Wall Street to Lujiazui Selection | Technology Giants Shoulder Inflation Worries: Where is the Future Strength of US Stocks? The yen accelerated its decline and fell below the 158 mark; Musk visits China again to seek Tesla’s fully autonomous driving landing in China?

Wall Street to Lujiazui Selection | Technology Giants Shoulder Inflation Worries: Where is the Future Strength of US Stocks? The yen accelerated its decline and fell below the 158 mark; Musk visits China again to seek Tesla’s fully autonomous driving landing in China?

① The Federal Reserve is about to announce its interest rate decision. What is the momentum behind the US stock market for tech giants to shoulder inflation concerns?

Last week, the US Department of Commerce released double “unexpected” economic data, which raised concerns in the market that the US economy may enter stagflation. The next step for the Federal Reserve to overcome these difficulties has attracted much attention. Citibank believes that although inflation has not yet continued to slow down, the Federal Reserve will still cut interest rates this summer. In the coming week, the Federal Reserve resolution will be held as scheduled, and the flow of funds shows that concerns about the prospect of interest rate cuts have caused net outflows from US stock funds for the fourth consecutive week. The financial reports of multiple technology companies will continue to test the sustainability of the artificial intelligence boom. Fortunately, last week’s strong performance from Google and Microsoft drove technology stocks back, overshadowing the interest rate panic caused by inflation indicators. Against the backdrop of sustained high US bond yields, uncertainty will continue to plague the end of month US stock market. Recently, Kaitou Macro, a well-known research company, believed that AI would also promote the continuous rise of US stocks in the short term, but this foam would eventually burst in 2026.

Commentator Xu Ge:

Huang Cendong, Strategy Analyst at Guojin Securities Wealth Center:

② The Japanese yen accelerated its decline and fell below the 158 mark

Last Friday, the Bank of Japan’s monetary policy meeting decided to maintain the current monetary policy unchanged and keep the policy interest rate target between 0 and 0.1%. Bank of Japan Governor Kazuo Ueda publicly stated that the depreciation of the yen has not had a significant impact on CPI, and a weak exchange rate is acceptable. Subsequently, the yen plunged sharply. On that day, the exchange rate continuously fell below the three major barriers of 156157158, with a single day drop of 1.71%, continuing to break a new low since May 10, 1990. This year, the Japanese yen has depreciated by 12.28% against the US dollar, not only being the worst performing currency among the Group of 10 countries, but also far exceeding its depreciation rate of 7.57% for the entire year of 2023.

Commentator Xu Ge:

Huang Cendong, Strategy Analyst at Guojin Securities Wealth Center:

③ The First Bank of the United States declares bankruptcy

On April 27th, according to the Federal Deposit Insurance Corporation of the United States, Pennsylvania regulatory authorities closed Philadelphia based Republic First Bank and agreed to sell it to Fulton Bank. The bank became the first bank in the United States to fail in 2024. According to data disclosed by the Federal Reserve Insurance Company, as of January 31, 2024, Bank of the Republic of the United States has assets worth $6 billion (approximately RMB 43.4 billion) and total deposits worth $4 billion (approximately RMB 29 billion).

Commentator Xu Ge:

Huang Cendong, Strategy Analyst at Guojin Securities Wealth Center:

④ Will the new iPhone introduce AI functionality? Apple is rumored to be in talks with OpenAI and Google

According to insiders, Apple has restarted negotiations with OpenAI and plans to use OpenAI technology to support some new features of the iPhone launched later this year. According to insiders, the two companies have started discussing possible agreement terms and how OpenAI features will be integrated into Apple’s next-generation iPhone operating system, iOS 18. Earlier this year, Apple had discussions with OpenAI about a deal, but since then, it seems that the two sides have not truly cooperated.

Commentator Xu Ge:

Huang Cendong, Strategy Analyst at Guojin Securities Wealth Center:

⑤ Countdown to the 2024 Buffett Shareholders Meeting: Buffett Holds More Liberty SiriusXM

According to documents on the website of the Securities and Exchange Commission (SEC), last week, Berkshire Hathaway, a subsidiary of Warren Buffett, increased its holdings of A-class and C-class shares in Liberty SiriusXM. After calculation, Berkshire spent a total of over $28 million this time. It is reported that Liberty SiriusXM is the tracking stock of SiriusXM, a satellite broadcasting company controlled by American media tycoon John Malone, with approximately 80% equity in SiriusXM. Based on current holdings, Berkshire’s top five holdings are American Express, Apple, Bank of America, Coca Cola, and Chevron. In the fourth quarter of last year, Buffett reduced his holdings in the largest holding company, Apple, but the latest holdings still accounted for 50%. At the same time, Buffett increased his holdings in Chevron and Western Oil. The 2024 Buffett Shareholders’ Meeting is about to begin this weekend, and the market is highly concerned about Buffett’s views on the next round of global investment opportunities.

Commentator Xu Ge:

Huang Cendong, Strategy Analyst at Guojin Securities Wealth Center:

⑥ Musk visits China again! Tesla Meets China Automotive Data Security Compliance Requirements

At the invitation of the China Council for the Promotion of International Trade, Tesla CEO Elon Musk arrived in Beijing on the afternoon of the 28th. Tesla has not responded to Musk’s specific itinerary for his visit to China. However, Musk previously stated on social media that he believes the FSD12 version is ready to pass industry regulations in countries with left steering wheels, and it may take some more time to go on the road. Therefore, it is expected that his visit will promote the landing of fully autonomous driving (FSD) software in China, as well as issues such as cross-border transmission licenses for autonomous driving data. On the same day, the China Association of Automobile Manufacturers (CAAM) officially released a notice on the inspection of four safety requirements for automotive data processing (first batch). Among them, 76 models from six companies, BYD, Ideal, Lotus, Hezhong New Energy (Nezha Automobile), Tesla, and NIO, meet the four compliance requirements for automotive data security.

Commentator Xu Ge:

Huang Cendong, Strategy Analyst at Guojin Securities Wealth Center:

CITIC Securities: If Tesla’s model of “extreme cost-effectiveness hardware+high gross profit FSD software” can be implemented on a large scale in China, it may be similar to the “ChatGPT moment” of smart cars; Whether in terms of incremental demand or business models, it means new possibilities for current domestic car companies and supply chains.

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