Global macro

• Before the Friday market, June core PCE exceeded expectations, and the three major stock index futures strengthened.

The annual rate of US June core PCE price index was recorded at 2.6%, higher than expected. The monthly rate of US June core PCE price index was recorded at 0.1%, the same as last month, in line with expectations.

• BlackRock Co-Founder: If Trump is elected president of the United States, it will pose a risk to US stocks.

Ralph Schlosstein, co-founder of BlackRock, said that once Trump is elected president of the United States, he will pose a risk to the US stock market. He said that Trump has proposed to levy a 10% tariff on imported products from other countries, which could push up inflation and hit the stock market. Although the Fed is unlikely to respond directly to Trump's duties through interest rate hikes, if inflation ultimately surges, it cannot rule out the possibility of interest rate hikes.

• Wedbush is not afraid of the 'AI hot' cooling: Technology stocks 'squeeze the bubble' and their valuations are healthier after the adjustment.

Wedbush Securities emphasizes that the plummeting of technology stocks due to weaker-than-expected quarterly performance of technology giants such as Google and Tesla under the rapid development trend of artificial intelligence and cloud computing is a 'temporary phenomenon'. The wave of enterprise spending on artificial intelligence is comparable to the 'fourth industrial revolution', and artificial intelligence will ultimately improve productivity across the board. Therefore, the callback of hot technology stocks related to AI such as NVIDIA is a normal phenomenon, and their adjusted valuations are healthier and lay a foundation for subsequent highs.

• Bank of America: If the US economy continues to cool down, American technology giants will come under further pressure.

Michael Hartnett, a strategist at Bank of America, said that if the US economy continues to cool, the rise of large US technology stocks may further fade, and signs of economic slowdown will drive investors to turn to stocks that have lagged behind expensive technology giants this year. In addition, recent data shows that the global economy is 'weak', and large technology stocks are only a bad non-farm employment data away from 'losing their dominance'.

• UBS: Commodities will rise to $2,600 per ounce at the end of the year and Brent crude oil will rise to $87 per barrel.

Concerns about weak demand have recently pushed commodity prices down. However, UBS continues to believe that limited supply and strong demand will continue to drive commodity prices higher, and this asset class will provide strong diversified benefits in investment portfolios. UBS expects gold prices to reach $2600 per ounce by the end of this year and $2700 per ounce by mid-2025. The decline in OPEC+ crude oil exports will help tighten the oil market, and the year-end Brent crude oil goal will remain unchanged at $87 per barrel.

Hot news

• Most of the popular technology stocks rose before the market, and NVIDIA, Tesla, Broadcom rose more than 2%, and ASML Holding rose more than 4%.

• Local competitors are rising strongly, and iPhone has fallen out of the top five in China for the first time in four years.

IDC data shows that Huawei's shipments increased by 50% in the last quarter, and its recovery and fierce competition among local manufacturers such as Vivo and Xiaomi pushed it to sixth place in the market. In this quarter, iPhone's global shipments were relatively stable. Apple will announce quarterly data on August 1.$Apple (AAPL.US)$UBS maintains a 'sell' rating and a target price of $197 for Tesla, focusing on autonomous driving and artificial intelligence.

• UBS believes that it is difficult to give Tesla a valuation for future business, but the current stock price has given it considerable value in this area. In terms of autonomous driving, the challenge lies in the timetable, and the possibility of success is uncertain. The company also admits that the deployment of self-driving taxis depends on technological progress and regulatory approval. The bank believes that only about $74 of the stock price involve core electric vehicle and energy business, and believes that the future business valuation built on the stock price is already expensive. The bank maintains a 'sell' rating and a target price of $197 for Tesla.

UBS maintains a 'buy' rating on Meta and expects advertising revenue to increase by 20% year-on-year in the second quarter.$Tesla (TSLA.US)$UBS believes it is difficult to give Tesla a valuation for future business, but the current stock price has given it considerable value in this area. In terms of autonomous driving, the challenge lies in the timetable, and the possibility of success is uncertain. The company also admits that the deployment of self-driving taxis depends on technological progress and regulatory approval. The bank believes that only about $74 of the stock price involve core electric vehicle and energy business, and believes that the future business valuation built on the stock price is already expensive. The bank maintains a 'sell' rating and a target price of $197 for Tesla.

• Bank of America maintains a 'buy' rating on Meta, and expects advertising revenue to increase by 20% year-on-year in the second quarter.

According to Bank of America's report, it is expected that the revenue in the second quarter will exceed or meet the expected $38.5 billion, advertising revenue will increase by 20% year-on-year, EBITDA is estimated to be $23 billion, earnings per share are $4.98, both are higher than market expectations, and the usage time and user growth of IG are healthy. The bank maintains a 'buy' rating on Meta, with a target price of $550, reflecting a forecast PE of 22 times next year.$Meta Platforms (META.US)$Deckers rose more than 12% before the market, Q1 profits and revenues exceeded expectations, and raised its full-year profit forecast.

• Deckers rose more than 12% before the market, Q1 profits and revenues exceeded expectations, and raised its full-year profit forecast.

$Deckers Outdoor (DECK.US)$Q1 revenue of 0.825 billion USD, estimated at 0.80794 billion USD. EPS of 4.52 USD, estimated at 3.48 USD. The company still expects a year-on-year net sales growth of about 10% to 0.47 billion USD for the 2025 fiscal year. The gross margin is now expected to be 54%, and the company has raised its full-year earnings guidance for 2025 to a range of $29.75-$30.65 per share.

• Colgate-Palmolive's Q2 sales and EPS exceeded expectations, raising full-year performance guidance.

$Colgate-Palmolive (CL.US)$Q2 sales increased 5% year-on-year to 50.58 billion USD, better than the expected 50.1 billion USD. Organic sales growth rate was 9%. Adjusted EPS was 0.91 USD, beating the market expectation of 0.87 USD. The company reiterated its full-year sales expectations of a 2%-5% increase, but raised its organic sales growth rate guidance from the previous 5%-7% to 6%-8%.

• Vale SA's Q2 net profit doubled, revenue increased 3% year-on-year.

$Vale SA (VALE.US)$Q2 net revenue was USD 9.92 billion, up 3% from USD 9.673 billion in the same period last year, and the analyst's expectation is USD 9.94 billion. Net income attributable to shareholders was USD 2.769 billion, an increase of 210% year-on-year, far exceeding the analyst's expectation of USD 1.7 billion.

Not to be outdone, after NVIDIA CEO Huang Renxun announced the latest AI chip iteration schedule on the evening of June 2nd, AMD CEO Su Zifeng also threw out an iteration roadmap during her speech on the morning of June 3rd before the COMPUTEX opened. The company will launch the MI325 X and Ryzen AI300 this year, the MI350 series in 2025, and the MI400 series in 2026.

• Most popular China concept stocks rose before the market, Taiwan Semiconductor and Nio increased nearly 2%.

• Taiwan Semiconductor: The German plant is proceeding according to plan, and the Arizona plant in the United States is progressing smoothly.

According to the media,$Taiwan Semiconductor (TSM.US)$The semiconductor wafer plant in Dresden, Germany will start construction in a few weeks and is expected to start in the fall of this year. Taiwan Semiconductor responded on the afternoon of July 26 that the German plant is proceeding according to plan, and the Arizona plant in the United States is also progressing smoothly. According to the plan, Taiwan Semiconductor's Dresden plant is expected to start construction in the fourth quarter of this year and will start mass production in 2027.

• Yu Minhong: It is very regretful to separate from Hui Tongxing, but it is indeed unavoidable.

$New Oriental (EDU.US)$Founder Yu Minhong today at$EAST BUY (01797.HK)$Founder Yu Minhong expressed regret about the divestment of this result of both companies during the shareholders communication meeting today, but he said that this result was indeed inevitable in the face of the reality that the company faced, and even this result was good for the development of the company. Haitong International research report believes that the drop in the New Oriental stock price is an overreaction, and the estimated value is $97 per share.

• Jefferies Financial: Netease's "NARAKA: BLADEPOINT" is expected to break 1 billion yuan in first-month revenue.

Jefferies released a research report stating that the newly released game "NARAKA: BLADEPOINT" ranks third in iOS game total revenue and has 40 million pre-registrations. It is expected to become a large-scale DAU game that emphasizes game balance and innovation. The bank believes that if the game continues to rank in the top three of the game's bestseller list, the predicted revenue for the first month is expected to exceed 1 billion yuan. The bank maintains a "buy" rating for the group, with a target price of $116 for U.S. stocks.$NetEase (NTES.US)$The newly released game "NARAKA: BLADEPOINT" is currently ranked third in the total iOS game revenue chart, with 40 million pre-registrations, and is expected to become a large-scale DAU game that focuses on game balance and innovation. The bank believes that if the game can continue to occupy the top three of the best-selling games, it is expected that the first month's income will exceed the forecast of 1 billion yuan. The bank maintains a "buy" rating for the group with a target price of $116 per share.

Bilibili rose more than 3% pre-market trading and was upgraded to "buy" by UBS, which raised its EPS estimate per share.

Reminder for US Macro Events

(All in Peking Time)

The final value of the University of Michigan Consumer Sentiment Index for July is at 22:00 on July 22.

Editor/Emily