Breakfast | The earnings report week for star tech stocks is coming soon! The U.S. government shutdown is expected to end

Market Overview

Despite U.S. consumer confidence nearing record lows, hopes for an end to the U.S. government shutdown boosted U.S. stocks significantly from intraday lows during Friday's closing. The Nasdaq still recorded its worst weekly performance since April, and the S&P 500 briefly fell below the 50-day moving average.

Microsoft's eight consecutive declines mark the longest losing streak since 2011. Tesla fell over 3.6% after the shareholder meeting approved Musk's trillion-dollar compensation plan. Nvidia dropped 7% over the week.

After the release of U.S. consumer confidence, the yield on the 10-year U.S. Treasury bond briefly erased earlier gains but still closed up 1.35 basis points. This week, the U.S. Treasury will issue a large amount of government bonds.

The dollar fell for three consecutive days. Cryptocurrencies rebounded sharply, with Bitcoin briefly dropping below $100,000, then rising over 4.6% from its daily low. Ethereum rose over 4.3%, returning to $3,400.

Gold fluctuated around $4,000 during the day, ending a two-week losing streak. Oil prices rose and then fell back, with U.S. oil briefly climbing back above $60, accumulating a drop of over 1.7% for the week.

Key News

China's October CPI rose 0.2% year-on-year, core CPI reached its highest since March 2024, and PPI rose month-on-month for the first time this year.

Ministry of Commerce: The source and responsibility for the current global semiconductor supply chain chaos lies with the Netherlands. A spokesperson for the Ministry of Commerce responded to reporters regarding the ASML semiconductor issue: China agrees to the Netherlands' request to send officials to China for consultations.

Amidst bloodshed in the cryptocurrency market, another stablecoin has "de-pegged." The gains of the first ten months of this year were wiped out in just one month in the crypto market.

This week, the U.S. market is also struggling? The wave of U.S. bond issuance is coming, liquidity is "getting worse." Non-farm payrolls are "gone," and this week's U.S. CPI is also going to be "gone."

SNAP benefits have been interrupted for the first time in 60 years! The U.S. Supreme Court approved Trump's temporary withholding of $4 billion in food aid.

Jensen Huang personally visited TSMC to "demand production capacity," stating, "Without TSMC, there is no Nvidia."

Google's second-generation Nano Banana has been revealed! One-click calculus simulation, ending the PS era.

Market Closing Report

U.S. and European Stock Markets: The S&P 500 rose 0.13%, closing at 6,728.80 points, with a weekly drop of 1.63%. The Dow Jones increased by 0.16%, closing at 46,987.10 points, with a weekly drop of 1.21%. The Nasdaq fell 0.22%, closing at 23,004.538 points, with a weekly drop of 3.04%. The European STOXX 600 index closed down 0.55%, at 564.79 points, with a weekly decline of 1.24%.

A-shares: The Shanghai Composite Index closed at 3,997.56 points, down 0.25%; the Shenzhen Component Index closed at 13,404.06 points, down 0.36%; the ChiNext Index closed at 3,208.21 points, down 0.51%Bond Market: The yield on the 10-year U.S. Treasury rose by 0.57 basis points to 4.0889%, with a cumulative increase of 1.14 basis points for the week. The yield on the 2-year U.S. Treasury remained unchanged at 3.5554%, with a cumulative decrease of 2.03 basis points for the week.

Commodities: COMEX gold futures rose by 0.41% to $4007.20 per ounce, with a cumulative increase of 0.27% for the week. WTI December crude oil futures closed up 0.54% at $59.75 per barrel, with a cumulative decrease of 2.02% for the week. Brent January crude oil futures closed up 0.39% at $63.63 per barrel, with a cumulative decrease of 1.76% for the week.

News Details

Global Highlights

China's October CPI rose 0.2% year-on-year, core CPI reached the highest level since March 2024, PPI rose month-on-month for the first time this year. In October, policies to expand domestic demand continued to take effect, combined with the National Day and Mid-Autumn Festival holidays, the CPI rose 0.2% month-on-month and 0.2% year-on-year. The core CPI, excluding food and energy prices, rose 1.2% year-on-year, marking the sixth consecutive month of increase. The PPI turned from flat to a rise of 0.1% month-on-month in October, marking the first increase this year, while the year-on-year decline continued to narrow.

• Citi Research macro analysis stated that the core CPI rose to 1.2% year-on-year in October, mainly due to three reasons: first, under the governance of anti-involution, rising upstream raw material prices have stabilized the prices of downstream consumer goods, such as in the automotive industry; second, active fiscal policies have driven a rebound in demand, leading to rapid price increases in related consumer goods, such as in the home appliance industry, with its CPI rebound independent of PPI; third, the impact of imported inflation, such as the surge in gold prices leading to significant increases in the prices of gold jewelry.

Ministry of Commerce: The source and responsibility for the current global semiconductor supply chain chaos lies with the Netherlands.

• Question: Recently, EU Commissioner for Trade and Economic Security Valdis Dombrovskis posted a statement regarding ASML Semiconductor on his personal social media account. What is the Ministry of Commerce's comment on this?
• Answer: The source and responsibility for the current global semiconductor supply chain chaos lies with the Netherlands. China has noted that the EU has stated it will work with the Netherlands and hopes the EU will further intensify its efforts to urge the Netherlands to withdraw relevant measures as soon as possible to ensure the normal supply of ASML semiconductor-related products. China, with a responsible attitude towards the security and stability of the global semiconductor supply chain, has already taken practical measures to exempt compliant exports for civilian useI want to emphasize that we welcome the European side to continue to exert influence and urge the Dutch side to correct its erroneous practices as soon as possible.

The spokesperson of the Ministry of Commerce answered reporters' questions regarding the ASML semiconductor issue: China agrees to the request for the Dutch Ministry of Economic Affairs to send personnel to China for consultations.

Ministry of Commerce: The second clause of the "Announcement on Strengthening Export Control of Relevant Dual-Use Items to the United States" is suspended. The Ministry of Commerce of China: Approved, from now until November 27, 2026, the second clause of the Ministry of Commerce Announcement No. 46 of 2024 ("Announcement on Strengthening Export Control of Relevant Dual-Use Items to the United States") is suspended.

As blood flows in the cryptocurrency circle, another stablecoin has "de-pegged". The severe de-pegging of USDX has triggered a chain crisis in DeFi, with major borrowers failing to repay, leading to urgent interventions by Lista DAO and PancakeSwap. Lista DAO initiated governance voting and executed liquidation to control risks, with MEV Capital and Re7 Labs named as involved in high-risk vaults. The price of USDX once fell to $0.11, exacerbating market panic.

• Continuously being bloodied! The gains in the first ten months of this year have been wiped out in just one month in the cryptocurrency circle. According to CoinGecko data, the total market value of cryptocurrencies reached a historical high of nearly $4.4 trillion on October 6, but plummeted by about 20% in the following month, leaving the year-to-date gain for the entire asset class at only 2.5%. This plunge coincided with concerns over the valuation of AI tech stocks, with meme stocks and alternative coins favored by retail investors experiencing even larger declines.

Is the U.S. market also having a tough time this week? A wave of U.S. Treasury issuance is coming, liquidity is "adding insult to injury". The U.S. Treasury will auction $125 billion in government bonds this week, along with about $40 billion in corporate bonds, concentrated in a shortened trading week due to the holiday, posing a severe test to market liquidity. To cope with the government shutdown, the Treasury has hoarded over $700 billion in cash, causing bank reserves to drop to their lowest level since 2021, making the current liquidity environment very fragile.

Non-farm payrolls are "gone," and this week's U.S. CPI is also going to be "gone," can the Federal Reserve "close its eyes and cut rates" in December? According to media reports, the U.S. Bureau of Labor Statistics has not only postponed the release of the CPI report but has even suspended the collection of offline data. Although the market still leans towards a rate cut in December, the lack of official data may give policymakers, who are concerned about a resurgence of inflation, a sufficient reason to maintain interest rates next month.

SNAP benefits interrupted for the first time in 60 years! The U.S. Supreme Court approves Trump's withholding of $4 billion in food aidThe U.S. Supreme Court has approved the Trump administration's temporary suspension of approximately $4 billion in SNAP benefits (commonly known as food stamps), leaving 42 million low-income individuals facing a livelihood crisis, marking the first interruption of the SNAP benefits program in 60 years. The significant political cost may push both parties to accelerate negotiations to end the government shutdown.

Jensen Huang personally visits TSMC to "demand capacity," stating "without TSMC, there is no NVIDIA". On November 8, Jensen Huang appeared at TSMC's annual sports meeting and stated that NVIDIA's business is "very strong and getting stronger month by month." Huang's main goal for this visit to Taiwan is to ensure capacity for advanced processes such as 3nm. TSMC CEO C.C. Wei confirmed that the company has received expansion requests and expects to continue achieving record sales growth.

Google's second-generation Nano Banana is out! One-click calculus simulation, ending the PS era. Google has launched the next generation AI image model Nano Banana 2, which supports rapid generation of 4K images and can perform multiple tasks such as solving calculus and generating complex interfaces, setting new benchmarks in character consistency, handwriting, and complex chart generation. It demonstrates powerful image generation and understanding capabilities.

Regarding the "AI bubble," "selected politics," and "overturning tariffs," from Bank of America Hartnett's judgment: "The top is a process, while the bottom is a moment". Bank of America strategist Michael Hartnett pointed out that the market top is slowly forming through three major signals: the credit spread of AI giants has widened from 50 basis points to 80 basis points, indicating a deteriorating financing environment; public dissatisfaction with the cost of living has triggered political pressure, which may lead to government intervention in prices; the Supreme Court may overturn current tariffs, if realized, it would weaken inflation expectations and benefit emerging markets. Although there are no comprehensive sell signals, it is recommended to short AI corporate bonds and go long on zero-coupon bonds as a hedge.

One year after Trump's victory, the market trends of "Trump 2.0" and "1.0" are highly similar, with the bad news being that the second year of a presidency usually sees the worst stock performance. On the anniversary of Trump's victory, market trends are highly similar to those during his first term: Bitcoin leads risk assets, emerging markets outperform U.S. stocks, and the dollar weakens. However, historical data shows that the second year of a presidential term is usually the worst for U.S. stocks; during the "Trump 1.0" period in 2018, market volatility surged and risk assets corrected, ringing alarm bells for the current market.

How will the market react if Trump's "reciprocal tariffs" are overturned? Market expectations for the Trump administration's victory in the tariff case have significantly cooled, with predictions showing the government's win probability dropping from about 40% to 27%Citigroup believes that if the court ultimately overturns the "reciprocal tariffs" imposed under the IEEPA, it could trigger a wave of trading activity, with short-term market reactions potentially including: a decline in inflation expectations, a rise in the stock market (especially small-cap stocks), and a strengthening of certain emerging market currencies (such as the Mexican peso and Brazilian real).

Domestic Macro

The State Council: Strengthen key core technology breakthroughs and promotion applications in the field of artificial intelligence, promote the application and standard construction of unmanned systems in land, sea, and air. The "Opinions" point out that it is necessary to strengthen key core technology breakthroughs and promotion applications in the field of artificial intelligence, accelerate the cultivation and opening of high-value application scenarios, and better meet the development needs in various fields such as technology, industry, consumption, people's livelihood, governance, and global cooperation. Promote the application and standard construction of unmanned systems in land, sea, and air, encourage the creation of application scenarios covering the entire space in cultural tourism, government affairs, logistics, satellite services, etc., and expand unmanned system application scenarios in industrial production, urban planning and governance, comprehensive three-dimensional transportation, public services, security protection, and agricultural production.

China's October exports in US dollars fell by 1.1% year-on-year, while imports rose by 1% year-on-year; Soybean imports hit a historical high for the same period, while imports of refined oil, natural gas, and coal saw both volume and price declines, and rare earth exports ended a three-month decline.

• Dongxing Securities believes that the main reason for the unexpected decline in exports is: first, the export misalignment in September-October last year, with October last year experiencing a seasonal increase that raised the base; second, a decline in exports to the EU after the easing of relations with Europe and the United States; third, the weakening of "rush to re-export" momentum at the end of the year, leading to a slowdown in exports to emerging markets such as ASEAN and Africa. Structurally, labor-intensive products continue to show negative growth, while high-tech products remain resilient.
• CICC believes that after excluding base effects, the two-year compound growth rate for September-October remains stable at 5.3%-5.5%. Exports of products such as ships and automobiles maintain resilience, while exports of electromechanical products generally decline. Imports increased by 1.0% year-on-year, influenced by both price and quantity declines. It is expected that with the base effect receding, exports in November will improve year-on-year.

The People's Bank of China increased its gold holdings by 30,000 ounces in October, marking the 12th consecutive month of increases!

What impact does the recent rise in commodity prices have on the A-share market? The recent rise in commodity prices has prompted the A-share market to trade ahead of the cyclical logic for 2026, with current price increases in coal, non-ferrous metals, and other resource products driving related sectors to strengthenThis market trend is essentially a rehearsal for the resonance of the policy cycles between China and the United States—China's "14th Five-Year Plan" kickoff coinciding with the U.S. midterm election year is expected to drive a rebound in commodity demand, making non-ferrous metals, steel, and building materials the most valuable allocation directions at present.

Domestic Companies/Industries

The World Internet Conference Blue Paper: Artificial Intelligence Empowers Development Across All Domains. The "China Internet Development Report 2025" and "World Internet Development Report 2025" blue papers were released on November 8 at the 2025 World Internet Conference in Wuzhen. The "China Internet Development Report 2025" suggests that artificial intelligence in China will show trends of rapid expansion in application scenarios, deepening user penetration, and continuous integration of industries, achieving a transition from point applications to all-domain empowerment, and becoming the core driving force for the intelligent upgrade of the real economy.

From Computing Power to Electric Power, China's Asset Repricing. The Guojin Strategy Team stated that the bottleneck in the development of the technology industry has shifted from computing power infrastructure led by the U.S. to China's more advantageous fields of electricity, manufacturing, and general infrastructure. This process is essentially a repricing of Chinese assets. Focus on three diffusion paths: first, internal price increases in electric power equipment; second, broader industrial chain diffusion: chemicals, glass fiber, automation equipment, metal materials, etc.; and the cost advantages of high-energy-consuming sectors.

When about 60% of Institutional Holdings are AI-related. CITIC Securities believes that during the subsequent portfolio adjustment process, a basic principle should be adhered to, which is to focus on sectors that have independent logic apart from the AI narrative, and where ROE is at a long-term bottom and continues to rise. From this perspective, moderately increasing exposure to chemicals, non-ferrous metals, and electric new energy sectors—industries that have been relatively quiet for a long time and are at historically low points in profitability and industry prosperity—is a better choice.

Goldman Sachs Research on "China's Robot Supply Chain" including Sanhua: Preparing for mass production of "humanoid robots" in the second half of 2026, with capacity planning reaching 100,000 to 1 million units per year. Goldman Sachs' research shows that although large-scale orders have not yet been obtained, Chinese humanoid robot suppliers have initiated a "capacity-first" strategy and have upgraded from parts supply to modular solutions. The industry will closely monitor milestones such as the release of Tesla's Optimus Generation 3 to verify the capacity digestion outlook.

Ant Group's Luo Ji: Ant has deployed a domestic computing power cluster on the scale of tens of thousands of cards, fully applied to security and risk control.

JD's "National Good Car" Aion UT super officially launched, with a minimum price of only 49,900 yuan.

Overseas Macro

U.S. Government Shutdown Now Has a Turning Point, Democrats Softening Stance, Republicans Reject but Acknowledge Progress. Senate Republicans rejected the Democrats' proposal to narrow the government shutdown demands to extending health insurance subsidies for one yearDuring the 38-day government shutdown, the subsidy issue of the Affordable Care Act (ACA) has been a focal point of debate. Senate Democratic Leader Chuck Schumer described his proposal as a "simple compromise plan," expected to pass the Senate "within hours." Republican Leader Mitch McConnell dismissed the proposal as "completely unworkable," but he also indicated that it shows progress in negotiations.

US tech stocks face the "worst week since April," with the "AI eight giants" losing $800 billion in market value in a week. Last week, the Nasdaq fell a cumulative 3%, marking its worst weekly performance since April. Among them, the market value of the eight leading companies most closely associated with AI evaporated by about $800 billion, with the total market value of all AI-related US companies losing nearly $1 trillion in a week. Market concerns about massive AI capital expenditures and industry prospects have intensified, leading to a sharp decline in investor sentiment.

• Microsoft experiences longest consecutive decline since 2011, AI investment doubts weigh on tech stocks. Since the release of its quarterly earnings report at the end of October, Microsoft’s stock price has not recorded a single positive trading day. Over the past eight days, the stock has fallen more than 8%, with a market value evaporation of over $300 billion, marking the longest decline since the nine-day drop that ended in November 2011.
• Goldman Sachs traders: Volatility at this time of year is a "normal phenomenon," nothing "abnormal". Goldman Sachs pointed out that the recent 5% pullback in US stocks is part of the normal fluctuations of the AI cycle, expecting a further 5-10% upside before the end of the year. This judgment is based on three major supports: AI investment is still in the early stages, institutional positions are not yet saturated; tech giants have robust balance sheets and over 20% profit growth; current valuations are fundamentally different from the internet bubble— the Nasdaq 100 index is valued at a 46% discount compared to that time, and listed companies generally generate strong free cash flow.

The most aggressive Wall Street investment bank: Powell "will not" cut interest rates again during his term. Bank of America believes that Powell's cautious remarks after the October rate cut mean that the threshold for initiating a rate cut in December has been raised, requiring data to "prove" its reasonableness rather than "refute" its necessity. Current alternative data shows that the labor market is gradually cooling, but there are no signs of sharp deterioration. This situation provides the Federal Reserve with a reason to pause rate cuts.

Report: South Korea plans to lower the highest tax rate on dividend income from 35% to 25%.

Overseas Companies

Not just hoping for government guarantees, OpenAI sent a letter to the Trump administration at the end of October, requesting to "expand tax deductions" to reduce data center costs. In the letter dated October 27, OpenAI requested the White House to expand the scope of a 35% manufacturing investment tax deduction from chip manufacturing to AI data centersAI server manufacturers and key components of the power grid such as transformers. Previously, comments from company executives regarding government "guarantee support" sparked controversy, but the U.S. government has ruled out the possibility of direct assistance.

The Tesla shareholder meeting failed to approve the investment in xAI. Is there still hope for the anticipated integration? Tesla shareholders showed a divide over whether to invest in Musk's xAI. Although there were more votes in favor than against, a large number of abstentions were counted as opposition, resulting in the proposal not being approved. While the proposal is not legally binding, the board stated it would consider supporting voices. The two companies already have business cooperation, and future integration remains uncertain.

Meta disclosed details about its $600 billion investment commitment in the U.S. Zuckerberg's Meta has been reported to earn huge profits from a massive amount of fraudulent advertisements, with about one-third of successful fraud cases in the U.S. related to it.

Pfizer wins, acquiring Metsera for $10 billion, defeating Novo Nordisk. Pfizer successfully acquired the weight-loss drug startup Metsera for $10 billion, beating Novo Nordisk with a premium of up to 159%. With FTC approval, Pfizer achieved a strategic breakthrough, positioning itself in the $100 billion weight-loss drug market and seizing the next generation of more effective and lower side-effect new drug tracks. The competitive storm among pharmaceutical giants is rapidly sweeping the global pharmaceutical industry.

Today's News Preview

The 8th China International Import Expo has concluded.

The U.S. Treasury will auction $125 billion in government bonds, with $58 billion in 3-year bonds to be sold on Monday.

The list of Hong Kong Stock Connect ETFs under the Shenzhen-Hong Kong Stock Connect will be adjusted, effective November 10, 2025.

Buffett's Thanksgiving letter to shareholders may be released.

CoreWeave and Beike will announce their earnings reports.

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