Since Israel launched attacks on Iran late last week, both WTI crude oil, the US benchmark, and Brent crude oil, the global benchmark, have experienced significant volatility. One indicator might help illustrate just how serious investors' concerns are about the potential scope of this conflict... Rebecca Babin, Senior Energy Trader and Managing Director at CIBC Private Wealth, said that the CBOE Crude Oil ETF Volatility Index hit its highest closing level in over three years on Tuesday, indicating that "the market is pricing in multiple tail risks." "This is a clear signal that traders are increasingly concerned about how the situation might evolve—not just short-term supply disruptions, but broader regional instability," Babin noted. According to Dow Jones Market Data, the index surged by 26% on Tuesday, closing at $71.56, its highest closing level since March 2022. Described as an estimate of the 30-day expected volatility of crude oil priced by the United States Oil Fund (USO), the index has "doubled" in the past five trading days, rising by 104%. It's worth noting that the index has also surged after key geopolitical events in the past, but none have been as dramatic as this one. For example, after Hamas attacked Israel on October 7, 2023, the index rose by 11.7% the following Monday, closing at $39.85, its highest closing level since June of that year. On the day after Trump's April 2 "Liberation Day" tariff announcement, the index rose by 18%, closing at $35.45. Fawad Razaqzada, Market Analyst at GAIN Capital, said that the situation between Israel and Iran this time is "quite different." "US President Trump stated in a social media post that 'we now have complete control of Iranian airspace,' indicating that the US is engaging in the conflict," he said. According to multiple media reports, US President Trump is considering a range of options, including joining Israel in air strikes against Iran. He also posted on social media on Tuesday demanding Iran's "unconditional surrender." This has raised questions about whether the US might take action to deepen its involvement in the conflict. Market data shows that the price of the most-traded July WTI crude oil futures contract in the US rose by $3.07, or 4.3%, on Tuesday, closing at $74.84 per barrel, its highest closing level for the most-traded contract since January this year. The most-traded August Brent crude oil futures contract, the global benchmark, also rose by $3.22, or 4.4%, closing at $76.45 per barrel, its highest closing level since February. Matt Polyak, managing partner at Hummingbird Capital, said that a key factor driving market volatility is the potential impact on global supply from Iran's export of approximately 1.5 million barrels of oil per day. According to data from the US Energy Information Administration (EIA), around 20 million barrels of crude oil and condensate were transported through the Strait of Hormuz to global markets each day in 2024, accounting for roughly one-third of global oil trade. From the perspective of market positioning, Polyak of Hummingbird noted that CFTC data showed that the net managed money position in crude oil on the New York Mercantile Exchange (NYMEX) was in line with the average over the past three years but below the five-year average, suggesting there is still room for long positions to increase. Meanwhile, Denton Cinquegrana, chief oil analyst at Oil Price Information Service, pointed out that the open interest in WTI contracts is in "free fall, so short positions are undoubtedly being covered." Short positions refer to bets on falling oil prices, and covering refers to investors buying back the oil they previously sold short. For example, FactSet data showed that the open interest in the most-traded July WTI crude oil futures contract was around 81,660 lots in Tuesday's trading, down from 144,493 lots on Friday. Regarding how high oil prices could rise from current levels, CIBC's Babin said that if the situation is limited to Iran-Israel tensions, "some of the gains may already be priced in by the market—especially since the spare capacity of Saudi Arabia and the UAE provides some cushion." However, she stated, "if there are signs that the situation is escalating into a full-blown regional conflict with direct strikes on infrastructure, then there is still significant upside risk for oil prices."

As reminded by a Caixin article on Tuesday evening, overnight and into the morning, overseas markets have been busy reassessing the prospects of the Middle East conflict, with the three major US stock indices collectively under pressure and declining. As of Tuesday's close, the S&P 500 fell 0.84% to 5,982.72 points; the Nasdaq Composite Index fell 0.91% to 19,521.09 points; and the Dow Jones Industrial Average fell 0.7% to 42,215.8 points. As a bellwether for the Middle East conflict, international oil prices surged again. (Daily chart of Brent crude oil, source: TradingView) According to CCTV News, as the military conflict between Israel and Iran continues, the market's focus has shifted to whether the US military will intervene. According to reports, US President Trump met with his national security team in the White House Situation Room on Tuesday to weigh whether to further intervene in the ongoing conflict between Israel and Iran. US Treasury bond prices also rose simultaneously, though this was also related to weak US retail, housing, and industrial output data. Later on Wednesday (early Thursday Beijing time), the US Fed will announce its latest interest rate decision and hold a press conference. The market generally expects that before a series of uncertainties that could trigger inflation are resolved, Fed officials will have no room to cut interest rates. Meanwhile, Andrew Tyler, head of global market intelligence at JPMorgan Chase, who successfully predicted the April rebound, said this week that despite the success of investors' strategy of buying the dip in the US stock market this year, with negative news always being rewarded after fading away, it is now best to reduce risk exposure. Regardless of the Israel-Iran situation, the US stock market itself is already ripe for a correction. The latest Bank of America Fund Manager Survey also shows that about 54% of institutional investors expect international stocks to be the best-performing asset class over the next five years, while only 23% choose US stocks. Performance of Popular Stocks Tech giants generally fell on Tuesday, with Apple down 1.4%, Microsoft down 0.23%, Amazon down 0.59%, Nvidia down 0.39%, Google-A down 0.46%, Tesla down 3.88%, and Meta down 0.7%. Chinese ADRs also weakened due to market sentiment, with the Nasdaq Golden Dragon China Index closing down 1.77%. As of the close, Alibaba was down 0.8%, JD.com was down 0.93%, Baidu was down 1.42%, Pinduoduo was down 0.25%, Bilibili was down 2.6%, NIO was down 2.27%, NetEase was down 1.12%, and Futu Holdings was down 1.47%. The "Traditional Chinese Medicine + Brain-Computer Interface" concept stock that captured market attention yesterday, Brain Regeneration Technology, continued to rise by 30%, reaching a market capitalization of $38.5 billion, with a cumulative increase of 59,900% since the beginning of the year. It should be emphasized that the core reason for the stock's speculative surge lies in its extremely small free float. Company News [Amazon CEO Issues Warning on "AI Taking Jobs"] On Tuesday local time, Andy Jassy, CEO of Amazon, the world's largest e-commerce and cloud computing platform, publicly wrote that as the company widely adopts AI to enhance efficiency, it is expected that the overall workforce will be reduced. [US Energy Giant Chevron Officially Enters Lithium Industry] US energy giant Chevron announced on Tuesday its entry into the lithium industry. The company acquired two oilfield areas with the intention of building a "commercial-scale" lithium business in the US. Chevron stated that in the future, it will utilize the "Direct Lithium Extraction" (DLE) process at oilfields to extract lithium from brine. [Coinbase to Seek SEC Approval for Tokenized Equities] Paul Grewal, Chief Legal Officer of Coinbase, a cryptocurrency exchange and newly added member of the S&P 500 Index, revealed that the company is seeking approval from the US Securities and Exchange Commission (SEC) to launch a "tokenized equities" service. [Eli Lilly to Acquire Gene-Editing Startup Verve for $1.3 Billion] On Tuesday Eastern Time, US pharmaceutical giant Eli Lilly announced that it would acquire gene-editing startup Verve Therapeutics for up to $1.3 billion. In response to this news, Verve's stock price closed up 81.50% on Tuesday. [JPMorgan Chase Launches Deposit Token JPMD, Emphasizing It's Different from Stablecoins] JPMorgan Chase stated on Tuesday that it plans to launch a so-called deposit token, JPMD, on Coinbase's public blockchain Base, which is built on the Ethereum network. The token will provide customers with 24/7 settlement services and the ability to pay interest to holders. The Wall Street giant stated that this is a so-called "permissioned token," meaning it is limited to JPMorgan Chase's institutional clients only—different from most publicly circulating stablecoins. [Tesla's Stock Falls Due to Temporary Production Halt News] Tesla's stock price fell by 3.88% on Tuesday amid news that the company would suspend production of the Cybertruck and Model Y car models at its Austin, Texas, factory for a week. It is reported that the production halt for maintenance will begin on June 30, marking the third similar shutdown at the Austin factory in the past year. [Meta to Launch AI Glasses in Collaboration with Prada and Oakley] Market news on Tuesday reported that Meta and its AI glasses partner EssilorLuxottica plan to launch new AI glasses products under the Prada and Oakley brands. Meta had already announced on Monday that it would unveil a new collaboration with Oakley this week, focusing on sports scenarios. [Intel Reportedly to Cut Up to 20% of Employees in Its Foundry Division] An internal memo disclosed by the media on Tuesday revealed that Intel plans to reduce its workforce in the foundry business unit by 15% to 20% starting from July. It remains unclear how many employees will be directly affected by this move. Regulatory filings indicate that as of the end of last year, Intel had a total of 108,900 employees.

Before the "Super Central Bank Week" kicked off, the US stock market temporarily recovered from the risk-averse sentiment of last Friday, with all three major indices closing higher on Monday, while gold and crude oil prices pulled back together. As of Monday's close, the S&P 500 rose 0.94% to 6,033.11 points; the Nasdaq Composite Index rose 1.52% to 19,701.21 points; and the Dow Jones Industrial Average rose 0.75% to 42,515.09 points. Spot gold fell nearly $50 to $3,383.62 per ounce, and international oil prices also fell nearly 2%. (Daily chart of the S&P 500 Index, source: TradingView) According to CCTV News, the conflict between Israel and Iran continued overnight and into the morning. Israeli Prime Minister Benjamin Netanyahu stated in a pre-recorded online press conference that Israel's actions would not stop and that Israel was "systematically and continuously destroying Iran's nuclear targets." On the same day, Hossein Dehghan, a senior advisor to the Commander-in-Chief of the Islamic Revolutionary Guard Corps (IRGC) of Iran, said that the IRGC was prepared for a long-term, full-scale war with Israel. Undoubtedly, the progress of this conflict will continue to directly impact the performance of capital markets. Investors will closely monitor the conditions of energy facilities and key shipping routes. The RBC Capital Markets Strategist Team pointed out that, given recent gains, US stock valuations have become stretched. In the worst-case scenario, if the situation in the Middle East drives up energy prices, leading to "severe" inflation in the US, the S&P 500 could experience a significant correction. Starting from noon Beijing time on Tuesday, multiple central banks will gradually disclose their interest rate decisions. The market will closely monitor the Bank of Japan's statements and actions regarding the "Japanese bond storm," the US Fed's outlook statements, and the Swiss National Bank's move back to zero interest rates (or even the possibility of negative rates). Performance of Popular Stocks US tech giants rebounded collectively on Monday. Apple rose 1%, Microsoft rose 0.88%, Amazon rose 1.89%, NVIDIA rose 1.92%, Alphabet (Google-A) rose 1.20%, Tesla rose 1.17%, Meta rose 2.9%, and Advanced Micro Devices (AMD) rose 8.81%. Chinese concept stocks also showed a broad-based rally, with the Nasdaq Golden Dragon China Index closing up 2.07%. As of the close, Alibaba rose 2.74%, JD.com rose 2.2%, Baidu rose 1.45%, Pinduoduo rose 2.2%, Bilibili rose 5.64%, NIO rose 0.43%, NetEase rose 1.31%, Futu Holdings rose 10.77%, Jinko Solar rose 3.13%, Tuya Smart rose 4.4%, 21Vianet Group rose 4.41%, and GDS Holdings rose 9.5%. Company News [Circle's Share Price Hits New High, CEO Predicts Stablecoin's "iPhone Moment" is Imminent] Cryptocurrency stablecoin company Circle closed up 13.1% on Monday to $151, just shy of quintupling its IPO price ($31). Jeremy Allaire, Circle's co-founder and CEO, said over the weekend that while the "iPhone moment" for cryptocurrency stablecoins has not yet arrived, he expects it to come soon. On the policy front, the US Senate is expected to vote on the GENIUS Act as early as this Tuesday. [Sarepta's Share Price Collapses: Another Patient Dies After Gene Therapy Treatment] Biopharmaceutical company Sarepta Therapeutics plummeted 42.12% on Monday after the second patient treated with its gene therapy, Elevidys, died, raising questions about the therapy's safety. It is understood that Elevidys is the only gene therapy approved by the US Food and Drug Administration (FDA) for the treatment of the rare Duchenne muscular dystrophy (DMD), a disease in which muscles gradually weaken, typically affecting children or adults after the age of 4. [Alibaba's AI Team Launches AI Models Optimized Based on Apple's MLX Framework] Alibaba's Tongyi Qianwen announced on Monday that it has launched all Qwen3-series models deeply optimized based on Apple's MLX framework, enabling Apple devices, including iPhones, to easily deploy the Tongyi Qianwen series models. [Meta Introduces Paid Ads to WhatsApp for the First Time] Meta announced on Monday that businesses can now place so-called "Status Ads" on the messaging app WhatsApp to guide users to interact with advertisers through WhatsApp's messaging feature. [AMD's Share Price Surges, Analysts Predict Rebound in GPU Business] Compute chip supplier AMD's share price closed up 8.81% on Monday, approaching its yearly high from early January. On the news front, analysts at Piper Sandler raised their target price from $125 to $140 in their latest report. Analysts are excited about AMD's new products released last week and expect the company's GPU business to rebound in Q4.

Macro News 1. The spokesperson of the Ministry of Foreign Affairs announced that, at the invitation of President Kassym-Jomart Tokayev of the Republic of Kazakhstan, President Xi Jinping will attend the second China-Central Asia Summit in Astana, Kazakhstan, from June 16 to 18. 2. Li Qiang chaired a State Council executive meeting to deploy the replication and promotion of pilot measures in the China (Shanghai) Pilot Free Trade Zone, hear reports on the construction of a new model for real estate development and the promotion of high-quality housing, and study measures to optimize the centralised procurement of pharmaceuticals and medical consumables. 3. According to data from the People's Bank of China, at the end of May, the balance of broad money (M2) was 325.78 trillion yuan, up 7.9% YoY. The balance of narrow money (M1) was 108.91 trillion yuan, up 2.3% YoY. The balance of currency in circulation (M0) was 13.13 trillion yuan, up 12.1% YoY. Net cash injection in the first five months was 306.4 billion yuan. The increase in aggregate social financing in January-May was 18.63 trillion yuan, 3.83 trillion yuan more than the same period last year. RMB loans increased by 10.68 trillion yuan in the first five months. 4. On June 13, the People's Bank of China announced again that it would conduct 400 billion yuan of outright reverse repo operations on June 16 with a term of six months (182 days), indicating that the central bank would achieve a net injection for the entire month. 5. The World Trade Organization held the second annual meeting of the Council for Trade in Services in Geneva, Switzerland, on June 13. China pointed out the misleading narrative and erroneous logic of the US's "reciprocal tariff" and urged the US to comply with WTO rules, resolve differences through multilateral cooperation rather than unilateral measures, and jointly maintain the stability of the global trading system with all parties. 6. The New Zealand government's official website announced that starting from November 2025, Chinese passport holders entering New Zealand from Australia with valid Australian tourist, work, student, or family visas will be exempt from visa requirements for stays of up to three months. Industry News 1. Eight departments, including the Ministry of Industry and Information Technology, are soliciting public comments on the "Guidelines for the Security of Outbound Automobile Data (2025 Edition)". Automobile data processors shall declare a security assessment for outbound data if they provide automobile data overseas under any of the following circumstances: (1) providing important data overseas; (2) cumulatively providing personal information (excluding sensitive personal information) of more than 1 million individuals overseas since January 1 of the current year; (3) cumulatively providing sensitive personal information of more than 10,000 individuals overseas since January 1 of the current year; (4) operators of critical information infrastructure providing personal information overseas; (5) other circumstances requiring a security assessment for outbound data as specified by relevant state regulations. 2. On the 15th, the official WeChat account of the Shenzhen Municipal Committee of the Revolutionary Committee of the Chinese Kuomintang (RCCCK) published an article by He Jie, Chairman of the Shenzhen Municipal Committee of the RCCCK, discussing Shenzhen's new mission in comprehensive reform. He Jie stated that relevant departments in Shenzhen are currently formulating relevant listing rules, with the expectation of piloting the secondary listing of red-chip stocks, which will provide more convenient and efficient listing channels for science and technology innovation enterprises. He Jie emphasized that the blueprint for comprehensive reform "2.0" has already been drawn up, and the key lies in effective implementation. Many reforms are still framework-based and directional in nature, requiring integration with practical needs, particularly achieving an organic combination of "top-level design and local initiatives." 3. According to statistics from Choice, as of June 14th, 105 public offering products (with multiple share classes combined) have been liquidated since the beginning of this year. In terms of termination reasons, 83 products were terminated due to the net asset value of the fund falling below contractual limits, 21 products were terminated with the consent of the fund holders' meeting, and 1 product was terminated due to contract expiration. Among these, equity liquidations accounted for 70%, with industry-themed funds in sectors such as new energy, pharmaceuticals, and consumption becoming the "hardest-hit areas." 4. The China Securities Regulatory Commission (CSRC) issued an administrative penalty decision. During the period in question, the account group controlled by Tu Wenbin had significant capital advantages, manipulating the prices of multiple stocks through continuous trading, driving up stock prices, large-volume limit-up orders, and false order placements and cancellations. The CSRC decided to impose penalties, with the total amount of fines and confiscations reaching nearly 77 million yuan. 5. On June 15th, a reporter learned from China National Nuclear Corporation (CNNC) that yttrium-90 glass microspheres irradiated by Qinshan Nuclear Power's "Hefu No. 1" reactor were successfully removed from the reactor and passed relevant detections, marking China's successful mastery of the technology for producing yttrium-90 in commercial reactors, enabling mass production. 6. The opening forum of the Golden Goblet Film Forum at the 27th Shanghai International Film Festival was held on June 15th. Participants unanimously agreed that the current film market has reached a moment for a fresh start. Facing industry challenges, chairmen and executives of multiple listed film companies discussed solutions, with directions such as increasing non-ticket revenue, reducing the number of films produced, and lowering production costs emerging as potential solutions. Corporate News 1. Kweichow Moutai announced an adjustment to its 2024 annual profit distribution plan, increasing the dividend per share to 27.673 yuan/share. 2. On June 14th, POP MART Korea issued an announcement stating that due to concerns about potential safety accidents at recent offline sales venues, the company has decided to temporarily suspend offline sales of the entire LABUBU plush toy and LABUBU plush keychain series. 3. GAC Group issued a commitment announcement, stating that it will ensure the fulfillment of dealer rebates within two months from today. 4. Guotai Haitong Securities announced that it has received an administrative licensing decision from the People's Bank of China (PBOC) for the issuance of 15 billion yuan in science and technology innovation bonds. 5. Yong'an Pharmaceutical announced that the company's stock price has risen significantly in the short term, severely deviating from the overall market trend, and there is a high risk of speculation. 6. *ST Tongzhou announced that the company's stock will be suspended for one day on June 16, and starting from June 17, the delisting risk warning and other risk warnings will be revoked, with the stock abbreviation changing to Tongzhou Electronics. 7. Haimo Technologies announced that the controlling shareholder and actual controller are proposed to be changed to Fan Zhonghua, and the stock will resume trading from June 16. 8. *ST Haiyue announced that it will repurchase company shares worth 30 million to 50 million yuan during the delisting consolidation period. 9. Huayang New Materials issued a stock trading risk warning announcement, stating that the company does not possess the attributes of rare earth permanent magnets. 10. Honghui Fruits & Vegetables announced that the controlling shareholder is proposed to be changed to Shenze Ruitai, and the company's stock and convertible bonds will resume trading from the opening of the market on June 16. 11. Ruifeng Gaocai issued an announcement in response to rumors about the board secretary being placed under investigation, stating that the investigation does not involve the company's stock trading and that current production and operations are normal. 12. Haers stated on an interactive platform that its past cooperation with POP MART has been terminated, and the scope of the previous cooperation did not include Labubu. Global Markets 3. According to CCTV News, US President Trump stated on social media in the early hours of the 15th (Eastern Time) that "the United States has nothing to do with tonight's attacks on Iran" and warned that if Iran attacks the US in any form, the US armed forces will "respond with full force on an unprecedented scale." In addition, Trump claimed that the US could "easily facilitate an agreement to end this bloody conflict," but did not elaborate on how the agreement would be reached. 4. On Friday last week, US stocks opened lower and continued to decline, with all three major indices falling more than 1%. The Dow Jones Industrial Average fell 1.32% for the week; the Nasdaq Composite fell 0.63% for the week; and the S&P 500 index fell 0.39% for the week. Most large-cap tech stocks declined, with Intel falling more than 3% and Nvidia falling more than 2%; Tesla rose approximately 2%. The energy sector bucked the trend and surged, with Houston Energy rising more than 119% and US Energy rising more than 55%. Drone manufacturer Airo's US IPO closed up 140% on its first day. Oracle rose more than 7% for the week, nearly 24%, marking its best weekly performance since 2001. Most popular Chinese ADRs closed lower, with the Nasdaq Golden Dragon China Index falling 2.74%. Fangdd Network fell more than 9%, WeRide fell more than 7%, Kingsoft Cloud fell more than 6%, XPeng Motors fell more than 5%, Alibaba, Bilibili, and Li Auto all fell more than 3%, and JD.com, Pinduoduo, and Baidu all fell more than 2%. Investment Opportunities Reference 1. Xiaomi Auto unveils solid-state battery patent; institutions say eVTOL + humanoid robots open up incremental space for solid-state batteries Intellectual property information from Tianyancha shows that recently, Xiaomi Auto Technology Co., Ltd. applied for a patent titled "Solid-state battery composite electrode, preparation method, and solid-state battery comprising the composite electrode," which has been made public. The abstract indicates that the solid-state battery composite electrode disclosed in the patent effectively shortens the transmission path of metal ions in thick electrodes and accelerates the transmission rate of metal ions between electrodes, featuring high electrode loading and C-rate performance. Dongxing Securities stated that with the gradual entry of fields such as eVTOL and humanoid robots into a phase of rapid growth, along with the release of technological solutions and industrialisation application timelines for all-solid-state batteries by various enterprises, driven by sustained new demand, the application and implementation of solid-state battery technology is expected to accelerate, with the industrialisation process already showing an accelerating trend. Battery enterprises with a first-mover advantage in solid-state battery technology and leading application deployment will primarily benefit. Sihan Industry Research Institute believes that AI is empowering industrial transformation, with eVTOL and humanoid robots opening up incremental space for solid-state batteries. 2. AI inference demand is accelerating, and this solution has become a focus for self-development among major cloud providers According to media reports, while GPUs have advantages in general-purpose accelerated computing scenarios, they face challenges such as high costs and power consumption in specific scenarios, prompting buyers to seek alternative types of chips for support. Customised ASIC chips have become a focal point of attention. Recently, NVIDIA introduced NVLink Fusion, directly targeting Broadcom's high-growth market: AI custom chips. This also means there are new entrants in the ASIC chip market. As AI models become increasingly powerful, the demand for AI inference is accelerating, with ASIC customised solutions offering better energy efficiency and cost advantages becoming a focus for self-development among major cloud providers, with upgraded versions typically released every 1-2 years. Guojin Securities believes that compared to GPUs, ASICs can be custom-developed for specific business scenarios, and the substantial demand for inference computing power and cost reduction will effectively drive the growth of ASIC demand. They are optimistic about ASIC design service companies, Ethernet white-box switch producers, Ethernet switching chip producers, AEC producers, and PCB producers. 3. Against the backdrop of strong supply constraints and a concentrated industry structure, these chemicals are currently in a price upcycle Institutions have pointed out that as temperatures rise, the demand for refrigerant maintenance is gradually becoming robust, with genuine sales boosting channel price confidence. Downstream air conditioner production schedules from June to August remain high on a YoY basis, with the demand side continuing to provide positive feedback. The long-term bullish trend for refrigerants remains unchanged. Against the backdrop of equal domestic and international trade quotes for mainstream refrigerants, the performance release certainty of refrigerant-related producers has strengthened. Founder Securities pointed out that refrigerants are one of the largest and most widely applied segments in the fluorochemical industry. The Montreal Protocol has driven the generational transition of refrigerants. Currently, the refrigerant industry is in a phase of accelerated reduction of second-generation refrigerants, quota freezing of third-generation refrigerants, and patent protection for fourth-generation refrigerants. Against the backdrop of strong supply constraints and a concentrated industry structure, second- and third-generation refrigerants are currently in a price upcycle. The downstream air conditioning and automotive industries are expected to maintain growth trends, with third-generation refrigerants expected to see both volume and price increases. In addition, fluorine-containing fine chemicals are a niche but high-quality segment within the fluorine chemical industry, characterized by high product barriers and added value, with significant growth in market demand in recent years. With the development of emerging industries such as new energy and electronics, their market size continues to expand. 4. Institutions Say Defense and Military Demand Expected to Recover, with Long-Term Growth Certainty in Relevant Sectors Research reports from institutions indicate that, as 2025 marks the final year of the "14th Five-Year Plan" and the planning year for the "15th Five-Year Plan," demand in the defense and military sector is expected to recover. Research reports from Northeast Securities point out that, at the current juncture, as the "14th Five-Year Plan" enters its final year, disruptive factors in the military industry have largely been eliminated, and downstream demand is showing restorative growth. Meanwhile, with the impending 2027 construction target, medium and long-term goals also provide clear guidance for the industry's development: to basically achieve the modernization of national defense and the military by 2035, and to comprehensively build the People's Liberation Army into a world-class military by 2050. Along with the recovery in demand and the gradual optimization of capacity structure, the defense and military sector is expected to see significant improvement, with high safety margins and long-term growth certainty.

On Friday (June 13), US stocks opened lower and continued to decline, with all three major indices closing in the red. At the close, the Dow Jones Industrial Average fell 1.79% to 42,197.79 points; the S&P 500 fell 1.13% to 5,976.97 points; and the Nasdaq Composite Index fell 1.3% to 19,406.83 points. For the week, the Dow fell 1.32%, the S&P 500 fell 0.39%, and the Nasdaq fell 0.63%, all ending a two-week winning streak. In the early hours of Friday (June 13) local time, tensions in the Middle East escalated, causing several popular US stocks to decline significantly during the night session. Affected by geopolitical tensions, international crude oil futures settled sharply higher, rising over 7%. WTI July crude oil futures rose 7.26%, and Brent August crude oil futures rose 7.02%. US COMEX gold futures rose 1.47%. Despite the overall decline in US stocks, sectors such as energy and precious metals rallied against the trend. ExxonMobil rose 2.18%, ConocoPhillips rose 2.4%; VanEck Gold Miners ETF rose 1.74%, and Newmont Corporation rose 3.54%. Louis Navellier, Chief Investment Officer at Navellier & Associates, said, "The lasting damage could be to crude oil prices. If oil prices do not pull back soon, it will certainly cause some damage to US inflation data." Performance of Popular Stocks Most large-cap tech stocks declined, with (ranked by market capitalization) Microsoft falling 0.82%, NVIDIA falling 2.09%; Apple falling 1.38%, Amazon falling 0.53%, Alphabet Class C falling 0.62%, Meta falling 1.51%, Broadcom falling 2.88%, and Tesla rising 1.94%. Oracle rose 7.69%, gaining 23.68% for the week, marking its best weekly performance since 2001. Drone manufacturer AIRO Group surged 140% on its first day of trading. Among Chinese stocks listed in the US, the Nasdaq Golden Dragon China Index fell 2.74%, declining 0.77% for the week. Most popular Chinese stocks listed in the US closed lower, with Pony.ai falling 7.24%, XPeng Motors falling 5.46%, Li Auto falling 3.84%, Alibaba falling 3.22%, NIO falling 3.04%, Pinduoduo falling 2.76%, JD.com falling 2.53%, New Oriental falling 2.33%, Tencent Music Entertainment falling 2.13%, and Baidu falling 2.06%. Company News [Amazon Restructures Healthcare Business] To streamline its structure, Amazon is reorganizing its healthcare business into six "pillars." Previously, Amazon had lost several healthcare executives in recent months. After acquiring PillPack and One Medical and launching some of its own services, Amazon has been struggling to find a consistent strategy in the healthcare market. [AMD Unveils Two Generations of Flagship AI Chips to Compete with NVIDIA; Morgan Stanley: MI400 Could Be a Key Inflection Point] At the AMD Advancing AI conference, AMD showcased its strongest lineup of AI products ever, including flagship AI chips for data centers, AI software stacks, AI rack-level infrastructure, AI network cards, and DPUs, fully demonstrating its ambition to compete with NVIDIA. Morgan Stanley stated that AMD has released the MI350 as expected, but the focus remains on the rack-level MI400/450 products to be launched next year. If these products can be delivered on schedule, they could have a greater impact. [US eVTOL Giant Archer Raises $850 Million] Archer Aviation, a well-known US electric vertical takeoff and landing (eVTOL) aircraft company, announced that it has raised $850 million through the sale of shares. Archer stated that it plans to use the $850 million to support new infrastructure construction and launch an AI-based aviation software platform.

A month ago, Caixin reported that as Trump's erratic tariff policies last month triggered a wave of selling of US assets, a new wave of "de-dollarization" was gaining momentum in Asia. Now, an increasing number of market participants are clearly unable to ignore the "rise" of this trend... On May 26, ASEAN committed in its newly released "Strategic Plan for the ASEAN Economic Community 2026-2030" to promoting the use of local currencies in trade and investment, and proposed measures such as expanding the use of local currencies for settlement and strengthening regional payment connectivity to mitigate the impact of exchange rate fluctuations. Lin Li, Head of Asia Global Markets Research at Mitsubishi UFJ Financial Group (MUFG), told the media that as Asian economies seek to reduce their reliance on the US dollar, particularly by using their own currencies as a medium of exchange to reduce foreign exchange risks, the trend of de-dollarization is strengthening. Although de-dollarization itself is not a new phenomenon, recent developments may have undergone a qualitative change. Investors and officials are beginning to recognize that, even if the US dollar has not been openly weaponized in trade negotiations, it can and has been used as a "bargaining chip." Mitul Kotecha, Head of Asia FX and Emerging Markets Macro Strategy at Barclays, said that this has prompted a reevaluation of investment portfolios that were previously heavily overweight in the US dollar. "Countries are focusing on the fact that the US dollar has been and can be used as a weapon in trade, direct sanctions, and other areas... I think this is the real change over the past few months," he said. Two Forces Accelerating the Evolution A recent report by Bank of America pointed out that the trend of ASEAN moving away from the US dollar is intensifying, driven by two main forces: ① Individuals and businesses are gradually starting to convert their US dollar savings back into local currencies; ② Large investors are beginning to hedge foreign investments more actively. Abhay Gupta, Asia Fixed Income and FX Strategist at Bank of America, said, "The de-dollarization process in ASEAN may accelerate, primarily through the conversion of foreign exchange deposits accumulated since 2022." In addition to ASEAN, BRICS countries, including India and China, are also actively developing and promoting their own payment systems to bypass traditional Western payment systems like SWIFT and reduce reliance on the US dollar. China has also been promoting the use of the yuan for bilateral trade settlement. Barclays' Kotecha pointed out that de-dollarization is a "continuous, slow process," but the gradual decline of the US dollar's status can be witnessed in both central bank reserve shares and trade settlement shares. He specifically mentioned the substantial overseas assets held by countries such as Singapore, South Korea, and China, which have significant potential for repatriating foreign exchange earnings. Andy Ji, Asia FX and Rates Analyst at ITC Markets, shares this sentiment. He points out that economies most reliant on trade will experience a more pronounced decline in demand for the US dollar. He specifically mentioned the economies within the 10+3 cooperation mechanism, which includes China, Japan, South Korea, and the 10 ASEAN member states. As of November last year, over 80% of trade in this region was still denominated in US dollars. Nomura Securities has observed a new trend: Asian investors are strengthening their hedging against US dollar exposure. Nomura notes that as Asian investors increasingly hedge against US dollar risks, a trend of de-dollarization is also emerging. Foreign exchange hedging refers to investors protecting themselves from significant currency value fluctuations by locking in exchange rates to avoid losses in the event of unexpected weakening or strengthening of the US dollar. Craig Chan, Global Head of FX Strategy at Nomura Securities, stated, "Some of the currencies that have recently performed strongly include the Japanese yen, South Korean won, and New Taiwan dollar." He observed that a considerable portion of foreign exchange hedging transactions come from institutional investors such as life insurance companies, pension funds, and hedge funds. According to Nomura Securities, the hedging ratio of Japanese life insurance companies was originally around 44%. In April and May, this figure rose to around 48%. Nomura Securities estimates that the hedging ratio of life insurance companies in Taiwan, China, is around 70%. When investors hedge against US dollar risks, they sell US dollars and buy local or other currencies, which increases demand for the US dollar and causes non-US currencies to appreciate against the US dollar. Is a structural shift underway? Clearly, the rise of this de-dollarization trend has once again raised a "perennial" question: Is this merely a phase of temporary reduction in US dollar holdings, or a more drastic structural shift? In fact, although similar shifts are more pronounced in Asia, the world is actually reducing its reliance on the US dollar—the share of the US dollar in global foreign exchange reserves has declined from over 70% in 2000 to 57.8% in 2024. Recently, due to uncertainties surrounding a series of decisions by the Trump administration, the US dollar has experienced a significant decline this year, particularly in April. Since the beginning of this year, the US dollar index has fallen by more than 8%, marking the worst performance in the first five months of the year in history, according to Dow Jones Market Data. However, some industry observers also state that despite many countries reducing their reliance on the US dollar, it remains challenging to replace the US dollar as the primary reserve currency. Cedric Chehab, chief economist at BMI, said that, for now, this may still be merely cyclical. He pointed out that it could only transform into a structural trend if the US implements sanctions more aggressively, prompting central banks to be wary of holding excessive US dollars, or if governments mandate pension funds to increase their holdings of domestic assets. Of course, the first threat mentioned by Chehab may have already occurred to some extent. What undoubtedly concerns many foreign entities the most is undoubtedly "Clause 899" in Trump's latest tax reform bill. If approved by Congress, this clause would allow the US to impose additional taxes on companies and investors from countries it deems to be implementing punitive tax policies. George Saravelos, global head of FX research at Deutsche Bank, said that this would mark the formal incorporation of the weaponization of US capital markets into law. Francesco Pesole, FX strategist at ING, pointed out that "Trump's erratic trade policy decisions and the significant depreciation of the US dollar may be encouraging a faster shift towards other currencies." Peter Kinsella, global head of FX strategy at Union Bancaire Privée, reminded people to distinguish between the weakening of the US dollar and de-dollarization. "The US dollar has gone through multiple cycles of depreciation, yet its hegemony as a reserve currency remains unchanged," he added. Even with reduced exposure, the US dollar's core position in trade invoicing remains solid—over half of global trade was still settled in US dollars in April this year. However, Kinsella also mentioned that, "the long-term declining trend in the US dollar's status as a reserve asset will continue, and I firmly believe that gold will be the biggest beneficiary." According to a report released by the European Central Bank on Wednesday, gold accounted for 20% of global official reserves in 2024, making it the second-largest reserve asset globally, second only to the US dollar at 46%.

On Thursday (June 12), US stocks opened lower but closed higher, with all three major indexes rising collectively. Both the Dow and the S&P 500 closed at their highest levels in at least three months. At the close, the Dow Jones Industrial Average rose 0.24% to 42,967.62 points, its highest level since March 6; the S&P 500 rose 0.38% to 6,045.26 points, a new high since February 21; and the Nasdaq Composite Index rose 0.24% to 19,662.48 points. Among the 30 Dow components, 19 rose and 11 fell. The biggest decliner was Boeing (-4.79%). Earlier in the day, an Air India Boeing 787-8 aircraft crashed shortly after takeoff, marking the first fatal accident involving the Boeing 787 model. Driven by Oracle's positive earnings report after the market close the previous day, AI-related stocks generally rose. Oracle surged 13.31%, closing at an all-time high, with its total market capitalization reaching $560 billion, surpassing Mastercard and Netflix. Oracle's earnings report showed that the company's revenue and earnings across all segments exceeded analysts' expectations. To top it off, the company also raised its revenue forecast for the next fiscal year and provided an optimistic outlook for accelerated growth in cloud infrastructure. Oracle CEO Safra Catz stated on the earnings call that Oracle expects total revenue for fiscal 2026 to reach at least $67 billion, representing a year-over-year increase of approximately 16.7%, up from the previous forecast of 15% growth. As previously reported by Cailian Press, Trump had announced an AI infrastructure project named "Stargate," with SoftBank, OpenAI, and Oracle as the initial three companies involved in this $500 billion project. In addition to AI factors, the better-than-expected PPI report before the market open also boosted US stocks. Data showed that the US PPI rose 2.6% YoY in May, in line with expectations; core PPI rose 3%, below the market consensus of 3.1%. Analysts believe this indicates that tariffs have not yet imposed higher inflationary pressure on consumers, further boosting expectations for a US Fed interest rate cut in September. Similar to yesterday's CPI report, Trump once again pressured the US Fed to cut interest rates after the data release. Tom Hainlin, Senior Investment Strategist at U.S. Bank Asset Management Group, said that the future direction of US stocks depends on the resolution of tariff issues and how that resolution affects government budgets and US Fed policies. Hainlin stated, "We believe that the uncertainty surrounding the progress of trade negotiations remains the fundamental situation for the stock market. The market is currently experiencing sideways movement, and it is difficult to see a sustained breakthrough until we reach a conclusion." Performance of Popular Stocks Large-cap tech stocks had mixed changes. (Ranked by market capitalization) Microsoft rose by 1.32%, Nvidia rose by 1.52%; Apple rose by 0.21%, Amazon rose by 0.02%, Google C fell by 1.02%, Meta fell by 0.11%, Broadcom rose by 1.25%, and Tesla fell by 2.23%. US fintech company Chime saw its shares rise by 37.44% on its first day of trading. Among Chinese ADRs, the Nasdaq Golden Dragon China Index fell by 0.41%. Most popular Chinese ADRs declined. XPeng Motors fell by 5.87%, NIO fell by 3.21%, Li Auto fell by 1.8%, Alibaba fell by 1.45%, New Oriental fell by 0.96%, and JD.com fell by 0.36%. Zai Lab rose by 3.94%, Kingsoft Cloud rose by 3.74%, Tencent Music rose by 1.29%, Baidu rose by 0.3%, and Pinduoduo rose by 0.26%. Company News [Trump Signs Resolution to Block California's Plan to Ban Sales of New Gasoline-Powered Cars] US President Trump signed a resolution at the White House on the 12th to block California's plan to be the first state in the US to ban sales of new gasoline-powered cars by 2035. [Apple Plans to Upgrade Long-Delayed AI Siri in Spring 2026] Apple plans to upgrade its long-delayed AI Siri in spring 2026. The company hopes to include new Siri features in the iOS 26.4 software. [Jensen Huang: Autonomous Driving and Robots Will Take Off in the Next Few Years] Nvidia CEO Jensen Huang said on Thursday that autonomous vehicles and robotics technology will flourish in the next few years. Nvidia plays an important role in advancing the development of autonomous vehicles, providing both hardware and software solutions. Musk expressed a similar view to Huang's last month, stating that for Tesla, the most important things in the long run are autonomous driving and the humanoid robot "Optimus." [Lisa Su: AI Chip Market Size to Exceed $500 Billion by 2028] AMD CEO Lisa Su said that the AI chip market size will exceed $500 billion by 2028, and the inference chip market will grow even faster. Musk's AI startup xAI uses AMD's MI300 AI chips, and AMD has launched the MI350 and MI355 chips. The MI400 chip will be launched next year. [Coinbase: Will Launch Its First Credit Card, Coinbase One Card, on American Express's Network] Cryptocurrency exchange Coinbase announced that it will launch its first credit card, the Coinbase One Card, on American Express's network. This card is exclusively for Coinbase One members in the US. Each purchase transaction will earn up to 4% cashback in Bitcoin. More information will be disclosed in the fall of 2025. [Adobe's Q2 revenue was $5.87 billion, exceeding expectations] Adobe's Q2 revenue was $5.87 billion, compared to analysts' expectations of $5.80 billion. The adjusted EPS for Q2 was $5.06, compared to analysts' expectations of $4.98. The company is expected to generate annual revenue of $23.5 billion to $23.6 billion, up from its original forecast of $23.3 billion to $23.55 billion. The company expects Q3 revenue to be $5.88 billion to $5.93 billion, compared to analysts' expectations of $5.88 billion. The company expects Q3 digital media revenue to be $4.37 billion to $4.40 billion, compared to analysts' expectations of $4.34 billion.

Macro News 1. On the afternoon of June 12, Premier Li Qiang met with European Central Bank President Christine Lagarde at the Great Hall of the People in Beijing. Li Qiang pointed out that China and Europe have strong economic complementarity, with China possessing a super-sized market advantage and continuously unleashing market potential. There is significant cooperation potential between China and Europe in many fields. China is willing to strengthen market connectivity and industrial synergy with Europe to add more momentum to their respective development. Lagarde stated that under the current international situation full of uncertainties, maintaining high-level exchanges and dialogue cooperation between Europe and China is crucial. Tariff wars and trade wars only lead to lose-lose outcomes, while adhering to multilateralism and strengthening open cooperation is the right choice. 2. On the afternoon of June 12, the Ministry of Commerce held a regular press conference. A reporter inquired about the first meeting of the China-US economic and trade consultation mechanism. Ministry of Commerce spokesperson He Yadong stated that from June 9 to 10 local time, the China-US economic and trade teams held the first meeting of the consultation mechanism in London, UK. The two sides reached a principled consensus on implementing the important consensus of the June 5 phone call between the two heads of state and the framework of measures to consolidate the outcomes of the Geneva economic and trade talks, making new progress in addressing each other's economic and trade concerns. Regarding the rare earth issue, as a responsible major country, China fully considers the reasonable needs and concerns of various countries in the private sector, reviews applications for export licenses of rare earth-related items in accordance with laws and regulations, has approved a certain number of compliant applications according to law, and will continue to strengthen the approval of compliant applications. 3. On June 11, People's Bank of China Governor Pan Gongsheng held the first annual meeting with European Central Bank President Christine Lagarde. The two sides exchanged in-depth views on topics including the economic and financial situations of China and Europe, reform of the international monetary system, global financial regulation, and key areas of cooperation between the two central banks. After the meeting, the two sides signed the Memorandum of Understanding on Cooperation between the People's Bank of China and the European Central Bank. 4. A passenger plane crashed at Ahmedabad Airport in Gujarat, India, on June 12. According to reports, all 242 people on board were killed. CCTV News learned that local police found one survivor in the Indian plane crash. 5. Foreign Ministry spokesperson Lin Jian presided over the regular press conference yesterday. A foreign media reporter asked about US President Trump's post on his social media platform, claiming that an agreement had been reached with China, such as China providing rare earth magnets. Lin Jian stated that China always honors its words with actions. Since a consensus has been reached, both sides should abide by it, and China hopes the US will work with China to implement the important consensus reached in the phone call between the two heads of state. Industry News 2. Recently, the People's Bank of China and the State Administration of Foreign Exchange jointly issued the "Several Measures on Financial Support for Fujian to Explore a New Path for Cross-Strait Integrated Development and Build a Demonstration Zone for Cross-Strait Integrated Development." TheThe "Several Measures" proposes 12 policy measures in four aspects: optimizing the financial ecosystem of the cross-strait shared "living circle", serving the construction of the first home for Taiwan compatriots and Taiwan-funded enterprises to land on the mainland, supporting the pilot program for high-level opening-up of cross-border trade in Fuzhou, Xiamen, and Quanzhou, supporting the facilitation of cross-border investment and financing under the capital account, comprehensively strengthening financial supervision, and effectively preventing and defusing financial risks. These measures are of great significance for continuously deepening the construction of a demonstration zone for cross-strait integrated development and promoting high-level financial opening-up. The People's Bank of China and the State Administration of Foreign Exchange will promote the detailed implementation of various policy measures outlined in the "Several Measures", further intensify financial support for the integrated development across the Taiwan Strait, and provide strong financial support for the construction of the demonstration zone for cross-strait integrated development. 3. At the Annual Meeting of the Asia Traders Forum & Stock Trading Summit 2025, Tim LUI, Chairman of the Securities and Futures Commission of Hong Kong, stated that the SFC is studying plans to adjust the number of shares per trading lot, thereby enhancing the convenience of trading high-priced stocks and odd lots, and further improving market liquidity. 4. The General Office of the People's Government of the Guangxi Zhuang Autonomous Region recently issued the "Implementation Plan for Special Actions to Boost Consumption in Guangxi". It mentions expanding support for trade-in policies for automobiles, home appliances, home improvement, kitchen and bathroom products, and e-bikes, as well as subsidies for purchasing new 3C digital products. 5. In 2025, Urumqi plans to develop 82 cultural and tourism projects with a total investment of 44.815 billion yuan and an annual planned investment of 5.4116 billion yuan, representing increases of 76%, 181%, and 170% respectively compared to 2024. The focus will be on introducing a batch of high-end hotel cluster projects, creating a number of major construction projects, and building a comprehensive cultural and tourism space integrating cultural experiences, commercial consumption, and leisure and entertainment. 6. With the "Suzhou Super League" gaining widespread popularity, some netizens have called on Sichuan to host similar football events through the "Ask the Government Sichuan" platform. In response, the Sichuan Provincial Sports Bureau stated that the "Bashu Xiongqi Cup" Sichuan Super League will learn from the healthy development experience of the "Suzhou Super League", improve the event system, strengthen supervision, promote fair competition, mobilize social forces to participate, facilitate the development of mass football and campus football, and support nationwide fitness. Company News 1. New China Life Insurance announced its intention to subscribe for private equity fund shares with an investment not exceeding 15 billion yuan. 2. China Vanke Co., Ltd. announced that it sold a total of 72.96 million A-share treasury shares from June 10 to June 12, which will help supplement the company's working capital. 3. *ST Gongzhi announced that the Shenzhen Stock Exchange has decided to terminate the listing of the company's shares. 4. Yidian Technology stated on an interactive platform that POP MART is an important client of the company. 5. ST Jinyi announced that the other risk warnings for the company's shares have been revoked, and trading will resume from June 16. 6. Xiaofang Pharmaceutical announced a collaboration with Shanghai Dermatology Hospital to develop Compound Platycladi Tincture, a Class 1.1 traditional Chinese medicine for treating hair loss. 7. PowerChina secured a 10.77 billion yuan offshore wind power EPC turnkey project. 8. Qingmu Technology clarified that it currently only provides e-commerce agency operation services for Pop Mart's Tmall flagship store. 9. Taiji Co., Ltd. disclosed that its controlling shareholder and actual controller are planning matters related to changes in company control, leading to a trading suspension. 10. Hengbao Co., Ltd. announced that director and vice president Gao Qiang plans to sell no more than 197,500 shares. 11. Jingjin Equipment reported that its actual controller, chairman, and general manager has been placed under retention. 12. Feiliner completed verification work, with its shares resuming trading on June 13. Global Markets US and European stocks showed mixed performance, with both the S&P 500 and Dow Jones hitting at least three-month closing highs. US stocks opened lower but closed higher, with all three major indices posting slight gains. The S&P 500 rose 0.38%, the Dow gained 0.24%, and the Nasdaq advanced 0.24%. The S&P 500 reached its highest closing level since late February, while the Dow achieved its best close since early March. Oracle surged over 13% to a record high after exceeding Q4 earnings expectations. US fintech firm Chime jumped over 37% on its debut. Boeing fell nearly 5% following an Air India Boeing 787 crash. European indices closed mixed, with Germany's DAX30 down 0.48%. International crude oil futures settled slightly lower. WTI July crude dropped 0.16%, while Brent August crude declined 0.59%. COMEX gold futures rose 0.84% to $3,406.8/oz, and silver futures gained 0.41% to $36.41/oz. Investment Opportunities 1. Pop Mart Expanded Capacity Early This Year, But Demand Far Exceeds Supply Chain Response Media reports indicate that since Chinese New Year, Pop Mart has urgently recalled workers and expanded capacity to meet surging demand driven by rising IP popularity. An insider described this as a "sweet trouble" where market demand vastly outpaces supply chain responsiveness, noting "even overworked sewing machines can't keep up." The core appeal of IP collectibles lies in instant emotional gratification. Labubu's distinctive features meet specific demands, amplified through social media. Current supply shortages and product scarcity further elevate circulation premiums, significantly boosting visibility. Zhongtai Securities released a research report stating that it is optimistic about the investment value of the IP industry and anticipates the growth and commercialization of major IPs. Three directions are worth noting: (1) Leading companies in the IP2C model for trendy toys that possess a high-quality IP matrix, strong operational capabilities, and channel strength; (2) Content producers with strong content creation capabilities; (3) IP operators in the IP2B2C model that possess high-quality IPs and B-end customer resources. 2. German nuclear fusion startup ProximaFusion secures record-breaking funding On Wednesday local time, German nuclear fusion startup ProximaFusion announced that it had raised €130 million (equivalent to $148 million) in a record-breaking funding round. Investors have high hopes that the company will be the first to build the world's first commercial nuclear fusion power plant. ProximaFusion's Series A funding round was co-led by CherryVentures and BaldertonCapital, marking the largest private nuclear fusion investment round in Europe to date. In recent years, market interest in nuclear fusion technology has continued to grow. Founder Securities' machinery equipment team is optimistic that the timeline for global nuclear fusion could be advanced. Currently, the European Commission (EC) has officially launched a four-week consultation period, which will help the EU establish a leading position in global nuclear fusion development and accelerate the commercialization of fusion energy. 3. Cumulative financing exceeds 1 billion yuan in the first half of the year; experts say commercial space is experiencing unprecedented development opportunities Media reports indicate that China's commercial space industry in 2025 is accelerating at an unprecedented pace towards industrialization. One of the most telling signs is the "real money" coming from the capital market. According to incomplete statistics by reporters, in the first five months of this year alone, the publicly disclosed and estimable financing amounts in China's commercial space sector have cumulatively exceeded 1 billion yuan. Recently, there have been continuous developments in the commercial space sector. LandSpace Technology Corporation's independently developed ZQ-2 Modification 2 remote sensing launch vehicle successfully started production and lifted off; Beijing CAS Space Technology Co., Ltd.'s KQ-1 remote sensing 7 launch vehicle was successfully launched; and the "Tada Hu Yang No. 1" satellite was successfully launched by the KQ-1 remote sensing 7 launch vehicle. Experts interviewed stated that after several years of cultivation, China's commercial space industry is flourishing, with enterprises in commercial satellites, commercial rockets, commercial monitoring and control, and other sectors emerging like bamboo shoots after a spring rain. The commercialization of the entire industry chain is being prioritized, and the industry chain ecosystem is continuously improving. With the synergy of policies, technology, and the market, commercial space is experiencing unprecedented development opportunities. 4. AI development brings significant changes to the industry, continuously expanding the space for the industry chain Institutions have pointed out that switching networks are the "blood vessels" of AIDC. Since entering the era of large models, as the scale of clusters has accelerated its expansion, the interconnection requirements between computing cards have rapidly increased. As the hardware core supporting the interconnection network, the industry chain space for switches has been continuously expanding. Guojin Securities believes that domestic large models are rapidly advancing from a scale of hundreds of billions of parameters to trillion and ten trillion parameters, and 800G switches will become an important driver for the rapid growth of the industry. Dell'Oro Group predicts that by 2025, the adoption rate of 800G switch ports is expected to exceed that of 400G data center switch ports, accounting for more than 25% of data center switch ports. The development of the AI industry has brought about significant changes to the switch industry. Along with the development of the domestic AI industry, domestic high-speed switches for training-side applications and domestic medium-speed switches for inference-side applications are on the verge of mass production. CPO, OCS, white-box switches, etc., are expected to become strategic highlands in the domestic switch industry, and enterprises with relevant layouts are worthy of close attention.

The US job market and inflation have both cooled down. In the US, initial jobless claims last week were higher than expected, while continuing claims surged to the highest level since the end of 2021. The US May PPI rose 0.1% MoM, a mild increase that fell short of expectations, adding new evidence of "further slowdown in inflation". Traders have once again fully priced in expectations for two US Fed interest rate cuts this year, with the first cut potentially occurring in September. Following the data release, the US dollar index and US Treasury yields fell sharply, with the US dollar touching a three-year low, spot gold rising, and US stock futures paring losses. Market attention will now turn to the $22 billion auction of 30-year US Treasuries to observe whether investors will shy away from such long-term bonds amid a backdrop of expanding fiscal deficits. Below are the trends of core assets: The three major US stock indices fell slightly, with the Dow Jones Industrial Average down 0.36%, the S&P 500 down 0.2%, and the Nasdaq down 0.2%. European stocks rebounded slightly in tandem with US stocks. German stocks are now down about 0.8%, after earlier falling more than 1.3%. South Korean stocks have risen for seven consecutive sessions. Israel's TA-35 index once fell about 1.7%, marking its biggest drop in two months. The US dollar index once fell more than 1%, the euro rose more than 1.2%, the British pound rose about 0.5%, and the yen appreciated about 1%. US Treasury yields fell across the board, with the 2-year and 10-year yields once falling more than 8 basis points. Spot gold extended gains to more than 1%, while spot silver nearly erased earlier losses of more than 1.7%. Both US crude and Brent crude fell more than 1.6%. US inflation remained mild in May, indicating that current tariffs have not significantly pushed up consumer prices. The market generally expects the US Fed to keep interest rates unchanged at its meeting next week, waiting to observe the impact of Trump's policies on the economy. In the stock market, after the release of PPI and employment data, US stock futures pared losses in pre-market trading. At the start of US trading, the three major indices fell slightly, with the Dow Jones Industrial Average down 0.36%, the S&P 500 down 0.2%, and the Nasdaq down 0.2%. After the S&P 500 rebounded more than 20% from its April low, trading activity in the stock market began to show signs of fatigue. Most Chinese concept stocks fell, with Bilibili down about 1%. Most tech stocks also fell, with Tesla down about 1%. CureVac rose about 35% after reports that BioNTech would acquire the biotech company for $1.25 billion to boost its cancer business. Oracle's shares rose 8.2% to their highest level since January 22. Boeing's shares fell by approximately 5% following the first air crash involving a Boeing 787 aircraft. In the foreign exchange market, the US dollar index fell below 98, dropping more than 1% to a three-year low after the PPI release, before narrowing its losses to less than 0.8%. Following the PPI data, the euro surged more than 1.2% at one point and is now up over 0.8%. The UK economy experienced its most severe contraction in 18 months, with expectations for an interest rate cut soaring. The British pound fell by approximately 0.2% at one point. After the PPI data release, it rose more than 0.5% at one point and is now up about 0.4%. In the bond market, US Treasury yields plummeted significantly. After the PPI data release, yields on both 2-year and 10-year US Treasuries fell more than 8 basis points at one point. In the commodities market, spot gold surged more than 1.1% after the PPI data release, before narrowing its gains to less than 0.9%. Spot silver turned positive, having previously fallen approximately 1.7%, and is now down about 0.2%. Both WTI and Brent crude are now down more than 1.5%. Catalyzed by news of US-Iran tensions, oil prices surged 5% on Wednesday, only to pull back on Thursday. According to Global Times , Iran has threatened to attack US military bases, and the US expects Iran to retaliate against certain US military bases in Iraq. Oman has confirmed that the sixth round of US-Iran nuclear talks will be held on Sunday.

"Cut interest rates by 100 basis points!" Trump speaks out again On the evening of June 11, US President Trump posted on his social media platform "Truth Social" that the latest US CPI data showed positive results, and he called on the US Fed to cut interest rates by 1 percentage point (100 basis points). US Vice President Vance stated that the US Fed's refusal to cut interest rates was a dereliction of duty in monetary policy. Data released by the US Department of Labor showed that the full impact of Trump's across-the-board tariff hikes had not yet fully materialized, with US CPI inflation in May falling short of expectations across the board. The data indicated that the US unadjusted CPI year-on-year rate for May was 2.4%, lower than the market expectation of 2.5%; the seasonally adjusted CPI month-on-month rate for May was 0.1%, lower than the expected 0.2% and the previous value of 0.2%. Excluding food and energy costs, the core CPI rose 2.8% YoY, remaining at the lowest level since March 2021, with an expected value of 2.9% and a previous value of 2.8%; the seasonally adjusted core CPI month-on-month rate for the US in May was 0.1%, with an expected value of 0.3% and a previous value of 0.2%. The US Bureau of Labor Statistics stated that the continued weakness in energy and service prices offset the impact of price increases in other goods, while some key items originally expected to rise due to tariffs, particularly car and clothing prices, actually saw price decreases. The data showed that energy prices fell by 1% in the month, with gasoline prices dropping by 2.6%, and prices for new and used cars falling by 0.3% and 0.5%, respectively. Food prices rose by 0.3%, and housing prices also increased by 0.3%, while clothing prices unexpectedly fell by 0.4%, indicating that the cost increases brought about by tariffs had not yet been passed on to consumers. Nick Timiraos, known as the "Fed Whisperer," commented that the decline in car and clothing prices led to a lower-than-expected reading for the core CPI in May. Some forecasters had believed that these two items would show the early impact of tariffs in May. After the data release, spot gold prices continued to rise, breaking through $3,360 per ounce. The three major US stock index futures surged briefly but then fell. By the close, the S&P 500 index closed down 16.57 points, or 0.27%, at 6,022.24 points. The Dow Jones Industrial Average closed down 1.10 points, or 0.00%, at 42,865.77 points. The Nasdaq closed down 99.11 points, or 0.50%, at 19,615.88 points. The Nasdaq 100 index closed down 81.12 points, or 0.37%, at 21,860.80 points. Trump says "confidence is waning" in reaching a nuclear deal; international oil prices surge According to AFP, both the US and Iran made their latest statements on the US-Iran nuclear negotiations on June 11. US President Trump stated in an interview aired on the same day that his "confidence has waned" in reaching a nuclear deal with Iran. Meanwhile, Iran said on June 11 that if negotiations fail and a conflict breaks out between the US and Iran, it will target US military bases in the Middle East. Upon the news, the crude oil market reacted swiftly. WTI crude oil futures for July delivery closed up $3.17/bbl, a 4.88% increase, at $68.15/bbl. Brent crude oil futures for August delivery closed up $2.90/bbl, a 4.33% increase, at $69.77/bbl. What is the outlook for the cast aluminum alloy futures market? Yesterday, the most-traded AD2511 cast aluminum alloy futures contract closed at 19,400 yuan/mt, up 0.91%. Regarding the current operational logic of the cast aluminum alloy market, Xiao Yufei, head of the Nonferrous Metals Research Team at Nanhua Futures, believes that the supply surplus in the cast aluminum alloy industry will persist. The planned new capacity for domestic aluminum alloy ingots in 2024-2025 is 1.145 million mt/year. However, due to various constraints, the actual capacity that has come online is only 260,000 mt/year. It is expected that in 2025, the cast aluminum alloy industry will continue to see capacity growth but with slower commissioning. According to Xiao Yufei, the downstream consumption of cast aluminum alloy mainly flows into sectors such as transportation, machinery manufacturing, home appliances, and hardware. Among them, transportation vehicles, including cars, motorcycles, and EVs, account for over 70% of downstream demand. Therefore, the demand for cast aluminum alloy primarily depends on the performance of the automotive market. The automotive industry has generally performed well this year, with production and sales showing steady growth compared to the same period last year. However, considering that the H2 is approaching the off-season, the growth rate of cast aluminum alloy demand may slow down. In addition, aluminum scrap inventory is tight, and raw material procurement is difficult. The inability to restock in a timely manner has led to a continuous decline in the raw material inventory of secondary aluminum alloy enterprises. "Finished product inventories are at a relatively high level. Given the current loose supply situation, we believe that the inventory buildup trend of secondary aluminum alloy will persist for some time. Considering the high correlation between aluminum alloy prices and SHFE aluminum prices, spot and futures prices are more inclined towards a backwardation structure," Xiao Yufei said. Fu Ying, a nonferrous metals analyst at the Zheshang Futures Research Center, believes that the current cast aluminum alloy market is in a phase of weak supply and demand. The automotive market, a major end-use application for cast aluminum alloy, is currently in an off-season for production. Under the "produce based on sales" model of alloy enterprises, their operating rates will also decline accordingly. Meanwhile, the trend of weakening demand will become more pronounced, with both social inventory and raw material inventory showing continuous accumulation. Therefore, the spot price of cast aluminum alloy is expected to fluctuate around production costs. The first listed futures contract for cast aluminum alloy was AD2511, with a delivery month of November. According to Chen Xinyi, the head of the Non-Ferrous Metals and New Energy Team at Wuchan Zhongda Futures, the aluminum scrap recycling system is relatively "informal," which leads to a decrease in aluminum scrap recycling volume during holidays. Typically, aluminum scrap supply is relatively tight in Q4, and its prices hold up well compared to primary aluminum. From a demand perspective, ADC12 demand exhibits significant seasonal characteristics, with peak seasons generally occurring from September to January of the following year, and November being a peak consumption month. Therefore, the inter-month price spreads for the AD2511, AD2512, and AD2601 contracts are currently in a contango state. "Before the listing of cast aluminum alloy futures, spot market reference prices were mostly anchored to the Baotai price," Chen Xinyi said. Currently, the Baotai quote for ADC12 is 19,400 yuan/mt. Considering that some registered brands are priced at a discount to the Baotai price and the slim profit margins of alloy enterprises, companies have little incentive to price and sell futures contracts in advance. Currently, the downside room for aluminum scrap prices, which are closely linked to aluminum prices, is limited. This keeps ADC12 prices relatively strong in the short term, with the main operating range being 19,000-19,600 yuan/mt. In practice, according to Chen Xinyi, the ADC12-A00 price spread exhibits significant seasonal characteristics, weakening in Q2 and strengthening in Q3. Affected by policies, despite a capacity utilisation rate as high as 97%, electrolytic aluminum continues to destock, while the supply and demand of secondary aluminum show a surplus, with the current capacity utilisation rate being less than 50%. When the ADC12-A00 price spread is at historically high levels, the substitution effect of primary aluminum for aluminum scrap gradually becomes apparent. Some companies may consider adjusting their raw material ratios, and increased demand for electrolytic aluminum supports price increases, thereby driving the ADC12-A00 price spread to revert. In the short term, Fu Ying stated that cast aluminum alloy futures prices are expected to mainly follow aluminum price fluctuations, with cost support existing below. On the one hand, the most-traded cast aluminum alloy futures contract, AD2511, is still far from its delivery date, and the price trend of cast aluminum alloy is consistent with that of aluminum. The current low inventory and continuous destocking of electrolytic aluminum provide support for aluminum prices. On the other hand, the supply and demand of aluminum scrap are relatively tight, with aluminum scrap costs accounting for nearly 90% of the cost of cast aluminum alloy. The firmness of aluminum scrap prices supports ADC12 prices. However, affected by the traditional off-season, the upside room for cast aluminum alloy prices is also limited. Additionally, under the off-season consumption, the demand for selling hedging by cast aluminum alloy producers is high, which will suppress futures prices. Regarding the key points to be monitored subsequently, Fu Ying believes they mainly include changes in aluminum scrap supply, downstream demand, and the changes and impacts of spot pricing models after the listing of futures. Aluminum scrap supply determines the cost trend of cast aluminum alloy, while downstream demand affects the price spread fluctuations between cast aluminum alloy and primary aluminum. Stronger demand will drive the price spread between the two to revert. Currently, the spot price of cast aluminum alloy mainly refers to the quotes on information websites and the "enterprise quotes + premiums and discounts" model, lacking a relatively open and transparent market mechanism. After the listing of cast aluminum alloy futures, the number of market participants will gradually increase, which will help optimize the spot pricing model.