1. The three major indexes diverged, with the Dow Jones Industrial Average falling and the Nasdaq breaking through the 17,000 mark for the first time in history
2. Musk's xAI may place a large order, Nvidia rose nearly 7% to a new record high
3. Kashkari: Monetary policy remains restrictive and should not completely rule out rate hikes
4. Faraday Future fell more than 21% after the market closed, and may never achieve or maintain profitability
5. Wall Street is going to launch the Chinese version of "Mag 7" - "Lucky 8"

Kashkari: Monetary policy remains restrictive and should not completely rule out rate hikes

Minneapolis Fed President Neel Kashkari said the Fed's policy stance is restrictive, but policymakers have not completely ruled out further rate hikes. "I don't think anyone has completely ruled out raising rates," Kashkari said in an interview earlier on Tuesday, adding that officials should wait for more evidence of cooling inflation before cutting rates, especially given the strong labor market and resilient economy. "Relative to what we think is ultimately consistent with our 2% inflation target, the pace of wage growth is still quite strong," he said.

Investment bank research: Biden's re-election as president will boost yields and gold prices

Strategists at investment bank Piper Sandler & Co. said that if Biden is re-elected as US president in November this year, the 10-year Treasury yield may rise by about 12 basis points. Conversely, if Trump wins, the yield may fall. The study examined the reaction of 34 different assets to the US presidential election. The bank's strategists wrote that this may be because the yield curve has not yet taken into account the potential uncertainty of monetary policy under the Trump administration. They also estimated that if Biden wins, the S&P 500 will rise by 3.1%, and gold prices will be boosted. In contrast, if Trump wins, the S&P 500 will fall by 1.8%.

The winning yield of the US 2-year Treasury bond auction was 4.917%, higher than the pre-issuance trading level

The winning yield of the US Treasury's $69 billion 2-year Treasury bond auction was 4.917%, and the trading level was 4.907% when the bids were closed at 11:30 a.m. New York time. The rally caused the yield to fall by about 2 basis points as the auction approached. Short-term Treasury yields rose slightly after the results were announced, but remained within the daily fluctuation range. The 2s10s spread continued to widen by about 4 basis points during the day. Primary dealers were allocated 16.6%, higher than the previous time; the allocation ratio of indirect bidders fell to 57.9%, and the allocation ratio of direct bidders rose to 25.5%; the bid-to-cover ratio was 2.41 times, and the average of the previous six times was 2.59 times.

JPMorgan Chase's Ho Yaodong: If the economic recovery momentum can be maintained, it is not ruled out that funds will gradually increase their allocation to the Chinese stock market

Ho Yiu-tung, co-CEO of JPMorgan Chase China, said that hedge funds can be observed buying in the Hong Kong stock market, and there was no large-scale profit-taking after the Hang Seng Index rebounded, which shows that funds are still willing to stay. In the past two years, due to the weak liquidity and high interest rates of Hong Kong stocks, as well as the more impressive performance of European, American and Japanese stock markets, long-term funds were previously in a state of significant under-allocation to the Chinese stock market. At present, long-term overseas funds such as university endowment funds and sovereign funds are still in a wait-and-see attitude, but if the momentum of economic recovery can be maintained, it is not ruled out that funds will gradually increase their allocation.

New property market policies: Guangzhou and Shenzhen take action on the same day

On May 28, Guangzhou announced several policies to relax real estate market regulation, such as reducing the down payment ratio for first home purchase to the 15% lower limit stipulated by the central bank and abolishing the lower limit on interest rates. Non-local residents can buy houses in restricted areas after paying social security for six months.

On the same day, Shenzhen announced that the minimum down payment ratio for the first home would be reduced from 30% to 20%, the lower limit of the commercial loan interest rate for the first home would be adjusted from the original LPR-10BP to LPR-45BP, and the lower limit of the commercial loan interest rate for the second home would be adjusted from the original LPR+30BP to LPR-5BP.

The three major indexes diverged, with the Dow Jones Industrial Average falling and the Nasdaq breaking through the 17,000 mark for the first time in history

The three major U.S. stock indexes closed mixed, with the Dow Jones Industrial Average down 0.55%, the Nasdaq up 0.59%, and the S&P 500 up 0.02%. Most of the popular technology stocks rose, with Nvidia up nearly 7%, with a total market value of $2.8 trillion, only $100 billion less than Apple, AMD up more than 3%, Tesla down more than 1%, and Google, Amazon, and Meta up less than 1%.

Most of the popular Chinese concept stocks rose. Xpeng Motors rose more than 2%, NIO and Weibo rose more than 1%, NetEase, Tencent Music, Manbang, Li Auto, and Vipshop rose slightly. Pinduoduo fell nearly 5%, JD.com fell more than 1%, Alibaba, iQiyi, Baidu, and Bilibili fell slightly.

Musk's xAI may place a large order, Nvidia rose nearly 7% to a new record high

Nvidia closed up nearly 7% at $1,139.01, with a market value of $2.8 trillion, just $100 billion away from Apple's market value. Media analysis pointed out that Nvidia's surge was due to Musk's actions in the field of artificial intelligence. It is reported that after xAI successfully raised $6 billion from investors, Musk plans to connect Nvidia's H100 graphics processor cluster to build an xAI supercomputer, and the chipset it connects is expected to be four times the largest GPU cluster today. To train its next version of Grok, xAI is expected to need up to 100,000 GPUs and connect these chips in series to form a "computing super factory."

GameStop rose more than 25%, and its stock price more than doubled in May

GameStop's stock closed up 25.16% on Tuesday at $23.78, and its share price has doubled this month. Late last Friday, GameStop announced that it had sold 45 million shares, raising just over $933 million.

Faraday Future fell more than 21% after the market closed, and may never achieve or maintain profitability

Faraday Future fell more than 21% after the market closed. Faraday Future had a net loss of $432 million in 2023 and a net loss of $602 million in 2022. The company withdrew its guidance for vehicle production targets for 2024, saying the decision was driven by current market conditions and funding levels. Faraday Future said in its financial report that the company may incur unforeseen expenses or encounter difficulties and delays in delivering the FF 91 series, and therefore may never generate enough revenue to sustain its operations. Although FF has begun its first delivery of the FF 91 series, FF may never achieve or maintain profitability for a variety of reasons, including insufficient demand for the FF 91 series and its related services, vehicle service and warranty costs, increased competition, challenges in the macroeconomic environment, regulatory changes, and other risks discussed in this article. As of press time, Faraday Future fell 1.71% after the market closed.

Wall Street is going to launch the Chinese version of "Mag 7" - "Lucky 8"

According to media reports, following the US stock "Seven Sisters" ETF MAGS, the well-known investment company Roundhill Investments plans to launch the Chinese concept technology stock ETF Lucky 8. The trading code of Lucky Eight ETF is "LCKY". The initial constituent stocks include Tencent, Alibaba, Meituan, BYD, Xiaomi, Pinduoduo, JD.com and Baidu, with equal weight positions, and it is expected to be listed this summer.

Robinhood rose nearly 5% after the market and announced a $1 billion stock repurchase

Retail brokerage firm Robinhood Inc. recently announced a $1 billion stock buyback plan, which quickly triggered a strong response to its stock price. According to documents filed on Tuesday, Robinhood expects the buyback plan to start in the third quarter and may last for two to three years. The company's management also revealed that they will adjust the pace of capital deployment based on changes in stock prices.

JD.com and Alibaba have successively issued convertible bonds. UBS said that more Chinese concept stocks may follow suit.

JD.com and Alibaba announced the issuance of convertible senior notes of US$1.75 billion and US$4.5 billion respectively on May 21 and 23, 2024. Zhang Qianjia, co-head of UBS Asia Equity Capital Markets, said that when the above-mentioned technology companies issued convertible bonds, they clearly stated that the funds would be used for stock repurchases, which provided certain support for the stock price. Other Chinese companies may follow suit and issue similar products. UBS is the joint bookrunner of the above-mentioned convertible bonds of JD.com. Zhang Qianjia pointed out that the issuance of JD.com's convertible bonds is equivalent to "opening a new beginning", allowing other companies to see that there are indeed some positive changes in the capital market.

China Evergrande: The company's shares will continue to be suspended

China Evergrande Hong Kong Stock Exchange announced that although the liquidators have recovered a small amount of value from the company's assets, the company's liquidity and other internal resources are still limited. Taking into account the company's debt level and the challenges faced by the group's business and operations, in the absence of major new investment in the company, the liquidators have not yet found a restructuring plan that can enable the company to meet the resumption of trading guidelines and resume share trading. The company's shares will continue to be suspended until further notice.

CITIC Financial Assets (02799.HK): Plans to transfer 60% equity of CITIC Financial Leasing Co., Ltd. (i.e. Huarong Financial Leasing Co., Ltd.) to CITIC Group for approximately RMB 11.9975 billion.

Fourth Paradigm (06682.HK): Total revenue in the first quarter was RMB 828 million, a year-on-year increase of 28.5%; gross profit was RMB 341 million, a year-on-year increase of 21.1%; gross profit margin was 41.2%.

Baozun E-Commerce-W (09991.HK): Total net revenue in the first quarter was 1.9798 billion yuan, a year-on-year increase of 4.9%; the adjusted net profit of the e-commerce business was 11.8 million yuan.

Shenzhen Expressway Co., Ltd. (00548.HK): In April, the toll revenues of Meiguan Expressway, Jihe East Section, Jihe West Section, Yanjiang Project and Outer Ring Project were RMB 12.008 million, RMB 52.891 million, RMB 43.405 million, RMB 52.284 million and RMB 95.142 million, respectively. Among them, the toll revenue of the Outer Ring Project decreased by approximately 3.19% year-on-year.

3SBio (01530.HK): Subsidiary 3SBio Mandi and Hanyu Pharmaceuticals reached a cooperation agreement on semaglutide injection.

Huaneng Power International Holdings Limited (00902.HK): The board of directors agreed that the company will increase its capital in Huaneng Shidao Bay Nuclear Power Development Co., Ltd. by approximately RMB 210 million. After the completion of this capital increase, the company's shareholding ratio in Shidao Bay Nuclear Power will remain unchanged at 22.5%.

US stock earnings

Pre-market: HP, Chewy;

After-hours: Salesforce, C3.ai

The above is today’s Washington Morning News. You are welcome to leave a message for discussion. I wish you a smooth investment!

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