Breakfast | Tesla ignites North American price war, SMIC changes leadership for the second time this year
The "slow bull" trend continues in the US stock market, with Tesla rising over 3% and reaching its highest level in ten months after five consecutive days of gains. Apple and Nvidia both closed at record highs. Microsoft is in negotiations with Activision Blizzard to extend their acquisition contract. Ford significantly reduced the price of the electric F-150 Lightning truck. Tesla is laying off hundreds of employees at its German factory while planning to double the size of its Berlin plant. Taobao has launched a new version, considered the most significant update in three years. Semiconductor Manufacturing International Corporation (SMIC) experienced a major personnel shakeup, with its second leadership change this year. The newly appointed chairman, Liu Xunfeng, has a strong background in large funds. China Evergrande issued four announcements late at night, reporting a staggering loss of 812 billion yuan over the past two years and a total debt of 2.4 trillion yuan. Prosus, a major shareholder of Tencent, is expected to see a 2%-3% annual decrease in its holdings during the buyback period. The global FinTech company financing in the first half of the year was "halved" compared to the same period last year.
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Market Overview
US stock index futures slightly down, Nasdaq futures down 0.08%
Investors are waiting for the second-quarter earnings reports of major financial institutions such as Bank of America, Morgan Stanley, Goldman Sachs, as well as IBM, United Airlines, tech giants Tesla and Netflix, which are expected to show a year-on-year decline of over 7% in the earnings of S&P 500 constituents. The US stock market closed near the daily high, with the S&P and Nasdaq rising for the fifth consecutive trading day, up 0.39% and 0.93% respectively. The Dow Jones rose for the sixth consecutive day, up 0.22%. The Russell 2000 index rose for the sixth day out of seven, up 1.04%.
Most of the star tech stocks rose. Meta slightly up, Netflix up nearly 2%, Apple up 1.7% to a record high, Microsoft slightly up to a one-month high, Amazon down 0.8%, Google A down 0.6%, Tesla up over 3% to a ten-month high.
Chip stocks rebounded. The Philadelphia Semiconductor Index rose for the sixth day out of seven. AMD turned up 2%, Intel up 3.7%, both to a one-month high. Nvidia rose over 2% to a new all-time high.
Most Chinese concept stocks fell, JD.com down 1%, Baidu turned up 0.3%, Pinduoduo down 0.5%. Alibaba fell over 1%, TENCENT ADR down 0.4%, Bilibili down 0.6%, NIO and XPeng Motors down 3% and then turned up over 0.2%, Li Auto up over 3%.
Top Stocks
Microsoft is negotiating with Activision Blizzard to extend the acquisition agreement
Microsoft is in talks with Activision Blizzard to extend the acquisition contract, provided that both parties can overcome regulatory obstacles. The expiration of the contract will not automatically result in the failure of the transaction, but it gives both companies the right to withdraw from the deal at any time. The UK is the only major jurisdiction that prohibits this transaction.
As the price war of Tesla electric vehicles heats up in North America, Ford Motor Company has significantly reduced the price of its popular electric F-150 Lightning truck, with a price reduction of nearly 17% for the base model.
**TENCENT's major shareholder Prosus expects a 2%-3% annual reduction in its holdings of TENCENT during the buyback period, which is expected to decrease to around 24% to 25% by the end of this year.Tesla Cuts Hundreds of Jobs at German Factory
At the same time, Tesla plans to double the size of its factory near Berlin and produce 1 million electric vehicles per year, which could make it the largest car manufacturing factory in Germany.
Tencent Music's Chief Strategy Officer, Ye Zhoudong, Resigns
Xiaomi's Vice President of ToB Business, Bai Peng, Recently Left Xiaomi
SMIC Shakes Up Its Management for the Second Time This Year
Due to work adjustments, Gao Yonggang resigned from the positions of Chairman of the Board, Executive Director, and Chairman of the Nomination Committee. All positions will be taken over by Liu Xunfeng, Vice Chairman, Executive Director, and member of the Nomination Committee. The change will take effect from July 17. Gao Yonggang officially served as Chairman for only 16 months, while Liu Xunfeng's appointment to the SMIC Board took only a few months.
"Wood Sister" Invests in AI Stocks Other Than NVIDIA, Raises Long-Term Target Price for Bitcoin to $1.5 Million
Cathy Wood, founder of Ark Invest, said that NVIDIA is now an "obvious" bet on AI, and Tesla is the "biggest AI investment opportunity." She also raised the long-term target price for Bitcoin from $1 million to $1.5 million and is "very optimistic" about Coinbase.
NetEase Cloud Music Launches "Private DJ" Feature in Internal Testing
The "Private DJ" feature is an innovative upgrade based on the song recommendation algorithm, providing intelligent song interpretation services.
China Evergrande Issues 4 Announcements Late at Night, Reports a Huge Loss of 812 billion Yuan in Two Years, with Liabilities of 24 trillion Yuan2021 revenue was RMB 250.1 billion, with a gross loss of RMB 18.45 billion. In 2022, revenue reached RMB 230.7 billion, with a gross profit of RMB 24.99 billion. The operating loss for the year was RMB 43.39 billion, and the total net loss, including losses related to land recovery, impairment losses on financial assets, and other non-operating losses, amounted to RMB 69.37 billion, resulting in a net loss of RMB 125.81 billion. The total liabilities of the group amounted to RMB 2,437.41 billion, which decreased to RMB 1,716.39 billion after excluding contractual liabilities of RMB 721.02 billion.
CHENMING PAPER: Risks in the ownership of B-shares and H-shares by the controlling shareholder**
CHENMING PAPER stated that there may be risks associated with the ownership of B-shares and H-shares by its wholly-owned subsidiary, Chenming Holdings (Hong Kong) Limited, in relation to stock financing transactions with overseas lenders.
Code-named "Night Taobao," it is considered the most significant upgrade of Taobao in the past three years.
Macro and Strategy
Yellen reiterates that the US will not experience an economic recession
US Treasury Secretary Yellen stated that although the US economic growth has slowed down, the labor market remains strong, and she does not believe that an economic recession will occur. The US has made progress in reducing inflation.
White House economic advisor Bernstein: Inflation is showing signs of easing, but the work to combat inflation is not yet complete.
Goldman Sachs believes that the Nasdaq 100 will still be overly concentrated, and the impact on affected stocks will be limited. Nvidia and Microsoft will experience the largest decrease in weight, both being reduced by 3 percentage points. Microsoft will drop from the top position to the second-largest component, while Apple will rise to the first position. Broadcom will experience the largest increase in weight among the stocks with increased weight.
Goldman Sachs and the Fed take a different stance: Expect one more rate hike this year, lower the probability of a US economic recession to 20%Most central bank policymakers expect two more interest rate hikes this year. But Wall Street is increasingly skeptical of this expectation.
CPPCC members and experts such as Ning Jizhe, Lin Yifu, and Yi Gang delivered speeches. They believe that the overall economic performance of China is improving, with steady recovery in market demand and continuous increase in production supply. It is necessary to maintain strategic stability, focus on stabilizing growth, ensuring people's livelihood, and preventing risks, in order to promote sustained improvement in China's economic performance.
In addition to the National Development and Reform Commission, multiple ministries and local governments have also taken collective actions to support and assist private enterprises. Industry insiders believe that this timing is crucial for economic recovery.
Hong Kong Monetary Authority Injects Liquidity into the Banking Sector
The Hong Kong Monetary Authority provided HKD 3.89 billion in loans to the banking sector through its discount window, surpassing the level of HKD 3.77 billion on May 29 and reaching the highest level since January 2021.
Global FinTech Funding in the First Half of the Year "Halved" YoY
According to S&P Global, global FinTech companies raised USD 23 billion in funding in the first half of the year, a 49% decrease compared to the same period last year. Seed funding decreased by 12%, early-stage funding decreased by 14%, and funding for growth-stage and mature-stage startups decreased by 43% and 66% respectively.