US September CPI rose 3.7% year-over-year, surpassing market expectations.
The US September Consumer Price Index (CPI) increased 3.7% year-over-year, compared to an estimated 3.6% and a previous reading of 3.4%. Bank of America forecasts three rate hikes through June 2027. Traders increased their bets on a Federal Reserve rate hike in October, while also expecting three more rate hikes by the end of 2027. According to Zhitong Finance APP, Chicago Fed President Austan Goolsbee said Wednesday that the September CPI report shows inflationary pressures are spreading broadly, a trend he finds concerning. He also warned that the AI data center construction and related investment boom could overheat the US economy, further complicating the Fed's efforts to control inflation. In an interview on Wednesday, Goolsbee commented on the September CPI data released that day, calling the report "frustrating."
Market Outlook
The Philadelphia Semiconductor Index fell 4.3%. In overnight US trading, the Dow Jones Industrial Average closed down 48.62 points at 51,621.48, a decline of 0.09%; the S&P 500 dropped 86.51 points to 7,718.94, a loss of 1.11%; and the Nasdaq Composite fell 511.51 points to 26,692.87, down 1.88%. Most of the "Magnificent Seven" tech giants declined, with Meta and Nvidia dropping over 3%, and Tesla falling more than 2%. The storage and semiconductor sectors traded lower, with the Philadelphia Semiconductor Index down 4.3%. Among individual stocks, SK Hynix fell over 6% and SanDisk dropped more than 5%. The AI cloud and computing power supply chain also suffered sharp declines, with CoreWeave plunging over 15%, Nebius falling more than 10%, Oracle dropping nearly 9%, and Vertiv losing over 6%. Precious metals, computer hardware, and cryptocurrency-related concepts led the declines, with Dell Technologies down over 11%, US Gold Corporation and Quantum falling more than 10%, Super Micro Computer dropping over 8%, and Coinbase and Pan American Silver declining nearly 5%. Pharmaceuticals, food and beverages, and oil and gas sectors led the gains, with Eli Lilly, Roche, and Amgen rising over 3%, Coca-Cola and Sysco gaining nearly 2%, and Chevron and Exxon Mobil up more than 1%. On the New York Mercantile Exchange, the front-month WTI crude oil futures contract rose $1.03 to settle at $95.17 per barrel, a gain of 1.09%. The front-month COMEX gold futures contract fell $50.00, or 1.20%, to $4,127.3 per ounce.
Key Developments to Watch
Fed Beige Book: Price increases accelerating, consumer pressure mounting, AI beginning to reshape labor demand. In the early hours of Thursday Beijing time, the Federal Reserve released its October economic conditions report, the Beige Book, showing that while the US economy continues to expand, it faces multiple pressures: price increases are accelerating in some regions, cost shocks from energy and other inputs are still propagating through supply chains, and under a divergence in consumption, more households including middle-income families are seeking rent and mortgage assistance. Meanwhile, AI and data center investment continues to support manufacturing and related construction activity, but some companies have already adjusted hiring plans due to AI-driven efficiency gains.
Hong Kong Exchanges and Clearing's Core Climate completed its first cross-border green electricity certificate pilot. On October 14, HKEX announced that the first batch of Chinese renewable energy green electricity certificate cross-border pilot transactions facilitated by its Core Climate platform had been completed, and it signed a cooperation agreement with the Guangzhou Power Exchange Center, allowing Hong Kong enterprises to purchase green certificates through the Guangzhou Power Exchange Center. The pilot brought together 15 companies from various industries, with green electricity certificate trading volume of approximately 100,000 certificates. Each green electricity certificate represents one megawatt-hour of renewable energy electricity.
Guotai Haitong (02611) received registration approval from the China Securities Regulatory Commission for a public issuance of perpetual subordinated bonds to professional investors. The company's registration application to publicly issue perpetual subordinated bonds with a total face value of no more than 45 billion yuan to professional investors was approved.
China Merchants Securities (06099): Its application to publicly issue short-term corporate bonds to professional investors received registration approval from the China Securities Regulatory Commission. The company's registration application to publicly issue short-term corporate bonds to professional investors was approved. The outstanding face value of the short-term corporate bonds in this public issuance shall not exceed 48 billion yuan.
Black Sesame Technologies (02533): A subsidiary signed an approximately 300 million yuan AI computing server sales contract with an A-share listed company. The sales contract represents the group's first order for AI computing servers. The board believes that the signing of this sales contract marks an important substantive progress in the group's expansion of its AI computing server business based on its AI computing platform.
CALB (03931) plans to acquire an 8.4958% equity stake in CALB Technology (Wuhan) for 692 million yuan. After the acquisition is completed, the company's equity interest in the target company will increase from 59.3155% to 67.8113%, and the target company will continue to be a non-wholly-owned subsidiary of the company. CALB Technology (Wuhan) Co., Ltd. is a limited liability company established under Chinese law, primarily engaged in the research and development, production, sales, and market application development of lithium batteries, battery management systems, and related integrated products.
GON Technology (02768) issued a positive profit alert, expecting net profit attributable to shareholders of approximately 950 million to 1.1 billion yuan for the first nine months, a year-over-year increase of 54.45% to 78.84%. During the reporting period, the company leveraged its integrated industrial chain advantages spanning "monomers-synthetic resins-organic polymer modification/composite materials-products," and based on its established industrial scale, continuously optimized its product mix, steadily improving product added value and overall competitiveness. Coordinated operations across business segments and improved operational efficiency drove the year-over-year increase in net profit attributable to shareholders of the listed company during the reporting period.
CSSC Offshore & Marine Engineering (00317) issued a positive profit alert, expecting net profit attributable to shareholders of 1.1 billion to 1.25 billion yuan for the first three quarters, a year-over-year increase of 67.91% to 90.80%. During the reporting period, the shipbuilding industry maintained high prosperity, the company's order book structure continued to optimize, and on-hand production tasks were ample and full. The company deepened lean production management, leveraged its advantages in serialized and batch construction, and continuously improved overall production and operational efficiency, driving a year-over-year increase in product gross margin. Associated enterprises saw significantly improved operating performance, and dividend levels from equity investees steadily increased, resulting in a substantial year-over-year increase in confirmed investment income.
Chow Sang Sang (00116) responded to a "jewelry robbery" at its Hong Kong store: the matter has been handed over to police. According to media reports, at around 3 PM on October 14, a Chow Sang Sang jewelry store at 70 Kwong Fuk Road in Tai Po, Hong Kong, was the scene of a robbery. In response to the incident, on the evening of October 14, Chow Sang Sang stated that the matter has been handed over to police and no further information is available.
New stock grey market: Shenzhen Transsion Holdings (02636) closed down 1.47% in grey market trading, losing HK$52 per board lot. Shenzhen Transsion Holdings (02636) will be listed in Hong Kong on October 15 (Thursday). As of the close, grey market trading showed a quote of HK$34.78, down 1.47% from the offer price of HK$35.30. With each board lot consisting of 100 shares, excluding fees, each board lot lost HK$52.
Stock Spotlight
China Longyuan Power (00916): Wind power generation improved in the third quarter. China Longyuan Power's third-quarter wind power generation was roughly flat year-over-year, an improvement from the 7% year-over-year decline in the first half; solar power generation rose 15% year-over-year. JPMorgan's latest research report noted that despite stabilizing generation trends, actual electricity prices remain under pressure due to the implementation of Document 136. JPMorgan continued, stating that China Longyuan Power's third-quarter profit is expected to decline approximately 25% year-over-year to about 830 million yuan, a slight improvement from the 28% year-over-year decline in the first half, supported by stabilizing wind power generation and continued strong solar power generation. JPMorgan stated that the worst moment for the company's earnings reset may have passed, and actual electricity price pressure is expected to ease after the first full year of electricity marketization reset in 2026, supporting a gradual recovery in earnings fundamentals in 2027, with operating fundamentals expected to gradually improve over time.
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