Breakfast | US stocks plummet! Tesla falls over 6%, leading the decline in tech stocks

Market Overview

Federal Reserve officials adopt a hawkish stance, with all three major U.S. stock indices posting their largest declines in a month, the Nasdaq fell over 2%, while the S&P and Dow Jones dropped over 1%; Disney, with disappointing quarterly earnings, fell nearly 8%, leading the decline among Dow components; Tesla dropped 6.6%, leading the tech giants; chip stocks and AI concept stocks overall plummeted, with the chip index falling nearly 4%, Nvidia down 3.6%, AMD down over 4%, Palantir down over 6%, and Oracle down over 4%; however, Cisco, a strong performer, rose 4.6%. The China concept index fell over 1%, marking a three-day decline, with Bilibili dropping nearly 5% and JD.com falling nearly 2% after earnings reports.

Investors are skeptical about the prospects of a Federal Reserve rate cut in December, leading to a decline in U.S. Treasury prices, with the yield on the ten-year U.S. Treasury moving away from a two-week low. The U.S. dollar index fell to a two-week low; the offshore yuan rose over 200 points during trading, breaking 7.10 to reach a two-week high. Cryptocurrencies have entered a bear market, with Bitcoin falling below the $100,000 mark, dropping nearly 6% to below $98,000, and Ethereum at one point falling over 10%.

Crude oil rebounded from a three-week low hit on Wednesday, rising over 1% during trading. Gold, after hitting a three-week high, turned to decline, at one point falling over 1%.

During the Asian session, both A-shares and Hong Kong stocks rose, with the Shanghai Composite Index reaching a ten-year high and the Hang Seng Index surpassing 27,000 points. Lithium batteries surged collectively, photovoltaic stocks rebounded strongly, and precious metals strengthened.

Key News

China's new social financing in October was 810 billion yuan, with new RMB loans of 220 billion yuan, and the M2-M1 spread widened.

The U.S. House of Representatives passed a temporary funding bill, ending the U.S. government shutdown and beginning a "long restart"; Trump's chief economic advisor Hassett stated that October will see half of the employment report, with no unemployment rate data, estimating that the government shutdown caused 60,000 job losses.

Federal Reserve officials adopted a hawkish tone before releasing significant economic data: this year's voting member Musalem stated that caution is necessary, next year's voting member Hamak stated that they should hold steady, next year's voting member Kashkari stated that he does not support a rate cut at the end of last month, and December's actions will depend on data, while next year's voting member Daly stated that it is too early to determine whether to cut rates in December.

Concerned about the "weaponization" of "dollar swaps," European officials are reportedly **discussing preparations for the "worst-case scenario":establishing a dollar reserve pool.

Tencent's Q3 net profit grew by 19% year-on-year, with AI cloud driving double-digit growth in enterprise service revenue, increasing investment in promoting Yuanbao; on the earnings call: actual capital expenditures for the full year 2025 will be below guidance, GPU reserves are sufficient for internal use, and WeChat will eventually launch an AI agent.

JD.com's Q3 revenue increased by 15% year-on-year, with adjusted EBITDA down 83%, and new business revenue growing more than twice, marketing expenses increased by 110%; on the earnings call: the company’s delivery service has entered a phase of rational expansion, planning to build a trillion-level smart ecosystem in three years.

SMIC's Q3 revenue grew by 9.9% year-on-year, with net profit soaring by 43.1%, capital expenditures increased by 26% quarter-on-quarter, and Q4 revenue is expected to remain flat to grow by 2% quarter-on-quarter

Bilibili Q3 revenue increased by 5% year-on-year to 7.69 billion, adjusted net profit increased by 233% year-on-year.

Alibaba's "Tongyi Qianwen" fully shifts focus, enters the C-end market, competing with ChatGPT, with the Qianwen APP becoming a new entry point in the ecosystem.

Baidu World Conference highlights: First appearance of Kunlun chip super node, single card performance improved by 95%, two Kunlun chip models released, and autonomous driving technology has crossed the critical point.

Microsoft CEO in-depth interview: Azure's profits largely come from supporting services, model developers may fall into the "winner's curse," and platform value will not disappear.

AI business model about to crash? A well-known influencer delves into OpenAI's "financial black hole": burn rate is three times that of public data, revenue is exaggerated and cannot cover costs.

Tesla AI executive states: 2026 will be the most difficult year for employees; Musk's significant shift: media reports that Tesla is developing support for Apple CarPlay to boost car sales; reports say Musk's xAI has raised $15 billion, with Series E financing to be completed next month, which Musk denies.

Quietly closing its fund, big short Burry refutes rumors of $900 million shorting Nvidia and Palantir: only spent $9.2 million in total.

Reports: Apple and Tencent have reached a payment agreement for mini-program games, charging a 15% commission.

Market Report

US and European stock markets: The S&P 500 index fell by 1.66%, closing at 6737.49 points. The Dow Jones fell by 1.65%, closing at 47457.22 points. The Nasdaq fell by 2.29%, closing at 22870.355 points. The European STOXX 600 index closed down 0.61%, at 580.67 points.

A-shares: The Shanghai Composite Index rose by 0.73%, closing at 4029.50 points; the Shenzhen Component Index rose by 1.78%, closing at 13476.52 points; the ChiNext Index rose by 2.55%, closing at 3201.75 points.

Bond market: By the end of the bond market, the yield on the US ten-year benchmark treasury bond was about 4.12%, up about 5 basis points during the day; the two-year US treasury yield was about 3.59%, up about 2 basis points during the day.

Commodities: WTI December crude oil futures rose by 0.34%, closing at $58.69 per barrel; Brent January crude oil futures rose by 0.48%, closing at $63.01 per barrel. COMEX December gold futures fell by 0.45%, closing at $4194.5 per ounce.

News Details

Global Highlights

China's new social financing in October is CNY 810 billion, with new RMB loans of CNY 220 billion, and the M2-M1 spread widens. In October, China's new social financing reached CNY 810 billion, with new RMB loans of CNY 220 billion. The M2-M1 spread at the end of October was 2.0 percentage points, widening from last month's 1.2 percentage points. An article published by the Financial Times, overseen by the central bank, stated that the scale of social financing continues to grow rapidly, with monetary policy and fiscal policy working in coordination. At the same time, it should be noted that the rapid issuance of government bonds has a certain substitutive effect on loans.

The U.S. House of Representatives passes a temporary funding bill, ending the U.S. government shutdown and beginning a "long restart". The U.S. House of Representatives voted to pass a temporary funding bill for the federal government, taking a decisive step to end the longest government "shutdown" in U.S. history. After the shutdown ends, the government will face a lengthy restart process, and it may take several days or even more than a week to return to normal operations. The Congressional Budget Office estimates that a six-week shutdown will reduce fourth-quarter GDP by 1.5 percentage points, ultimately resulting in a net loss of about USD 11 billion.

Trump's chief economic advisor Hassett: October will only have half of the employment report, with no unemployment rate data, estimating 60,000 jobs lost due to the government shutdown. White House National Economic Council Director Hassett stated, "No household survey was conducted in October, so we will only receive half of the employment report. We will get partial data on job positions, but there will be no unemployment rate data, limited to this month. The Council of Economic Advisers expects to see 60,000 jobs lost due to the government shutdown. CPI data aligns with calls for the Federal Reserve to continue cutting interest rates."

Federal Reserve officials are hawkish ahead of the release of key economic data: This year's FOMC voting member and St. Louis Fed President Bullard stated that given the inflation rate is above the target level, Fed officials should act cautiously. Next year's voting member and Cleveland Fed President Mester stated that the Fed should keep interest rates unchanged to continue suppressing inflation. Next year's voting member and Minneapolis Fed President Kashkari stated that he does not support a rate cut at the end of last month and has not decided whether to cut rates in December, which will depend on economic data. Next year's voting member and San Francisco Fed President Daly stated that it is still too early to determine whether a rate cut should occur in December.

Concerned about "dollar swaps" being weaponized, European officials are reportedly discussing preparations for the "worst-case scenario": building a dollar reserve pool. European financial stability officials are discussing the establishment of a dollar reserve pool to reduce dependence on the Federal Reserve's funding support mechanisms, especially after Powell's departure in May next year Despite non-U.S. central banks holding hundreds of billions of dollars, they struggle to match the strength of the Federal Reserve and face logistical and political obstacles. Europe is referencing Asian experiences such as the "Chiang Mai Initiative" and considering alternatives like strengthening bank reviews to prepare for the "worst-case scenario."

Tencent's Q3 net profit increased by 19% year-on-year, AI cloud drives double-digit growth in enterprise service revenue, increasing investment in Yuanbao promotion; Conference call: Actual capital expenditure for the full year 2025 will be below guidance, GPU reserves sufficient for internal use, WeChat will eventually launch an AI agent

• Tencent Holdings' Q3 report shows that the company's R&D expenditure of 22.82 billion yuan set a record high for the quarter, with capital expenditure of 12.983 billion yuan, a quarter-on-quarter decrease of approximately 32.05% and a year-on-year decrease of approximately 24.06%. In the third quarter, enterprise service revenue achieved double-digit growth year-on-year, benefiting from the revenue growth of cloud services, which includes growth driven by increased demand for AI-related services from enterprise clients. Sales and marketing expenses in the third quarter increased by 22% year-on-year, reaching 11.5 billion yuan, with marketing expenses primarily used to promote AI-native applications and games.
• During the conference call, Tencent executives stated that the GPU reserves currently held by the company are sufficient for internal use, with priority given to internal use. If there were no supply constraints on AI chips, the company's cloud revenue would have grown even faster. Regarding reports of Tencent reaching a payment agreement for mini-program games with Apple, Tencent responded that there may be an official announcement at some point.

Jingdong's Q3 revenue increased by 15% year-on-year, Adjusted EBITDA decreased by 83%, New business revenue grew more than twofold, marketing expenses increased by 110%; Conference call: The company's takeout business has entered a rational expansion phase, planning to build a trillion-level smart ecosystem in three years.

• Jingdong's adjusted EBITDA for the third quarter was 2.5 billion yuan, far below the market estimate of 3.41 billion yuan. The adjusted operating profit margin was only 0.1%, significantly down from 5% in the same period last year, with execution expenses increasing by 35% year-on-year, a growth rate significantly faster than revenue growth, becoming the main reason for the pressure on profit margins. New business revenue in the third quarter was 15.592 billion yuan, a year-on-year increase of 213.9%. New businesses mainly include Jingdong Takeout, Jingdong Production and Development, Jingxi, and overseas businesses.
• Jingdong stated during the conference call that takeout, as a long-term strategy, has achieved double-digit GMV growth, with investment narrowing quarter-on-quarter, and the unit economic model (UE) has significantly improved, entering a rational expansion phase. The takeout business has driven daily active users and user conversion on the Jingdong APP, with annual active users exceeding 700 million. Daily category sales have achieved double-digit growth for four consecutive quarters, with a 40% increase in users placing orders during "Double Eleven." Jingdong will continue to invest in AI for three years to build a complete system covering retail, logistics, and other scenarios, creating a trillion-level smart ecosystem SMIC's Q3 revenue increased by 9.9% year-on-year, net profit surged by 43.1%, and capital expenditure rose by 26% quarter-on-quarter, with Q4 revenue expected to remain flat to grow by 2%. The latest financial report shows that SMIC's capacity utilization rate climbed to 95.8% in the third quarter, nearing full production status. The guidance provided by SMIC's management for the fourth quarter indicates that revenue is expected to remain flat to grow by 2%, with a gross margin of 18%-20%. This suggests that with a capacity utilization rate already at 95.8%, the company anticipates a significant slowdown in revenue growth for the fourth quarter, while the median gross margin of 19% will see a decline of about 6 percentage points compared to 25.5% in the third quarter.

Bilibili's Q3 revenue increased by 5% year-on-year to 7.69 billion, adjusted net profit increased by 233% year-on-year. Bilibili (B Station) reported impressive third-quarter results, achieving revenue of 7.69 billion yuan, a year-on-year increase of 5%, and a net profit of 469 million yuan, turning a profit. Even more impressive, the adjusted net profit increased by 233% year-on-year to 786 million yuan, significantly improving profitability. User activity and engagement continued to rise, with daily active users reaching 117 million and average daily usage time increasing to 112 minutes. Among the revenue, the advertising business became the core engine with a growth rate of 23%, while game business revenue declined by 17% year-on-year.

Alibaba's "Tongyi Qianwen" fully transitions to enter the C-end market, benchmarking against ChatGPT! Alibaba is preparing to revamp its flagship AI application "Tongyi" and rename it "Qwen," fully benchmarking against the ChatGPT model. The new version will introduce agent-based AI features, deeply integrating with platforms like Taobao, aiming to create a one-stop smart assistant. This revamp marks Alibaba's shift from B-end monetization to C-end, accelerating its global layout and showcasing its strategic ambition with AI as the core of growth.

• Alibaba fully shifts to C-end, Qwen APP becomes a new ecological entry point. This new move indicates that Alibaba's focus on its large model has officially shifted from emphasizing the B-end (through cloud services) and developers (through open source) to the C-end mass market. Tongyi Qianwen will no longer just be a feature embedded in DingTalk, Taobao, and other applications, but rather an independent, fully functional super APP, which better aligns with user habits and enhances brand recognition.

Baidu World Conference Highlights: Kunlun Chip Super Node makes its debut, single card performance improved by 95%, two Kunlun chip models released, and autonomous driving technology has crossed the critical point. Baidu's Kunlun Chip Super Node made its first public appearance and has been deployed on a large scale within Baidu. This self-developed technology can improve single card performance by 95%, with single-instance inference performance increasing by up to 8 times Baidu announced the upgrade roadmap for its self-developed chips and computing infrastructure, planning to launch two new-generation Kunlun chips and two supernode solutions within the next two years. Data released at the conference showed that Baidu's subsidiary, Luobo Kuaipao, has surpassed 17 million global mobility service instances, with 250,000 fully autonomous orders per week, becoming the world's number one. Li Yanhong stated that autonomous driving technology has crossed the critical point.

Microsoft CEO in-depth interview: Azure's profits largely come from supporting services, model developers may fall into the "winner's curse", platform value will not disappear. Nadella stated that Azure/AI workloads not only require AI accelerators but also a large amount of supporting services. In fact, our profit margins largely come from these supporting services, and creating Azure as the ultimate platform for long-tail workloads is the essence of large-scale cloud business. Nadella emphasized that Microsoft will reduce total ownership costs through closed-loop optimization of proprietary models and custom chips. Nadella believes there will always be a fairly powerful open-source model available, as long as you have the supporting data resources and infrastructure.

• Microsoft builds its first "AI super factory": integrating hundreds of thousands of GPUs to create an interplanetary-scale computing network. Microsoft officially launched its first "AI super factory," integrating data centers scattered across Atlanta and Wisconsin into a unified computing system, creating an interplanetary-scale distributed network. This architecture successfully integrates hundreds of thousands of Blackwell GPUs and uses liquid cooling high-density design, achieving computing power collaboration through dedicated fiber optic networks, compressing complex AI training tasks from months to weeks, marking the official entry of AI infrastructure into a new era of networked collaboration.

AI business model about to crash? Well-known blogger digs deep into OpenAI's "financial black hole": burn rate is three times that of public data, revenue is exaggerated and cannot cover costs! Well-known tech blogger Ed Zitron cited internal documents revealing that OpenAI has a huge "financial black hole," with its actual inference costs potentially reaching three times that of public data, while the revenue inferred from Microsoft's share is far lower than official claims, making it difficult for revenue to cover astonishing expenditures. If the data is true, not only is OpenAI's business model facing sustainability doubts, but the entire generative AI industry's profit prospects will also be completely overturned.

Tesla AI executive says: 2026 will be the toughest year for employees. According to reports, last month Tesla's AI software vice president Elluswamy stated at a meeting: "If you work in Tesla's AI team, next year will be the toughest year of your life." Reports indicate that the nearly two-hour all-hands meeting was positioned as a "mobilization order," during which leaders at all levels of the AI department conveyed specific goals to employees These target relationships will determine whether Elon Musk's new compensation plan can be realized this month.

Major Shift for Musk: Media reports that Tesla is developing support for Apple CarPlay to boost car sales.

Reports say Musk's xAI raises $15 billion, set to complete Series E funding next month, Musk denies. According to media reports, Musk's artificial intelligence company xAI has raised $15 billion from investors. This funding adds $5 billion to the previously reported $10 billion funding in September, bringing the startup's valuation to $200 billion.

Quietly closing his fund, big short Burry refutes $912 million short position on Nvidia and Palantir: only spent $9.2 million in total. Michael Burry personally refuted claims that "the $912 million short position on Nvidia and Palantir" reported by the media was grossly exaggerated, stating that the actual investment was only $9.2 million—a difference of one hundred times. Burry pointed out that the media mistakenly took the nominal exposure disclosed by the SEC as the scale of funds. More notably, he quietly dissolved his fund Scion Asset Management and announced a new project starting on November 25.

Report: Apple and Tencent reach payment agreement for mini-program games, will charge a 15% commission. Apple and Tencent have reached a revenue-sharing agreement, with Apple set to receive a 15% revenue share from WeChat mini-games and mini-programs, down from the previous 30% standard. This breakthrough not only opens up a new revenue source for Apple in the Chinese mini-game market but also alleviates payment pressure on Tencent, potentially establishing a new profit model for software transactions in China.

Domestic Macro

Wu Qing visits financial regulatory authorities in France and Brazil and holds discussions with representatives of international institutional investors. From November 10 to 13, 2025, Wu Qing, chairman of the China Securities Regulatory Commission, visited Paris, France, and Rio de Janeiro, Brazil, where he held bilateral talks with Marie-Anne Barbat-Layani, chairwoman of the French Financial Markets Authority (AMF), Otto Lobo, acting chairman of the Brazilian Securities and Exchange Commission (CVM), and Marina Copola, a commissioner, to exchange views on the regulatory dynamics of the securities markets in France, the EU, and Brazil, as well as further deepening and expanding practical cooperation in capital markets China's central bank-controlled media: The rapid issuance of government bonds has a certain substitution effect on loans. The Financial Times, controlled by the People's Bank of China, stated that the scale of social financing continues to grow rapidly, with monetary policy and fiscal policy working in coordination. At the same time, it should be noted that the rapid issuance of government bonds has a certain substitution effect on loans. "Currently, the economy faces challenges of insufficient demand. By increasing the scale of government bond issuance, it can support the implementation of major projects and national major strategies, helping to expand demand and support the economy. At the same time, many government bonds are used to replace financing platform debts and clear overdue corporate accounts, which is actually a process of the government moderately leveraging to help enterprises and households stabilize leverage, alleviating financial pressure on operating entities and reducing debt burdens, laying a foundation for the sustainable development of the economy in the medium to long term."

What to do when the real estate market's "golden September and silver October" fades? In the face of the fading traditional sales peak season, experts suggest a multi-pronged approach: on the policy side, further reduce commercial loan interest rates to 2%, promote the alignment of second-home loan rates with first-home rates, optimize the cross-regional mutual recognition policy of housing provident funds, and continue to relax purchase restrictions; on the product side, accelerate the supply of "good houses" to drive demand with high-quality residential properties; the fundamental strategy lies in restoring buyer confidence by increasing residents' income, optimizing monetary policy, and releasing positive market signals to stabilize housing price expectations.

Domestic Companies/Industries

Humanoid robots look ideal, but reality is stark? Industry predicts 100,000 units sold next year, but institutions only see 12,000 units. Morgan Stanley warns that the market's short-term expectations for humanoid robots are overly optimistic, as true large-scale commercial use faces a triple lock from application scenarios, hardware costs, and software intelligence. In the short term, compared to the highly anticipated "general humanoid robots," those special robots (such as wheeled or quadruped robots) that can create clear value in specific tasks, as well as core component suppliers, may be more worthy of attention.

Lithium battery stocks explode, CATL and Aotai both sign major contracts, domestic and foreign energy storage demand welcomes a resonant moment! The lithium battery sector has surged, with over 20 stocks hitting the daily limit, and CATL rising over 7%, thanks to two major pieces of news: Haibosichuang signed a ten-year strategic agreement with CATL, with battery cell purchases not less than 200GWh in the next three years; Aotai secured a 1.86GWh energy storage contract in Canada. Guotai Junan believes that the large procurement agreement between Haibosichuang and CATL demonstrates confidence in future high growth in energy storage, coupled with Aotai's overseas contract landing, marking a resonant moment for domestic and foreign energy storage demand.

Boosted by the recovery of the Chinese market, Burberry's Q2 performance turns profitable, with sales achieving quarterly growth for the first time in two years. Burberry's comparable store sales in the second fiscal quarter increased by 2% year-on-year Ending a seven-quarter decline. Sales in the region, including China, grew by 3% in the last three months. The company reported a profit of £19 million in the first half of the year, indicating that confidence in the CEO's return to classic coats and cost-cutting strategies is taking effect, boosting market confidence.

Overseas Macro

Is it becoming difficult for AI to "leverage"? CoreWeave's related data center bond issuance met with market indifference. There are signs of cooling in the AI infrastructure financing boom. A $2.35 billion bond issued for data center construction by Applied Digital faced market indifference, with subscription levels falling short of expectations. Unlike the previous hot deals supported by Google, this bond's speculative-grade credit rating for its main tenant, CoreWeave, made investors cautious, leading to a significant increase in financing costs.

Is AI leverage underestimated? Of the $2 trillion in capital expenditures, "financing leases" support $400 billion! Morgan Stanley predicts that of the $2 trillion in AI capital expenditures over the next three years, as much as $400 billion will be realized through financing leases, with tech giants already locking in $388 billion in future leasing commitments. This trend poses a core challenge for investors: due to the accounting treatment differences between financing leases and operating leases, the free cash flow and leverage ratios in companies' financial reports have lost direct comparability.

Gold rebounds fiercely! Citigroup calls for $6,000, but faces pressure in 2026. Citigroup believes that in a bull market scenario, gold prices will rise to $6,000 by 2027, with the core logic being the huge mismatch between global wealth and the small physical gold market. The report estimates that a mere 1.5% increase in global household wealth allocation to gold would consume 18 years' worth of mineral supply, and this imbalance can only be resolved by soaring prices. Meanwhile, the main drivers of this round of increase are American investors, not central banks, with ETF inflows contributing to most of the global increment.

Overseas Companies

GPT-5.1 suddenly debuts, Ultraman listens to advice, and the human touch that everyone has been calling for returns. OpenAI's GPT-5.1 "family pack" suddenly appeared, with Instant and Thinking bomb combo launching simultaneously. This time, the model's emotional and intellectual intelligence has been upgraded, making it not only smarter but also more personable in conversations.

The ultimate solution to "energy bottlenecks"? Musk, Bezos, and Google are all eyeing "space data centers". A Google paper points out that the sun's output power reaches up to 3.86 × 10^26 watts, which is over 100 trillion times the total electricity generation of humanity. At some point in the future, the best way to power artificial intelligence may very well be to directly harness this enormous energy source Despite facing multiple severe challenges such as cost, heat dissipation, and reliability in sending data centers into orbit, this move may ultimately be a necessary option due to the exponential growth in AI computing power demand.

"The best-selling drug on Earth"? Citigroup: Medicare inclusion changes everything, Eli Lilly's oral GLP-1 sales next year will be twice the market forecast. Citigroup raised Eli Lilly's target price to $1,500. Analysts believe that as Medicare opens the door to obesity treatment in the U.S., the market penetration speed of Eli Lilly's new oral GLP-1 drug Orforglipron will experience a "violent" surge far exceeding market expectations. Citigroup raised its sales forecast for Orforglipron in 2026 from $500 million to $1.8 billion, about three times the market consensus expectation. Looking further ahead, the peak sales forecast for the drug is as high as $40 billion or more.

Today's News Preview

China will announce the industrial added value above designated size, retail sales of consumer goods, real estate development investment, fixed asset investment, and residential sales prices in 70 large and medium-sized cities for October. The State Council Information Office will hold a press conference on the national economic operation.

Hong Kong's GDP for the third quarter.

Eurozone GDP for the third quarter.

France's CPI for October.

Atlanta Fed President Bostic, Kansas Fed President George, and Dallas Fed President Logan will deliver speeches.

Huawei will hold an operating system conference.