Pre-market highlights

1. Bessent's "market rescue" lasted only one day, with US stocks and bonds falling while cryptocurrencies surged. Market sentiment: Negative. As the effect of the US Treasury Department's efforts to stabilize the bond market quickly faded, the three major US stock indices declined, and selling pressure on long-term US Treasuries resumed. A rise in bond yields indicates a fall in bond prices. Amid a weak broader market, the memory and optical communications sectors, which had fallen for the previous two sessions, rebounded together. SK Hynix rose 4.43% on Thursday, while Micron Technology gained 3.97%.

2. Alibaba opened lower but climbed after earnings; conference call indicated Capex investment expected to break even within three years. Market sentiment: Positive. On August 20, during the earnings conference call, Alibaba Group CEO Eddie Wu stated that the annualized revenue run rate (ARR) of Alibaba's AI-related products exceeded RMB 49.5 billion (US$7.3 billion) this quarter. The return on investment for AI computing Capex is highly certain, with total investment currently expected to break even within three years. Overnight, Alibaba's US-listed shares opened lower but closed up over 1%.

3. NDRC held a private enterprise symposium focused on stabilizing economic operations and promoting effective investment. Market sentiment: Positive. On August 20, Zheng Shanjie, Director of the National Development and Reform Commission, chaired a symposium to hear opinions and suggestions from private enterprises on stabilizing economic operations and promoting effective investment. Representatives from five companies attended, including Tgood Electric, Chutian Intelligent, Yucun Technology, Thunderbird Innovation, and Ordos Resources, covering sectors such as electrical equipment, pharmaceutical equipment, consumer services, smart terminals, textiles, and metallurgical chemicals.

4. Trump signed a memorandum to promote US space launches and explore commercial robotic missions to Mars. Market sentiment: Positive. On August 20, local time, the White House stated that President Trump had signed a memorandum proposing that by 2030, US space transportation ranges and related facilities should be capable of supporting more than 1,000 launches and re-entry missions annually. Additionally, NASA was directed to develop a commercial lunar logistics architecture, explore commercial robotic landings on Mars, and commercial crewed round-trip missions to Mars.

5. Anthropic aims to surpass SpaceX and launch the largest IPO in history. Market sentiment: Positive. According to sources familiar with the matter, Anthropic is expected to publicly file its IPO documents as early as the end of this month and is currently assessing the fundraising scale. SpaceX previously set the record for the largest IPO in history with an initial offering size of US$75 billion, with a final scale of US$86.2 billion including the over-allotment option. If Anthropic successfully breaks this threshold, 2026 will easily become the largest fundraising year in the history of the US IPO market.

Investment calendar

State Council Information Office press conference; Ministry of Finance to introduce relevant policies.

Investment tips

Firmly believe that "choosing the right stocks can generate more profit than correctly utilizing market fluctuations and frequently switching between hot stocks and cash." — John Maynard Keynes, contrarian investor.

Institutional perspectives

1. Soochow Securities: The "merry-go-round market" characteristics are prominent, and the market has not yet cultivated a core theme with sustainability.

2. China International Capital Corporation: Market volatility has increased amid external shocks, but the A-share recovery that began in late July is still expected to continue.

3. Orient Securities: As market risk appetite gradually recovers, attention should be paid to sectors with strong earnings certainty.

Positive and negative outlook

1. After the "Shanghai Eight Measures," Shanghai released its 15th Five-Year Plan for urban renewal and housing development. Policy focus. Great Wall Securities: The current valuation and fund positioning of the real estate sector are both at historical lows. Driven by a series of policies, the industry is expected to gradually stabilize and recover, enhancing the sector's investment appeal and potentially offering significant upward elasticity in stock prices.

2. Apple's autumn launch event is approaching, and Foxconn is urgently recruiting workers to ramp up iPhone 18 Pro production. Market discussion. China Merchants Securities: Apple continues to expand its market share relative to Android. We remain optimistic that the scarcity of high-quality Apple supply chain resources will become more prominent, leading to a revaluation of the Apple supply chain. We recommend selecting high-quality alpha targets within the supply chain.

3. MIIT approved Spacety to conduct commercial trials for satellite IoT services. Institutional commentary. CITIC Securities: In the medium to long term, the core contradiction in commercial aerospace will shift from launch capacity supply to satellite network utilization and commercial applications, with investment themes gradually moving downstream.

Announcement highlights

Positive announcements

1. GigaDevice: Plans to repurchase company shares for RMB 1 billion to RMB 2 billion.

2. Xiamen Tungsten: First half of 2026 net profit of RMB 2.201 billion, up 127.04% year-on-year.

3. CITIC Securities: First half of 2026 net profit of RMB 23.343 billion, up 69.6% year-on-year.

Negative announcements

1. Muyuan Foods: First half net loss of RMB 6.078 billion, turning to a loss year-on-year.

2. China Telecom: First half of 2026 net profit of RMB 19.588 billion, down 14.9% year-on-year.

3. Guosheng Technology: 9.12% of the controlling shareholder's total shares in the company have been judicially frozen and flagged.

Overseas markets

As the effect of the US Treasury Department's bond market stabilization quickly faded, the three major indices fell. The "Magnificent Seven" tech stocks all declined, while memory and optical communications sectors strengthened. SK Hynix rose over 4%, and Lumentum gained over 6%. Moderna, the mRNA cancer vaccine stock that surged 176% the previous day, fell 23.55%. The Nasdaq Golden Dragon China Index closed down 1.15%.