentiment falls from its peak, the market is often likely to see a top. Historically, in the short term, the market is often dominated by oversold rebounds, lasting about a month; if the trend is sustainable, the core reason may be that the fundamentals have completely stabilized and rebounded, and the market will differentiate as the prosperity of various industries differentiates.

Overseas Macro

U.S. consumer confidence unexpectedly declines, burdened by high living costs, and one-year inflation expectations rise. The University of Michigan Consumer Confidence Index unexpectedly fell for the first time in three months, with short-term inflation expectations rising to 2.9%. The continuous dissatisfaction of consumers with high living costs offset the optimistic view of the job market.

The U.S. financial market is facing another severe test: a former Federal Reserve trader warns that the repurchase crisis is imminent. Quantitative tightening has not ended, and the upcoming new round of U.S. Treasury issuance will impact the market. Analysts believe that the exhaustion of reverse repurchase is just a matter of time, especially if the U.S. Treasury injects Treasury bonds into the system again during the next crisis, the total reserves may fall below $3 trillion, and the market may face another liquidity crisis.

Goldman Sachs' top trader said there will be "noise in the next month," and the U.S. economy may "not land." Pasquariello, head of Goldman Sachs' hedge fund research, mentioned some key market variables, saying that Goldman Sachs' baseline forecast is that the Federal Reserve will cut interest rates by 25 basis points at each of the remaining two meetings this year; after selling U.S. technology stocks for five consecutive months, hedge funds bought heavily last week and even more quickly this week, and technology stocks are about to enter the earnings season; the tense situation will continue until the results of the U.S. election in November are clear.

After the U.S. September CPI was announced, traders instead increased bets on interest rate cuts in November. Although the September non-farm employment report and consumer price index were higher than expected, it is important to see whether individual data points form a larger trend, or whether they are just temporary "unstable."After two months of stagnation, the UK economy finally rebounded with a GDP increase of 0.2% month-on-month in August. Although the economic recovery in August brought a glimmer of hope to the UK, the future economic trend still faces many challenges. The government's fiscal policy and the global economic environment will greatly affect the continued recovery of the UK economy.

The Bank of Korea turned around and cut interest rates by 25 basis points, the first time in four years. After the inflation rate fell to a three-year low, the Bank of Korea cut interest rates by 25 basis points as expected, also the first cut since 2020. J.P. Morgan predicts that the Bank of Korea will cut interest rates for three consecutive quarters next, eventually reducing the benchmark interest rate to 2.5%.

Foreign capital is flowing out crazily, and the exchange rate of the Indian rupee against the US dollar has broken through 84, setting a new low.

Hedge funds are reducing their short positions in Brent crude oil at the fastest pace in nearly eight years.

Overseas companies

Why can Bloomberg terminals "monopolize" the financial market for forty years? Seven core competencies cannot be ignored. Bloomberg has a database of stock, bond, and foreign exchange markets and holds a monopolistic position. At the same time, its strong processing ability can send real-time price information of tens of thousands of stocks to 350,000 users within milliseconds. In the financial circle, Bloomberg has become an indispensable existence and is almost regarded as the preferred financial tool.

Where has overseas AI trading gone? Goldman Sachs: Profits, not valuations, are driving the market, and platform companies need to be focused on in the future. Goldman Sachs divides AI-related investments into four main stages and believes that AI trading has entered the second stage, and the profitability of companies will gradually become the main driver of stock price increases. In the third stage, AI-driven revenue growth is difficult to achieve in the short term, but platform stocks may stand out.

In the "aesthetic fatigue" of AI, the singularity is quietly coming. OpenAI's o1 model, after reinforcement learning, has the ability to "self-evolve" and is accelerating the development of AI towards the "singularity". Altman believes that the progress curve of the new paradigm of AI will be steeper, and large models with evolutionary capabilities will achieve the leap to the next level more quickly.

German luxury cars collectively failed, and Volkswagen's global sales fell by 7%. The decline in the European and Asian markets is the most severe, with the sales of the electric car model Taycan plummeting by 47%. In the luxury car field, other European high-end brands such as BMW and Mercedes-Benz are also experiencing similar sales pressure.

Challenging the "weight loss miracle drug", Danish star pharmaceutical company Zealand: The research and development of products is expected to replace GLP-1.