General Market News

China's commerce ministry accused the United States of 'AI hegemonism' and threatened countermeasures after U.S. officials said Chinese AI companies, particularly Moonshot AI, could face investigations and sanctions for allegedly stealing U.S. technology through 'distillation' of advanced AI models. The dispute centers on whether Moonshot copied Anthropic's Claude model to develop its Kimi K3 system, with the U.S. threatening Entity List placement and financial sanctions while Moonshot denies the allegations.

• U.S. officials allege Moonshot AI built a sophisticated platform to conduct large-scale distillation of U.S. models, specifically copying Anthropic's Claude to develop Kimi K3, and switched between access methods to avoid detection
• Anthropic identified over 3.4 million interactions with its Claude models linked to Moonshot using hundreds of fraudulent accounts targeting capabilities including reasoning, coding, and data analysis
• Potential Entity List placement could severely restrict Moonshot's access to U.S. semiconductors, software, and cloud services, similar to sanctions imposed on Huawei beginning in 2019

Goldman Sachs Alternatives has agreed to acquire control of Italian medical equipment maker Numantec from White Bridge Investment in a deal valued at around €700 million. The transaction targets a healthcare business with steady revenues amid economic uncertainty, with Numantec employing about 600 people across seven manufacturing facilities in Europe and the United States.

• Numantec supplies healthcare products and drug-delivery devices, operating seven manufacturing facilities across Europe and the U.S. with approximately 600 employees
• The deal values Numantec at approximately €700 million, though official financial terms were not disclosed by the companies
• Under Goldman Sachs ownership, Numantec is expected to continue European expansion and strengthen its U.S. presence following its 2023 acquisition of rival Health Line International

Malaysian cocoa grinder Guan Chong expects cocoa processing to increase in 2026 as demand recovers from last year's slowdown, with plants running at about 90% capacity versus 85% in 2025. However, CEO Brandon Tay warns that El Niño weather patterns could reduce cocoa bean output and drive prices higher, potentially lowering grinding volumes in 2027.

• Guan Chong's capacity utilization will reach 90% in 2026, up from 85% in 2025, but still below the normal rate of over 95%
• Grinding volume for 2027 is projected to decline due to El Niño weather pattern expected to reduce cocoa bean output and increase prices
• Global cocoa surplus is expected to narrow in the 2026/27 season as El Niño affects production while robust demand drives up grinding levels, according to Transgraph Consulting

Dow futures surged 550 points on Monday as a temporary pause in US-Iran attacks caused oil prices to drop approximately 6%, easing inflation concerns and boosting rate-sensitive stocks. The rally remains fragile ahead of key events including the Federal Reserve's policy decision Wednesday and major Big Tech earnings from Microsoft, Meta, Amazon, and Apple this week.

• Travel stocks led gains with Delta Air Lines up 2.6% and American Airlines up 3% on lower fuel costs, while energy producers fell sharply—Occidental Petroleum dropped 3.8% and Exxon Mobil declined 2.6%
• Geopolitical risks persist despite the attack pause, with shipping through the Strait of Hormuz subdued and Houthi attacks continuing near the Red Sea, threatening to reverse oil's decline
• Big Tech earnings will test investor confidence in AI spending, with the Nasdaq 8% below its record and semiconductor stocks in bear market territory after concerns about capital expenditure demands

Chinese chipmaker CXMT debuted on the Shanghai stock exchange with a nearly 500% surge, becoming China's most valuable stock with a valuation exceeding half a trillion dollars. The IPO, Asia's biggest this year, comes amid heightened focus on semiconductor self-sufficiency due to U.S. chip restrictions. Markets are also watching for the Federal Reserve meeting Wednesday, major tech earnings including Apple and Amazon, and oil prices retreating from $100/barrel after a pause in Iran strikes.

• CXMT's Shanghai IPO valued the company at over $500 billion, making it China's most valuable stock and surpassing Industrial and Commercial Bank of China, though only 6.73% of shares were offered publicly
• Oil markets showed relief as Brent crude retreated to around $89/barrel from near $100 after the U.S. paused strikes on Iran following 13 days of attacks, with futures still pricing a one-in-four chance of a Fed rate hike Wednesday
• Major tech earnings reports are due from Apple, Amazon, Microsoft, Meta, and Qualcomm, with markets scrutinizing AI investments after Alphabet's stock fell despite beating earnings; Nvidia reportedly in talks for a $250 billion backstop for OpenAI's data center project

Fast fashion retailer Shein filed for a Hong Kong IPO seeking a $40-50 billion valuation, significantly below its 2024 private valuation of $64 billion. The prospectus revealed slowing growth with revenue up only 8% to $41.8 billion in 2025 while net income plunged 39% to $2.06 billion, raising investor concerns about whether the company can justify its target valuation amid mounting regulatory and trade headwinds.

• Operating margin compressed to just 2.9%, leading analysts to suggest investors will reprice Shein away from a high-growth tech platform toward a traditional retail and logistics player
• Removal of U.S. de minimis tariff exemption and new EU import fees are pressuring sales and costs, with the company forced to consider price increases to offset higher expenses
• U.S. sales have contracted since 2025 and European growth is slowing, with these two markets representing over 50% of global revenue, forcing Shein to rely on 'Rest of World' markets for future growth

Brookings Institution senior fellow Wendy Edelberg argues that Fed Chairman Kevin Warsh may be quietly building a case for rate cuts through five task forces examining inflation measurement and AI pricing effects, despite hawkish macro data. Markets currently price in roughly 80 basis points of cuts through 2026, but Edelberg believes even Goldman Sachs' dovish projection of 50 basis points underestimates likely easing.

• Warsh has established five task forces on inflation measurement, AI pricing, policy rules, and the Fed's balance sheet, set to report in coming months with no predetermined conclusions
• Inflation has exceeded the Fed's target for 63 consecutive months, with core PCE at the 90th percentile, oil at $90/barrel, and gas at $4.00, yet consumer sentiment sits at recessionary levels (44.8)
• Goldman Sachs projects 50 basis points of cuts to 3-3.25% in 2026, while JPMorgan notes markets price in 80 basis points of easing, though Edelberg suggests both may be too conservative

U.S. President Trump's January 2027 deadline to end reliance on Chinese critical minerals faces significant obstacles as domestic production capacity remains far below demand. Current U.S. rare earth magnet production is only 300 metric tons versus 48,000 metric tons of demand, with capacity expected to reach just 5,000 metric tons by year-end. The administration may need to continue granting waivers to defense contractors despite Trump's opposition, as U.S. mining and processing infrastructure requires years more development.

• The U.S. has not produced tungsten since 2015 or tantalum since 1959, while China controls over 80% of global minerals-refining capacity and continues to dominate supply chains critical for defense and manufacturing
• Trump launched a $12 billion stockpiling effort in February that officials admit will initially require buying minerals 'anywhere in the world,' including from China, contradicting the push for domestic-only sourcing
• Major U.S. projects face significant delays: MP Materials' Pentagon magnet facility won't open until 2028, Ucore Rare Metals pushed production to 2027 at earliest, and USA Rare Earth's processing plant targets 2029-2030 completion

Financial analyst Ken Fisher warns new Federal Reserve Chair Kevin Warsh against raising interest rates, arguing that current inflation concerns are overblown and rate hikes could harm the economy. Fisher contends that oil price volatility, geopolitical tensions, and central banker anxiety are driving misguided rate-hike speculation despite underlying inflation remaining near the Fed's target.

• US CPI inflation slowed to 3.5% year-over-year in June from a peak earlier in the year, with core inflation (excluding energy) at 2.7% - close to January's 2.6% and near the Fed's goal
• US M4 money supply grew 6.9% in May, near the 5.6% historical average and far below the 30.4% peak in June 2020 that Fisher blames for 2022's inflation surge
• Global money markets have priced in a quarter-point Fed rate hike by September, with the ECB and Bank of England expected to follow, despite Fisher's warning that aggressive hiking could flatten yield curves and choke economic growth

Treasury yields declined on Monday as Middle East tensions eased following a third consecutive night without hostilities between the U.S. and Iran. The 10-year Treasury yield fell over 3 basis points to 4.6406%, while oil prices dropped sharply with WTI crude falling 5.34% to $84.55 per barrel. Investors are now focused on the Federal Reserve's upcoming rate decision on Wednesday, where rates are expected to remain unchanged at 3.75%.

• The 10-year Treasury yield decreased more than 3 basis points to 4.6406%, while the 30-year yield fell to 5.1260% and the 2-year yield dropped to 4.3030%
• Oil prices reversed sharply with U.S. WTI crude down 5.34% to $84.55 and Brent crude falling 5.77% to $91.20 after approaching $100 per barrel last week
• Markets anticipate the Federal Reserve will hold rates steady at 3.75% on Wednesday, while awaiting key economic data including June's core PCE, quarterly GDP, and durable goods orders

Online fast-fashion retailer Shein filed its Hong Kong IPO prospectus, revealing a $99 million loss in Q1 2026 due to slowing U.S. sales after the removal of a small-package import duty exemption and accounting charges. The company's revenue grew from $32.1 billion in 2023 to $41.9 billion in 2025, though growth has decelerated significantly. Shein is seeking a valuation of $40-50 billion, down from $98.2 billion in 2022.

• Europe overtook the U.S. as Shein's largest market in 2024, accounting for 35.4% of revenue ($14.8 billion) in 2025, while U.S. contribution fell from 29.4% in 2023 to 24.1% in 2025
• First quarter 2026 revenue grew just 1.1% year-over-year to $9 billion, with U.S. revenue declining 14% to $2 billion, reflecting the impact of eliminated duty exemptions
• Operating profit margin compressed to 2.9% in Q1 2026 from 3.9% a year earlier as marketing and fulfillment costs rose while sales stagnated, with operating profit falling 26% to $258 million

Shein's Hong Kong IPO prospectus reveals rare details about its reclusive founder and CEO Sky Xu, 42, who has led the fast-fashion giant since its 2012 founding but maintains an extremely private profile with no interviews or public presence. The filing comes as Shein pursues a listing that could value it at up to $50 billion after previous IPO attempts in New York and London failed. Xu's aloofness has contributed to concerns among Western politicians and campaigners about the company's lack of transparency.

• Sky Xu founded Shein in China in 2012 and has served as chairman, executive director, and CEO since inception, though he does not appear on the company's corporate website and avoids all public engagement
• The prospectus notably omits mention of Donald Tang, who has served as Shein's executive chairman and public face during recent listing attempts in Western markets
• Xu's low profile may be strategic to avoid regulatory backlash similar to Jack Ma's 2020 experience when Chinese regulators derailed Ant Group's $37 billion IPO, according to sources close to him

Chinese memory chipmaker CXMT surged over 500% on its Monday market debut, becoming mainland China's most valuable company after raising $9.8 billion in the country's biggest-ever tech IPO. The AI-driven global memory chip shortage has fueled unprecedented demand for DRAM producers, with CXMT now positioned as the world's fourth-largest maker with 8% market share.

• CXMT raised 66.6 billion yuan ($9.8 billion) in China's largest mainland tech IPO, with capital earmarked for expanding production capacity and chip development
• The company holds 8% of the global DRAM market and aims to challenge dominant players Samsung, SK hynix, and Micron, with Apple reportedly testing CXMT chips amid shortages
• AI data center demand has created severe memory chip shortages, though analysts note the IPO funding is unlikely to ease supply constraints immediately as capacity expansion typically takes a year or longer

President Trump on Friday imposed new tariffs of 10-12.5% on 60 trading partners including the EU, China, UK and Canada, replacing temporary duties that expired July 24. Unlike the April 2025 'Liberation Day' shock announcement, these tariffs arrive amid a more challenging economic environment marked by the six-month U.S.-Iran conflict, elevated oil prices, and persistent inflation. The tariffs, implemented via Section 301 of the Trade Act citing forced labor practices, may represent a permanent shift in U.S. trade policy rather than a negotiating tactic.

• The new tariffs use Section 301 authority rather than the previous legal framework struck down by the Supreme Court in February, potentially making them more durable and legally secure
• Countries with forced labor prohibitions face 10% tariffs while others face 12.5%, affecting 99.4% of American imports during an ongoing Middle East conflict that has driven oil prices higher
• Analysts warn the tariffs could create a structural drag on global growth in a 'low growth, high inflation' environment, with the Fed potentially considering rate hikes rather than the previously expected 2027 cuts

Shein's Hong Kong IPO filing avoids specific mention of Xinjiang cotton and Uyghur forced labor risks that blocked its earlier London and New York listing attempts. China's securities regulator previously refused to approve filings that referenced Uyghur forced labor as a risk, prompting the shift to Hong Kong. The move allows Shein to access global capital while navigating political sensitivities between Western and Chinese regulators.

• China's securities regulator blocked Shein's London IPO despite UK approval because the filing mentioned Uyghur forced labor compliance as a risk factor
• The Hong Kong filing uses only generic language about 'negative publicity' affecting brand reputation, omitting specific supply chain concerns related to Xinjiang
• Shein highlights its 7,500 contract manufacturing partners and LATR inventory system while maintaining it does not use forced labor in its China-based supply chain

Japan is considering foreign bank financing, including from JPMorgan and other U.S. banks, for approximately $33 billion in natural gas-fired power projects in Pennsylvania and Texas. This financing is part of Japan's $550 billion U.S. investment pledge, which was agreed as part of a deal to reduce U.S. tariffs on Japanese goods.

• Foreign banks will provide financing alongside Japan Bank for International Cooperation (JBIC), with potential guarantees from export credit agency NEXI
• The projects involve building natural gas-fired power facilities in Pennsylvania and Texas with a combined value of about $33 billion
• Japan's Finance Ministry stated that foreign bank financing would 'further facilitate the procurement of foreign-currency funding' needed for the $550 billion investment initiative

Chinese memory chipmaker CXMT debuted on the Shanghai stock exchange with shares soaring 470%, after raising $8.6 billion in its IPO. The Hefei-based company, China's largest DRAM maker with 7.67% global market share in Q4 2025, plans to use proceeds for mass production and R&D to compete against dominant players Samsung, SK Hynix, and Micron.

• CXMT swung to an operating profit of 35.43 billion yuan in Q1 from a loss of 2.83 billion yuan year-over-year, driven by growing global computing power demand
• The company has attracted attention after reports that Apple began testing CXMT's DRAM for devices sold in China
• Founded in 2016, CXMT holds a 7.67% share of the global DRAM market as of Q4 2025, competing in a sector dominated by three major players

Singapore's Monetary Authority tightened monetary policy for the second consecutive time in response to rising oil prices from the U.S.-Iran conflict, despite domestic inflation remaining subdued. The MAS increased the appreciation rate of the Singapore dollar's nominal effective exchange rate policy band, though the adjustment was smaller than April's tightening.

• Singapore's core inflation rose to 1.6% in June from 1.4% in May, near the bottom of the MAS's 1.5%-2.5% forecast range, with headline inflation at 1.9%
• The MAS uses exchange rate management against a trade-weighted currency basket rather than interest rate adjustments to control inflation, unlike most central banks
• Analysts expect inflation to rise in coming months as imported cost pressures from higher transportation fuel prices typically pass through to consumer prices with a lag

Oil prices dropped approximately 5% after reports that Iran signaled it would halt attacks if the U.S. maintains its pause in military strikes. Brent crude fell 4.88% to around $92 per barrel while WTI declined over 5% to $84.84 per barrel. The development eases concerns following nearly two weeks of escalating U.S.-Iran conflict.

• Iran indicated an 'attack for attack' stance, stating it will cease operations as long as the U.S. refrains from striking, according to Reuters citing a senior Iranian official
• The U.S. paused its bombing campaign after Trump advisers warned the military was running low on viable targets and raised concerns about depleting weapons stockpiles
• HSBC noted that higher oil prices had raised expectations for prolonged Fed tightening, though inflation expectations remained contained due to strong Fed messaging on price stability

Chinese memory chipmaker CXMT is set to debut on Shanghai's stock exchange following Asia's largest IPO this year, raising $8.6 billion. The offering values the company at $85.5 billion, making it one of China's largest listed semiconductor firms. The debut comes as Chinese tech markets face volatility following an AI-led selloff.

• CXMT raised $8.6 billion in the biggest mainland Chinese semiconductor IPO on record, surpassing SMIC's $7.5 billion 2020 offering
• The company expects first-half revenue to rise more than sevenfold to 110-120 billion yuan, with net profit of 66-75 billion yuan reversing a prior-year loss
• HSBC warns the large offering may temporarily drain liquidity from Chinese markets, while Morningstar notes CXMT could benefit from AI demand but faces a technology gap with global DRAM leaders like Samsung, SK Hynix, and Micron