Core Insights - The report highlights that the easing trade tensions and moderate inflation in the US have raised expectations for interest rate cuts, leading to new highs in US stocks and the dollar, while gold has retreated from its highs and oil prices have risen due to sanctions on Russian oil [2][10][15] - The MSCI global index rose by 1.77%, with markets in China, South Korea, and Japan leading the gains. The small-cap stocks and Nasdaq outperformed, with the Dow Jones, Nasdaq, S&P 500, and Russell 2000 indices increasing by 2.2%, 2.3%, 1.9%, and 2.5% respectively [2][10][14] - The US 10-year and 2-year Treasury yields changed by 0bp and 2bp to 4.02% and 3.48% respectively, while the dollar index rose by 0.39% to 98.9 [2][15] Economic Fundamentals - The US CPI for September showed a slight year-on-year increase, with a small month-on-month decline. Core CPI decreased both year-on-year and month-on-month, indicating a moderate overall performance. Energy prices were a significant support factor, while core goods saw a decline due to falling used car prices [3][5] - The consumer confidence index for October fell to 53.6 from 55.1, marking the third consecutive month of decline, reflecting the impact of price burdens and weak employment [2][3] Policy Environment - The ongoing US government shutdown may affect the distribution of SNAP benefits, impacting approximately 42 million low-income individuals. The Senate has not advanced a proposed funding bill, and if the shutdown continues, it could disrupt benefit payments scheduled for November 1 [2][6] - Trade negotiations between the US and China are set to take place from October 24 to 27 in Malaysia, amidst ongoing tensions. The US Trade Representative has initiated a "301 clause" investigation into China's compliance with the 2020 trade agreement [2][6] Market Performance - The report notes that the US stock market is facing increased volatility after reaching new highs, with upcoming earnings reports from major tech companies posing a potential "sell the news" risk. Additionally, the government shutdown and US-China trade negotiations could further disrupt the market [2][16] - In the Hong Kong market, positive policy signals from the Fourth Plenary Session have led to a notable rebound, with the Hang Seng Technology Index leading the gains at 5.2% [2][36] Sector Analysis - The report suggests focusing on three main investment themes: technology growth sectors (AI, internet, semiconductors), sectors expected to improve (new energy, building materials, traditional cycles), and new consumption areas benefiting from domestic policy support and changing consumer structures [2][36] - In the US market, the technology and energy sectors led the gains, with solid performance from solid-state batteries, online education, and lithium battery concepts [19][25]

Group 1 - Microsoft (MSFT.O) will provide hosting services for xAI's AI models, including Grok, Mistral, and Black Forest Labs, through its Azure data centers [1]