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Key News Asian equities caught the AI bubble flu as Japan and Taiwan underperformed. South Korea plunged after the KRX, the local exchange, released a warning concerning the price appreciation of several technology stocks. India was closed for the 556th birthday of Guru Nanak Jayanti, the founder of Sikhism and the first Sikh Guru. US financial CEOs added to the AI pessimism with comments at the Global Financial Leaders’ Investment Summit following yesterday’s comments from Goldman Sachs CEO David Solomon, Morgan Stanley’s CEO Ted Pick, and Capital Group’s CEO Mike Gitlin. Similar to other Asian markets, other than the previously mentioned, Hong Kong and Mainland China markets opened down but were exceedingly resilient as they grinded higher off morning lows. The Hang Seng had an intra-day low of -1.76% but closed at -0.07%, while Hang Seng Tech’s intra-day low was -2.87% but closed at -0.56%, Shanghai’s -0.95% but closed at +0.23%, Shenzhen’s -1.42% but closed at +0.45%, and the STAR Board’s -2.27% but closed at +0.23%. Last night, the White House announced that, effective November 10th, the tariff rate on China will be cut from 34% to 10% and the fentanyl-responsive tariff will be cut from 20% to 10%. This was followed by the Ministry of Finance's Office of the Customs Tariff Commission announcement that, effective November 10th, "The 24% additional tariff rate on US goods will remain suspended for one year, while the 10% additional tariff rate on US goods will be retained." The Chinese government also removed 15 of the 31 US companies from its export control list. I wonder if we’ll see the US side remove companies, including the terrible inclusion of Tencent, on the DoD’s list of Chinese companies affiliated with the Chinese military? MORE FOR YOU The implementation of the trade deal ad the trade truce made almost zero news in Western media. Mainland Chinese media reported that the Ministry of Commerce’s Deputy Minister Li Chenggang met with a US agricultural trade delegation! I’ve not seen this reported anywhere in Western media. Time to go long soybeans? The impressive rebound may have included foreign investor buying as Southbound Stock Connect was only 20% of Hong Kong turnover, with a healthy $1.334B of net buying. Internet stocks were not off nearly as much as their US ADRs yesterday with Tencent flat, Alibaba down -0.31%, and Meituan up +1.3%. Non-ferrous metal stocks rebounded, led by Zijin Mining, up +2.4%. Green technology stocks had a good day as investors might be connecting the dots that China’s vast green electrical output is a big boon for power hungry data centers. Nice looking chart! The Asian downdraft is hitting the pre-IPO prices of Pony.ai (down -12%) and Wenfar Intelligence (down -16%), though auto maker Seres IPO was flat. Xpeng was down -1.35% despite announcing a robotaxi partnership with Alibaba’s local services unit Amap. Interesting headline from JD Logistics that because labor accounts for 77.4% of expenses, the company plans on having 300mm robots, 1mm autonomous delivery vehicles, and 100,000 drones over the next year costing $290 billion. Mainland China was similar, though technology hardware rebounded, which makes sense on the lower tariffs. Clean and dirty energy stocks had a good day, as Sungrow gained +7.11% along side coal names. After the close, liquor maker Kweichow Moutai was down -0.62% after it announced it will buyback RMB 1.5B to RMB 3B at prices below 1,8867. Feels ambitious! October’s private survey Rating Dog Services PMI was 52.6 versus September’s 52.9 and expectations of 52.5, though only five economists provided estimates. Premier Li spoke to China’s commitment to opening up access to China’s market for foreign firms in his keynote speech at the China International Import Expo in Shanghai. Key line was “China will unswervingly promote high-level opening-up, steadily expand institutional opening-up, and advance the comprehensive pilot demonstration project for expanding the opening-up of the service sector.” 4,108 foreign companies attended from 155 countries are attending CIIE. President Xi met with Russian Premier Mishustin in Beijing. Live Webinar Join us Wednesday, November 12th at 10 am EST for: China Q3 Update: Tech Leads Bull Market, Trade Deal Updates, & New Goals Set In 15th Five-Year Plan Please click here to register New Content Read our latest article: Labubu & Gen Z Spending: What China’s Designer Toy Craze Tells Us About the New Consumption Wave Please click here to read Last Night’s Performance Last Night’s Exchange Rates, Prices, & Yields
