Chinese Concept Stocks Plunge

U.S. stock markets closed higher on Tuesday with the Dow Jones Industrial Average up by 126.13 points at 42,080.37, a 0.30% increase; the Nasdaq Composite rose by 259.02 points to 18,182.92, a 1.45% increase; the S&P 500 Index gained 55.19 points to 5,751.13, a 0.97% increase.

Large-cap technology stocks advanced across the board, with Nvidia surging over 4%, Netflix rising more than 2%, and Apple, Amazon, Meta Platforms, and Microsoft all increasing by more than 1%, while Google edged higher.

Bank stocks were mixed, with Citigroup up over 1%, and Goldman Sachs and Wells Fargo slightly higher, while JPMorgan Chase, Morgan Stanley, and Bank of America dipped slightly.

Popular Chinese concept stocks broadly declined, with the NASDAQ Golden Dragon China Index falling 6.85%, marking the largest single-day drop since October 2022. Jinko Energy plummeted over 20%, Daqo New Energy fell approximately 20%, EHang Intelligent, and Dada Group dropped over 16%, Tiger Brokers slid about 16%, and Kingsoft Cloud, Gaotu Tech, and Lufax Holding fell more than 14%, while Bilibili and Weibo fell over 12%, Canadian Solar and Trip.com Group fell about 10%, and Ke Holdings, Li Auto, and NIO fell around 8%, while JD.com, Baidu, and XPeng Motors fell over 7%; on the upside, Amer Sports rose over 6%.

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In terms of news, according to Reuters, Boston Fed President Collins stated on the 8th that as inflation trends weaken, the Federal Reserve is highly likely to further cut interest rates. Collins said that although core inflation pressures remain high, she is increasingly confident that inflation is returning to the Federal Reserve's 2% target.

International Oil Prices Plunge

International oil prices plummeted after several days of consecutive increases. As of the close on the 8th, the November delivery of light crude oil futures at the New York Mercantile Exchange fell by $3.57 to $73.57 per barrel, a 4.63% decrease; the December delivery of Brent crude oil futures in London fell by $3.75 to $77.18 per barrel, a 4.63% decrease.

Reuters reported that oil prices fell by more than 4% due to the potential ceasefire between Hezbollah and Israel; however, concerns about possible attacks on Iran's oil infrastructure provided some support for oil prices.

On the same day, the U.S. Energy Information Administration (EIA) released its Short-Term Energy Outlook report, stating that global and U.S. oil demand growth in 2025 will be lower than previously estimated.The Energy Information Administration (EIA) stated that global oil demand in 2025 is expected to increase by 1.2 million barrels per day (bpd) to 104.3 million bpd, which is about 300,000 bpd lower than the previous estimate. The EIA mentioned that this year's oil demand will be around 103.1 million bpd, a decrease of 20,000 bpd from the previous estimate.

Japan's Corporate Bankruptcies Exceed 5,000 for the First Time in 9 Years in the First Half of the Fiscal Year

According to a report by Kyodo News, Tokyo Shoko Research Co. announced on the 8th that the number of corporate bankruptcies (with liabilities of over 10 million yen, approximately 470,000 RMB) in Japan during the first half of the fiscal year 2024 (April to September) was 5,095, a year-on-year increase of 17.8%. The shortage of labor has become a heavy burden, and the number has exceeded 5,000 for the first time since the same period of the fiscal year 2014 (5,049). The depreciation of the yen, which led to a surge in the price of imported materials, also had an impact. This marks the third consecutive year that the number of bankruptcies has increased in the first half of the fiscal year, with bankruptcies expanding across all industries and regions.

The report indicated that bankruptcies due to labor shortages increased by about 80%, reaching 148 (compared to 82 in the same period of the previous year), which is the highest in the first half of any fiscal year since the comparable data from the fiscal year 2013. Specifically, recruitment difficulties accounted for 57 cases, high labor costs for 56 cases, and employee turnover for 35 cases. There were 220 bankruptcies due to lack of successors.

Bankruptcies due to increased procurement costs and other price surges amounted to 353 (compared to 337 in the same period of the previous year). The company analyzed that "small and medium-sized enterprises (SMEs) have not made progress in passing on the cost increases to products or services, and profits are under heavy pressure." This contrasts sharply with large enterprises that have made progress in securing talent through wage increases and price transfers.

Looking at the industry breakdown, bankruptcies increased in all industries except for the financial and insurance sector. The highest increase was in the "service industry," including catering, which rose by 15.3% to 1,693, a record high since the fiscal year 1995. This was followed by the construction industry, which struggled with a shortage of craftsmen and soaring raw material prices, with an increase of 13.1% to 964.

The number of bankruptcies announced for September also increased by 12.0% year-on-year to 807. For the first time in 9 years, the number exceeded 800 in September.

Goldman Sachs Says Hurricane Milton Will Reduce Disney's Profits

On October 8th local time, the U.S. National Hurricane Center stated that Hurricane "Milton" has been upgraded to a Category 5 hurricane and is moving towards the coastline of Florida.

According to CNBC, Goldman Sachs analysts stated on October 8th that they expect the park closures and operational disruptions caused by Milton to adversely affect Disney's profits.According to estimates by Goldman Sachs analysts, Hurricane Milton is expected to make landfall in central Florida as early as Wednesday, potentially reducing Disney's earnings before interest and taxes (EBIT) for the first quarter of the fiscal year 2025 by approximately $150 million to $200 million.

Goldman Sachs also stated that the impact of this hurricane on Disney is expected to surpass that of Hurricane Irma in 2017, which led to a reduction in Disney's revenue by about $100 million after forcing the closure of Disney parks for two days and disrupting some cruise operations.

Goldman Sachs has revised its earnings per share (EPS) forecast for Disney's fiscal year 2025 down from $5.22 per share to $5.14 per share.

Furthermore, Goldman Sachs estimates that due to the storm's impact, Disney's domestic attendance rate for the first quarter is expected to decline by 6%, rather than the previously estimated 2% decrease.

FAA Issues Safety Alert on Boeing 737 Rudder Issues

On October 8th local time, the Federal Aviation Administration (FAA) announced that it has issued a safety alert to airlines, warning that the rudder movement on some Boeing 737 models may be restricted or stuck.

Previously, on September 30th, the National Transportation Safety Board stated that over 40 foreign operators of Boeing 737 aircraft may be flying planes with potential safety risks associated with the rudder control system components.

The FAA indicated that the alert issued on the 8th provides information on the existing automatic rudder system checks, which will identify restricted or stuck rudder movement before landing.

Reuters reported that global rating agency Standard & Poor's stated that due to the ongoing strike by approximately 33,000 of Boeing's workers, leading to the suspension of production of its best-selling jet aircraft, Boeing's credit watch rating has been set to negative. Standard & Poor's placing Boeing on the "credit watch" list reflects the increased likelihood of a downgrade in Boeing's rating if the strike continues. Last month, all three major rating agencies, including Standard & Poor's, warned that a prolonged strike at Boeing's U.S. West Coast factories could lead to a downgrade, posing a headache for the aircraft manufacturer burdened with substantial debt.

Buffett Sells More of Bank of America, Realizing a Total of Ten Billion DollarsWarren Buffett's Berkshire Hathaway has been significantly selling off its shares in U.S. banks for several months. The latest divestment includes the period from October 3-7, during which Berkshire Hathaway reduced its stake by 9.570980 million shares in Bank of America, cashing out a total of $383 million. As a result, Buffett's ownership in Bank of America has now dropped to 10.1%, but he remains the bank's largest shareholder.

This implies that once Buffett sells just a little more, reducing his stake in Bank of America below 10%, he will no longer be required to disclose his transactions within two business days (usually within a few days) as he would when his ownership was above 10%. Typically, he would only need to disclose such information in the quarterly reports.

Previously, Berkshire Hathaway began large-scale divestment of Bank of America shares since mid-July of this year, and the reasons for this have not been officially disclosed. Since then, the bank's stock price has been under pressure.

The latest data from Bloomberg shows that Berkshire Hathaway has cashed out as much as $10 billion from the sale of Bank of America shares. However, even after a significant amount of selling, Berkshire Hathaway's holdings in Bank of America remain substantial, with a total value of $31.35 billion.