Breakfast | Iran's large-scale attack on Israel stimulates risk aversion, Citigroup expects Xiaomi's car-making venture to lose 4.1 billion yuan

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Overnight Morning Market

Spot gold opened significantly higher on Monday, at $2366 per ounce, while crude oil and US stock indices opened slightly higher. Safe-haven currencies such as the US dollar stabilized.

Last week, the three major US stock indices fell for the second consecutive week, with the Dow Jones falling over 2.3%, the S&P 500 index down 1.56%, and the Nasdaq down 0.45%. The Hang Seng Index closed almost flat, with the Hang Seng Tech Index up 0.68%. This week, several uncertainties will disrupt the market, with key factors including earnings season, the Federal Reserve's monetary policy stance, and the situation in the Middle East determining whether the market can stabilize quickly.

Important events and data for this week are as follows:

Monday: US retail sales data will be released, New York Fed President Williams will be interviewed by Bloomberg TV. German Chancellor Scholz will make an official visit to China.

Tuesday: China will release Q1 GDP, March total retail sales of consumer goods year-on-year, and March year-on-year industrial added value for large-scale industries. Baidu Create AI Developer Conference 2024 will open.

Wednesday: Fed Chair Powell will participate in a Q&A session, New York Fed President Williams, Richmond Fed President Barkin will give speeches. The IMF and World Bank will hold their 2024 Spring Meetings until April 20.

Thursday: TSMC will release its financial report, ECB President Lagarde, New York Fed President Williams, Atlanta Fed President Bostic, Fed Governor Bowman, and Cleveland Fed President Mester will give speeches. The G20 Finance Ministers and Central Bank Governors Meeting will be held.

Blue Chips and Hot Stocks

Vanke A: Currently facing temporary operational difficulties, it has formulated a package of measures to stabilize operations and reduce debt. Currently, the tax authorities have not determined any subjective intention of tax evasion by Yantai Vanke. There is no situation of refusing to pay taxes.

Citi expects Xiaomi's SU7 delivery volume to reach 5,000 to 6,000 units in April, with an annual delivery volume of about 55,000 to 70,000 units. If production capacity cannot keep up with demand, Xiaomi may encounter growth issues similar to last year's XPeng G6. The bank estimates that Xiaomi will lose an average of 6,800 yuan for each SU7 sold in 2024, with a total loss of 4.1 billion yuan for the entire car-making business.

Xiaomi Auto: Starting at 9 a.m. on April 19, a 24-hour limited-time upgrade will be available, and users who have already locked orders for non-Founder's Edition can make upgrades on the Xiaomi Auto APP.

Tencent Cloud released a post-incident analysis on April 8: lasting nearly 87 minutes, with a total of 1957 customers reporting faults.

Chips and Artificial Intelligence

Amazon announced the appointment of globally renowned AI scholar Andrew Ng to its board of directors, effective April 9. This is another move by Amazon to strengthen its AI capabilities following the completion of a $4 billion investment in AI company Anthropic at the end of March.

NIO's NOMI GPT large model is online, and it will be simultaneously pushed to models equipped with the Banyan·Rong NIO intelligent system. This upgrade brings many new features based on the capabilities of large models.

Cryptocurrency

In the Asian market morning session, Bitcoin briefly rose to $64,900.

As the escalation of tensions in the Middle East triggers risk aversion, the cryptocurrency market has seen widespread declines. Zaheer Ebtikar, founder of the cryptocurrency fund Split Capital, stated that the continued cryptocurrency sell-off "may depend on further escalation." The tense situation on Friday hit the stock market, boosting safe-haven assets such as bonds and the US dollar.

According to Coinglass data, around $1.5 billion worth of bullish cryptocurrency bets through derivatives were liquidated on Friday and Saturday, marking one of the highest two-day liquidation levels in at least six months. Ebtikar stated that leverage "has become unbearable over the past three days, leading to substantial deterioration in digital asset prices."

Cryptocurrency exchange Kraken experienced network issues over the weekend, stating that the cause of the network connection problem has been identified and efforts are being made to fix it.

Vietnamese officials: Vietnam has not banned cryptocurrencies, and it is necessary to establish a legal framework.

Bitcoin is set to undergo a "halving" around April 20th, which refers to halving Bitcoin mining rewards to limit supply.

IPO Opportunities

Chabaida: Globally issued 147.7 million shares listed in Hong Kong at an issue price of HKD 17.50, trading is expected to start on the Hong Kong Stock Exchange on April 23.

Macro: A Global Perspective

The probability of the Federal Reserve maintaining interest rates in May is 94.1%.

On the 13th local time, Iran directly attacked Israel for the first time in history.

US Secretary of Defense Austin emphasized that the US is not seeking conflict with Iran but will continue to take all necessary actions to protect the safety of Israeli and American personnel.

G7 is considering imposing more sanctions on Iran. Israeli officials: actions against Rafah will be taken.

US House Speaker Johnson attempted to pass an aid bill for Israel this week but did not disclose whether the bill will still include aid for Ukraine and other allies.

Goldman Sachs: After the escalation of the Iran-Israel conflict, it is expected that oil prices will not further significantly rise. Hedge funds have been selling US energy stocks for the third consecutive week, with 5 out of the past 6 weeks being net sales. Any increase in oil prices due to rising geopolitical risks may be restrained as oil producers decide to hedge price risks and sell off their positions in advance.

China Securities Regulatory Commission: Accelerate the implementation of the "1+N" policy system for the capital market.

Hong Kong Financial Secretary Paul Chan Mo-po: A "Digital Policy Office" will be established in mid-year to comprehensively formulate and implement policies to promote the development of the digital economy and smart city. The government will also review legislation and guidelines to enhance data governance, establish clearer guidelines for data collection and processing, while retaining space to address technological developments.

Cui Dongshu, Secretary-General of the China Passenger Car Association: The scale of price reductions for passenger cars in the first quarter of 2024 has exceeded 60% of the total for 2023, with very few price reductions for traditional fuel vehicles compared to new energy vehicles such as pure electric and plug-in hybrids