Macroeconomic Highlights
Two Hawkish Fed Officials Issue Fresh Warning: Inflation Is Far From Over, Support Modest Rate Hike
Lorie Logan, President of the Federal Reserve Bank of Dallas, clearly stated in prepared remarks for an event in Houston on Thursday that she supports a modest increase in interest rates. "At present, I believe a modest rate hike would better balance the outlook and risks associated with the Federal Reserve’s dual mandate of price stability and maximum employment," she said. She added, "If inflation does not fully retreat to 2% on its own, then at least some degree of policy restraint will be necessary to help achieve that goal."
Also on Thursday, Jeffrey Schmid, President of the Federal Reserve Bank of Kansas City, signaled a hawkish stance during an economic forum in Nebraska. He stated, 'My primary concern remains inflation—it is still too high and has remained above target for an extended period. Therefore, as we chart the appropriate policy path, my focus remains firmly on inflation.'
In remarks delivered just before publication, Federal Reserve Vice Chair Jefferson indicated that artificial intelligence could exert upward pressure on inflation if the demand effects stemming from AI infrastructure investment and consumption materialize before the productivity gains from AI are realized.
White House Rocked by 'Insider Betting' Scandal! Teleprompter Operator Suspected of Earning Over $100,000 by Betting on Trump Speech Information
U.S. federal regulators are investigating a White House teleprompter operator over whether he used non-public information related to Trump’s speeches to profit by more than $100,000 through prediction market trades. According to sources familiar with the matter, the operator is Gabriel Perez, who is currently engaged in settlement negotiations regarding civil charges brought by the Commodity Futures Trading Commission (CFTC).
On Thursday, White House Press Secretary Karoline Leavitt stated that Perez had been placed on unpaid administrative leave. Relaying Trump’s stance on the matter, she said Trump considered it “very unfortunate and, frankly, a disgrace.” Vance dismissed rumors that Trump allies had profited from insider information, calling them complete nonsense. “I’ve never received such information. If I had, I would say: Kushner and Witkoff are trusted members of the president’s team and very dear friends of mine.”
Trump to Deliver Nationwide Address Focused on Election, Will Address Iran Issue
U.S. President Donald Trump has announced plans to raise alleged “issues” concerning U.S. elections during a prime-time nationwide address scheduled for 9 p.m. Eastern Time on Thursday (9 a.m. Beijing time Friday). This is far from his first such move. Ever since his loss to his predecessor roughly six years ago, Trump has repeatedly claimed to be a victim of “rigged” and “stolen” elections, leveling similar accusations following recent Republican electoral defeats. Trump’s decision to spotlight his election claims comes as he and his allies undertake multifaceted efforts to reshape U.S. elections ahead of the November midterm elections. Polls indicate that as Trump’s popularity wanes, Democrats are poised to regain control of the U.S. House of Representatives. The White House confirmed that the speech will also address the Iran issue.
Iranian Drones Attack U.S. Military Base in Bahrain
In the early hours of July 17 local time, the Iranian Army announced the 11th phase of its "Lightning Operation," deploying "Arash" loitering munition drones to strike the U.S. military’s Sheikh Isa Air Base in Bahrain, targeting areas where U.S. helicopters and P-8 surveillance aircraft are stationed. Iran stated the attack was in retaliation for recent U.S. strikes on Iranian urban infrastructure that caused civilian casualties. Meanwhile, Kuwaiti military authorities reported their air defense systems were actively countering missile and drone threats. Tensions in the Middle East continue to escalate, heightening risks to oil supplies through the Strait of Hormuz. Oil prices have faced short-term upward pressure, while safe-haven assets such as gold and the U.S. dollar have strengthened, as spillover effects from regional conflict increasingly transmit to global financial markets.
Kimi Launches K3, the World's Largest Open-Source Model
On the 16th, ahead of the 2026 World Artificial Intelligence Conference and the High-Level Meeting on Global Governance of Artificial Intelligence, the next-generation model Kimi K3 was unveiled with a parameter count of 2.8 trillion, making it the largest open-source model globally by parameter scale to date. Beijing-based Moonshot AI, the developer of the model, stated that Kimi K3 natively supports visual understanding and features a context window of one million tokens, optimized for complex task scenarios such as software engineering, knowledge work, deep research, and multimodal comprehension, further enhancing the large model’s capacity to handle sophisticated tasks.
U.S. Stock Market Update
Chip stocks continued to decline, dragging the Nasdaq down nearly 1.5%, with memory and optical communications sectors leading the losses.
On Thursday in U.S. Eastern Time, despite generally strong U.S. economic data and a solid start to the second-quarter earnings season, cooling enthusiasm around AI and persistent weakness in chip stocks weighed on both the Nasdaq Composite and the S&P 500, pushing them lower.
As of the market close, the Dow Jones Industrial Average fell 105.67 points, or 0.20%, to 52,552.97; the Nasdaq Composite dropped 387.28 points, or 1.47%, to 25,881.95; and the S&P 500 declined 38.64 points, or 0.51%, to 7,533.76.
$Star Tech Stocks (LIST2518.US)$ Most stocks declined, with SpaceX falling 3.08%, Meta down 2.46%, NVIDIA dropping 2.40%, Amazon sliding 1.99%, Tesla declining 0.86%, while Apple rose 1.76% and Microsoft gained 1.38%.
$Storage Concept (LIST23925.US)$ Memory-related stocks plunged again, with SK Hynix down 13.48%, SanDisk falling 12.6%, Seagate Technology dropping 10%, and Western Digital declining 9.22%.
$Optical Communications (LIST23979.US)$ Among optical communications概念股, Corning fell more than 9%, and Lumentum dropped 6.1%.
$Popular Chinese ADRs (LIST2517.US)$ Chinese stocks listed in the U.S. mostly advanced, with the Nasdaq Golden Dragon China Index closing up 1.79%. Bilibili rose 3.94%, XPeng Motors gained 1.89%, Weibo increased 1.42%, JD.com climbed 1.37%, Baidu advanced 1.20%, PDD Holdings rose 1.10%, Li Auto gained 1.02%, NetEase added 0.44%, Alibaba closed down 0.17%, and Nio fell 1.19%.
Stock-specific news
SpaceX canceled a major test flight of its Starship rocket, causing its shares to plunge over 4% in after-hours trading.
$SpaceX (SPCX.US)$ Following the cancellation of its IPO, SpaceX called off the first Starship rocket test flight. Elon Musk posted on social media: “Some engines failed to ignite, triggering the automatic launch abort sequence. Propellant offloading is now underway.” Musk indicated that the next launch attempt is expected within a few days.
Rumors of a delay in the launch of Google's Gemini model sparked concerns, sending its shares down more than 4%.
Media reports stated that Google-C (GOOG.US) it has fallen several months behind schedule in launching its most powerful flagship AI model, Gemini 3.5 Pro, due to underwhelming technical performance, raising market concerns about its AI competitiveness. Affected by this news, Google Class A shares plummeted 4.4%. According to informed sources, the delay of Gemini 3.5 Pro primarily stems from Google’s desire to invest more time in enhancing the model’s capabilities, particularly in code programming. The report noted that this slower-than-expected progress has frustrated Google engineers, AI researchers, and management, with many worried that as rivals Anthropic and OpenAI roll out models surpassing Gemini in performance, Google could face eroding market positioning.
Netflix expects its third-quarter revenue growth rate to hit a three-year low, sending its shares down over 8% in after-hours trading.
On Thursday after U.S. market hours, video streaming giant $Netflix (NFLX.US)$ released its latest quarterly earnings report. The company’s second-quarter revenue and profit largely met Wall Street analysts’ expectations, but it forecast a slowdown in revenue and profit growth for the third quarter, further intensifying investor concerns that the company’s growth may have peaked. As a result, Netflix shares fell more than 8% in after-hours trading. The company projected third-quarter revenue growth of 11.7% year-over-year, which would be the lowest annual increase since late 2023. The earnings report showed that Netflix generated $12.56 billion in revenue in the second quarter, up over 13% year-over-year, and net income rose nearly 9% year-over-year to $3.4 billion. Overall results were broadly in line with analyst expectations.
Hanmi Semiconductor plans to build a new factory in South Korea.
Citing an interview with $Hanmi Semiconductor (042700.KR)$ Chairman Kwak Dong Shin, South Korean media reported that, given anticipated shortages in AI semiconductor equipment starting next year, Hanmi Semiconductor is considering constructing its eighth production facility, which would become the company’s largest site upon completion. Kwak Dong Shin expects semiconductor equipment demand to outstrip supply beginning next year. The planned eighth factory will be located adjacent to the seventh factory currently under construction in Incheon. Hanmi Semiconductor stated that as global chipmakers ramp up investments, demand for its thermocompression bonding and hybrid bonding equipment will grow rapidly. The company plans to establish Hanmi USA, a U.S. subsidiary, in San Jose, California, by the end of 2026 to strengthen its technical support services.
Apple’s OLED-equipped iPad mini is expected to launch as early as this fall, with entry-level and Air models slated for updates next year.
According to people familiar with the matter cited by Bloomberg, $Apple (AAPL.US)$ the new iPad mini will feature an OLED display for the first time. Apple is expected to unveil the device as early as this fall and plans to begin official sales around October. This will mark the first major update to the iPad mini’s design and display technology since its redesign in 2021. The product upgrade is expected to further bolster the ongoing recovery of Apple’s iPad business. iPad sales have exceeded Wall Street expectations for two consecutive fiscal quarters, and are projected to grow by 6% year-over-year in the current fiscal year, reaching nearly $30 billion—ranking it among Apple’s most commercially valuable product lines.
Microsoft is preparing an AI-powered vulnerability detection tool similar to Mythos.
According to The Information, $Microsoft (MSFT.US)$ it is developing a Mythos-like AI vulnerability detection tool that will leverage multiple AI models to automatically identify software vulnerabilities and implement corresponding security fixes.
Truth Social launches real-time information service to give Wall Street traders a market edge.
operates the social media platform $Trump Media & Technology (DJT.US)$ The company behind Truth Social announced on Thursday local time that it will launch a data service for paying subscribers, offering “authorized fastest access” to real-time posts from U.S. President Trump and other top accounts for clients tracking market developments. In announcing the service, dubbed “Truth API,” DJT did not explicitly mention the president in its press release but hinted that Wall Street institutions might show interest. A company spokesperson added that the service would deliver content from the 10 most influential accounts on Truth Social significantly faster than the notifications received by regular users on the platform. “Previously…information firms closely monitoring influential Truth posts relied primarily on manual monitoring. Truth API will bridge this information gap.”
Top 20 by Trading Volume
Hong Kong Market Outlook
Southbound capital increased its holdings of Hong Kong-listed stocks by over HK$5 billion, with Alibaba and Zhipu AI receiving net purchases of more than HK$2.8 billion and HK$1.7 billion, respectively.
On Thursday, July 16, southbound capital recorded a net purchase of HK$5.04 billion in Hong Kong-listed stocks.
$Alibaba-W (09988.HK)$、$Zhipu AI (02513.HK)$、$Tencent (00700.HK)$Net purchases amounted to HK$2.833 billion, HK$1.79 billion, and HK$1.179 billion, respectively;
$Xiaomi Group-W(01810.HK)$、$KBTL (01888.HK)$、$Pop Mart (09992.HK)$Net sales amounted to HK$1.372 billion, HK$1.173 billion, and HK$391 million, respectively.
Baidu seeks conversion to dual primary listing; Jefferies expects inclusion in Stock Connect in September
Baidu Group-SW (09888.HK) It announced that its board has approved a proposal to voluntarily convert its Hong Kong listing on the Main Board of the Hong Kong Stock Exchange to a dual primary listing, expected to take effect within the year. Upon completion of the conversion, Baidu will be dually primarily listed on both the Hong Kong Stock Exchange Main Board and Nasdaq, with shares on both exchanges remaining interchangeable. Baidu stated that this move will enhance stock liquidity, broaden its investor base, and provide greater flexibility across both the Hong Kong and U.S. capital markets. Jefferies estimates that Baidu will be included in Stock Connect in September. Currently listed in Hong Kong as a 'secondary listing,' Baidu’s primary regulatory obligations remain tied to its U.S. home market. Following conversion to a 'dual primary listing,' Hong Kong will become an independent primary listing venue, placing both markets on equal footing and subjecting each to oversight by its respective regulator. Upon completion of the conversion, Baidu will meet the eligibility criteria for inclusion in Stock Connect, enabling mainland investors to directly trade Baidu shares via the Shanghai and Shenzhen-Hong Kong Stock Connect programs.
Xiaomi drops a bombshell: 100,000 hours of real-world data, first systematic validation of robot Scaling Law
$Xiaomi Group-W(01810.HK)$ Launched the Xiaomi-Robotics-1 embodied foundation model, pretrained on 100,000 hours of real-world operational trajectories and further trained on 11,000 hours of cross-embodiment data—the first systematic validation of the robot Scaling Law in China. Experiments show that scaling up both data volume and model size consistently improves performance. Embodied intelligence is transitioning from the era of reliance on single-task data and manual parameter tuning (1.0) into an industrialized 2.0 era driven jointly by data scale and model scale.
Today's Focus
Key events: World Artificial Intelligence Conference; South Korean markets closed; U.S. monthly options expiration
On the economic data front, at 17:00, Eurozone June CPI and core CPI final readings will be released; at 20:30, U.S. June housing starts (annualized), building permits, and import price index (month-over-month) will be published; at 21:15, U.S. June industrial production (month-over-month) will be released; at 22:00, the preliminary reading of the University of Michigan’s July consumer sentiment index will be issued.
On the economic calendar, the 2026 World Artificial Intelligence Conference will open in Shanghai; a new pricing window for domestic refined oil products will open; and former U.S. President Trump will deliver a nationwide prime-time address at 9:00 a.m. Hong Kong time on Friday, July 16 (evening of July 16 U.S. time).
In terms of market activity, July 17 marks the standard monthly options expiration date for U.S. equities. Given the concentration of macroeconomic events and earnings reports this week, short-dated options positions in bank stocks, semiconductors, and large-cap technology shares may rise significantly. Investors should pay attention to the impact of market makers’ hedging activities and position roll-overs on intraday and end-of-day volatility this Friday.
Regarding market holidays, the Seoul Stock Exchange in South Korea will be closed for one day due to Constitution Day.
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Editor/Rocky