Wallstreetcn Morning Brief FM-Radio | October 7, 2025

Wallstreetcn Morning Brief FM-Radio | October 7, 2025

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Market Overview

AI boom continues, S&P 500 and NASDAQ both hit new highs, S&P rises for seven consecutive sessions, NASDAQ rebounds, while the Dow Jones ends its six-day winning streak; Tesla rises over 5%; the semiconductor index rises nearly 3%, AMD closes up nearly 24%, but NVIDIA falls over 1%; Criticial Metals closes up 45%; Figma and HubSpot, mentioned at the OpenAI developer conference, both surged over 10% intraday; AppLovin falls 14%.

The French prime minister resigns less than a year after taking office, French stock index once fell over 2%, 10-year French bond yields rose over 10 basis points intraday, hitting the largest spread with German bonds in nine months; the euro falls to a one-week low, US dollar index hits a one-week high.

Market initiates the "Takahashi Sanae trade", the yen drops 2% against the dollar intraday, hitting a two-month low. The offshore yuan drops over 100 pips intraday, breaking below 7.15 for the first time in a month. Bitcoin rises 3% intraday to reach a new high, breaking above $126,000 for the first time ever; Ethereum rises over 5% intraday.

Gold rises over 2% intraday to a record high, gold futures approach the psychologically important $4000 mark for the first time ever, silver hits a new 14-year high. OPEC+ decides to increase production in November by less than expected, crude oil rebounds for two days; US oil rises over 2% intraday.

In the Asian session, the Hang Seng Tech Index closed down 1%, tech and auto stocks broadly declined, Hua Hong Semiconductor hit a new high intraday, Zijin Mining rose 2%.

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Headlines

Both parties remain confident of victory, US government shutdown enters its second week.

Emerging market ETFs have seen eight consecutive weeks of inflows, with Chinese ETFs leading ahead of the "Golden Week": Invesco CQQQ hits record one-day inflow.

OpenAI surprises at developer conference: Apps SDK to turn ChatGPT into an operating system; Codex officially launched; App-building without coding; AgentKit can build agents in 8 minutes. Altman says ChatGPT has 800 million weekly active users.

AMD stock soars 38%, signs up to 6GW chip deal with OpenAI, and may take a 10% stake.

Tesla preps for October 7 press conference, media says it plans to announce low-cost Model Y on Tuesday.

Trump: starting November 1, to impose 25% tariffs on US imports of medium and heavy trucks.

White House officials deny that the Trump administration plans to take a stake in developing Greenland rare earth mine companies.

Japanese market launches "Takahashi Sannae trade" to respond to “Abenomics” return: yen plunges, Japanese stocks soar; Takahashi’s advisor: BOJ rate hike in October is too early, December is more appropriate.

2025 Nobel Prize in Medicine announced: honors "discoveries on peripheral immune tolerance", three scientists share the prize.

Market Closing

US & European stock markets: S&P 500 up 0.36% at 6740.28. Dow down 0.14%, at 46,694.97. NASDAQ up 0.71% at 22,941.667. European STOXX 600 closes down 0.04%, at 570.24.

A-shares market closed.

Bonds: At bond market close, US ten-year benchmark yield about 4.15%, up about 3 basis points intraday; two-year yield about 3.59%, up about 1 basis point intraday.

Commodities: WTI November crude futures closed up 1.33%, to $61.69/barrel. Brent December crude futures closed up 1.46%, to $65.47/barrel. COMEX December gold futures closed up 1.72%, at $3,976.3/oz. COMEX December silver futures closed up 1%, at $48.448/oz.

Headline Details

Global Highlights

Both parties confident of victory, US government shutdown enters its second week. The US government shutdown enters its second week, with no sign of easing the partisan deadlock in Washington. The Senate struggles to pass threshold votes as House Speaker Johnson insists the Senate first accept the House bill. The core sticking point is disagreement over health care subsidies: Democrats want to extend subsidies while Republicans refuse to negotiate before the government restarts. If military and civil servants miss paychecks by mid-October, consumer and public pressure will surge.

Emerging market ETFs see inflow for eight weeks, Chinese ETFs lead before "Golden Week": Invesco CQQQ sees record single-day inflow. Last week, Invesco China Tech ETF (CQQQ) recorded $292 million in inflows, its sixth consecutive week of net inflows and the longest stretch since the end of March, with $160 million flowing in on Monday alone—a record for the fund. Overall, US-listed emerging market ETFs posted their eighth straight week of inflows, netting $1.89 billion, with Mainland China and Hong Kong topping the list.

OpenAI developer conference brings surprises: Apps SDK will turn ChatGPT into an operating system; no-code App-building, build agents in 8 minutes.

  • Altman said ChatGPT weekly active users have reached 800 million. OpenAI releases Apps SDK for building Apps for ChatGPT, ChatKit for easily embedding ChatGPT chats into Apps, AgentKit for building AI agents; software engineering agent Codex officially released; plans to launch GTP-5 Pro and a small voice model into the API, together with Sora 2.
  • Altman mentioned software company Figure during a demo of third-party App integration with the Apps SDK: Figma turned higher by over 10% midday. OpenAI demoed Coursera, one of the first ChatGPT Apps, which jumped over 8% intraday. With AgentKit software, HubSpot rose over 10% intraday.
  • Recent news suggests that OpenAI will launch a new tool "Agent Builder" at DevDay, allowing users to visually build AI agent workflows through drag-and-drop canvas. On Monday, OpenAI introduced that AgentKit includes three tools: Agent Builder, Connector Registry for managing data and tool connections, and ChatKit.

AMD stock surges, OpenAI signs up to 6GW chip deal, may take a 10% stake. AMD has granted OpenAI up to 160 million stock warrants, with exercise conditions tied to computing power deployment progress and AMD stock price; leaked exercise price is the symbolic "$0.01." If all are exercised, OpenAI will own about 10% of AMD. Meanwhile, OpenAI is reportedly negotiating custom chip deals with Broadcom. These moves renew concerns of a tightly looped "AI closed-loop economy" among a few giants involving capital, equity, and computing power.

  • Unlisted but moving the market: OpenAI has become a "hidden giant" in US stocks. Although not yet public, OpenAI is impacting global stock markets with astonishing speed. Last week, the addition of "instant buy" for ChatGPT sent Shopify and Etsy stock soaring, while an internal blog triggered a software stock selloff. On Monday, OpenAI's announcement of a multibillion collaboration with AMD sent AMD shares up nearly 38%—its biggest rise in almost a decade. Analysts say OpenAI is already a "hidden giant" whose announcements and developer events can move entire sectors.

From surplus to shortage: AI is "devouring" memory chips. Once-plentiful memory chips are being gobbled up by voracious demand from AI data centers, triggering an unprecedented supply storm. Memory prices, after nearly two years of declines, have reversed into broad shortages; NAND flash and DRAM prices are rising rapidly. The "devouring" demand from AI data centers is the main reason behind the current shortage.

Tesla preps for October 7 launch event, may unveil affordable new model. Tesla posted a teaser video on social network X, hinting at an important launch on October 7, widely expected to feature an affordable EV. Media say production costs for the new car will be about 20% lower than Model Y, seen as a key move to boost sales and broaden the market. As the $7,500 federal subsidy expires and demand may soften, Tesla urgently needs lower-cost models to sustain growth.

Trump: from November 1, 25% tariffs on US imports of medium and heavy trucks. US President Trump announced that from November 1, 2025, all imported medium- and heavy-duty trucks will face a 25% tariff. The move, analysts say, will add pressure to a truck industry already hit by steel/aluminum tariffs and environmental regulations; Daimler, Volvo, International Trucks and others will be affected.

White House officials deny Trump administration plans to invest in Greenland rare earth miner. After the White House denied, Critical Metals, up 109% in early trading Monday, ended up only about 15%, while USA Rare Earth swung over 3% down. Previously, reports had said Trump administration officials discussed giving the US a direct stake in Greenland's biggest rare earth project via Critical Metals.

Takahashi Sannae’s advisor: Bank of Japan rate hike in October is too early, December is more suitable. Honda Yutaka, Takahashi’s key economic adviser and a principal architect of "Abenomics," says Takahashi wants the BOJ to be cautious on rate hikes. Honda warns sharp yen depreciation will fuel inflation and calls a break above 150 "a bit much." After these remarks, the yen briefly rebounded to around 149.90, but later resumed weakening against the dollar, depreciating 1.91% intraday.

  • Yen slumps, Japanese stocks soar! Market launches "Takahashi Sannae trade" as Abenomics returns. Japanese financial markets are quickly pricing in the possible return of "Abenomics," with the Nikkei 225 up over 4%, the yen crashing 1.5% to near 150 per dollar. Japanese bonds also under pressure, with 40-year yields surging up to 14 basis points to 3.52%. Takahashi, a disciple of late former PM Shinzo Abe, advocates aggressive fiscal expansion and may push the BOJ to maintain ultra-loose policy.
  • "Sannae Economics": a version 2.0 of "Abenomics"? According to Nomura, if Takahashi Sannae becomes LDP President, her "Sannae Economics" is seen as a continuation of "Abenomics," but with more emphasis on expansionary fiscal policy, aiming to stimulate the economy through investment and anti-inflation measures. "Sannae Economics" has now sent the yen to the brink of 150 per dollar, with markets focusing on the new government's stance towards the central bank, which will determine not only the yen's short-term fate, but herald a new chapter for Japan’s economy.
  • Morgan Stanley on "Takahashi Sannae trade": policy stance now moderately conservative, no MMT, rate hike expectations may cool. Morgan Stanley thinks fears of "extreme fiscal expansion" under Takahashi are exaggerated; she abandoned aggressive pledges such as cutting sales tax or opposing rate hikes, shifting to a "moderate conservative" line, proposing "responsible expansionary fiscal policy"—strategic investment to boost jobs/revenue while controlling debt ratios. Her monetary stance is in line with BOJ Governor Ueda; near-term rate hike expectations may cool, fiscal sustainability risks limited.

2025 Nobel Prize in Medicine announced: honoring "discoveries on peripheral immune tolerance", three scientists share the prize. The Nobel Prize in Physiology or Medicine is awarded to immunologists Mary E. Brunkow, Fred Ramsdell, and Shimon Sakaguchi, recognizing their foundational discoveries in peripheral immune tolerance. Their work revealed how the immune system avoids attacking self-tissue, unraveling the mystery of autoimmune diseases and inspiring new therapies now in clinical trials.

Domestic Companies

Bullish on Chinese AI chips: Goldman Sachs raises target prices for SMIC and Hua Hong Semiconductor yet again. Goldman raises SMIC and Hua Hong Semiconductor target prices for the fourth time in a row. DeepSeek V3.2-Exp's launch drove API costs over 50% lower, greatly lowering the AI threshold and boosting downstream chip demand. H-share target for SMIC is raised to HK$117, A-share to RMB 211; Hua Hong's target is up 34% to HK$117. Goldman calls a "systemic re-rating" for China's semiconductor industry.

Overseas Macro

US corporate bond "blow-up" shocks Wall Street! Is it an isolated incident or the tip of the iceberg? Auto parts giant First Brands' sudden bankruptcy, with $12 billion in complex debt, shocked Wall Street. While the mainstream says it's an "isolated error," bearish legend "Dr. Doom" issues a stern warning, likening this opaque bankruptcy to the Enron scandal—exposing systemic risks in the $2 trillion private credit market.

Weaponizing the Dollar: When Trump uses "fiscal firepower" to rescue Milei, markets fear the Fed's "nuclear weapon" even more. The Trump administration provided a swap to Argentina via the Treasury, essentially a politically motivated loan to boost support for President Milei. This breaks precedent for use of FX stabilization funds, raising concerns about dollar weaponization and Fed independence. Analysts warn that, if the Fed refuses to provide liquidity to "unfriendly" countries under political pressure, the global financial system may have to rely on the IMF as the last safety net.

Strong manufacturing, Vietnam Q3 GDP grows 8.23% YoY. Vietnam's Q3 GDP surged 8.23% YoY, the fastest in three years, as robust manufacturing and exports led the VN index up 2.6% at one point. Companies rushed production to counter US tariffs; electronics and textiles showed remarkable resilience.

Today's News Preview

China's September foreign exchange reserves.

US August trade balance.

Fed Governor Stephen Millan, Atlanta Fed President Bostic to give speeches.

ECB President Lagarde speech.

BoE Governor Bailey speaks.

Nobel Prize in Physics winners announced.

EIA monthly short-term energy outlook report released.

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