Recent negotiations between the U.S. and Iran regarding the reopening of the Strait of Hormuz are nearing consensus, with an agreement expected to be reached. The potential "speedy reopening of the Strait of Hormuz" could provide global stock markets with a temporary respite from adjustment pressures.
The earlier "summer chill" led to a simultaneous decline in overseas stocks and bonds. A combination of rising U.S. Treasury yields, deleveraging in crowded tech trades, oil price shocks, and geopolitical risks has already driven a significant round of volatility and adjustment in global equity markets, partially releasing risks in some overvalued, highly crowded assets.
Looking ahead, risk appetite is expected to see a short-term recovery. The "summer chill" represents a liquidity-driven shock affecting global stock markets, which is also likely to subside temporarily. However, risks have not been completely eliminated. In July, vigilance is still required against potential shocks from crude oil inventory replenishment, the high stickiness of inflation in major economies like the U.S. and Europe, and funding pressures.
Last week, as expectations for a U.S.-Iran peace agreement continued to build, oil prices came under pressure and retreated. Cooling inflation expectations helped U.S. stock indices close higher, while U.S. Treasury yields fell. The 10-year Treasury yield dropped 3.6 basis points to 4.485%, and the 30-year yield fell 2.3 basis points to 4.97%. The U.S. dollar weakened, declining 0.3% last week to 99.8.
In the A-share market from June 8 to 11, margin financing and securities lending saw a net outflow of 331 billion yuan. Regarding ETFs, broad-based ETFs saw a net inflow of 94 billion yuan after 11 consecutive weeks of outflows, while sector-specific ETFs saw a net inflow of 16 billion yuan after 12 consecutive weeks of outflows. Sectors like communications, robotics, 5G, banking, and artificial intelligence saw net inflows, whereas chips, securities, gold, non-ferrous metals, and power grid equipment experienced net outflows.
In Hong Kong, the overall short-selling turnover ratio declined to 17%, while the ratio for the Hang Seng Tech Index remained at 18%. Southbound capital recorded a net inflow of 43 billion Hong Kong dollars last week, with its turnover share dropping to 19.1%. Within this, Alibaba Group Holding Ltd (NYSE: BABA) switched to a large net outflow of 58 billion HKD, while the net inflow into Tencent Holdings Ltd (OTC: TCEHY) expanded to 49 billion HKD. Yangtze Optical Fibre and Cable Joint Stock Ltd (OTC: YOFCY) turned to a net inflow of 24 billion HKD, and Hua Hong Semiconductor Ltd (OTC: HUHSF) continued its net inflow of 5 billion HKD. At the sector level from June 4 to 10, funds continued to flow significantly into the information technology sector, with continued inflows into communication services, finance, and industrial sectors, while the pace of inflows into the energy sector slowed. Innovative drugs and e-commerce saw net outflows, and the net outflow from the metals sector widened further.
From a funding source perspective for Hong Kong stocks last week (June 4-10), foreign capital continued its net outflow of 80 billion HKD, while Hong Kong local intermediaries continued a net inflow of 12 billion HKD. Mainland Chinese intermediaries switched to a net inflow of 106 billion HKD. Southbound Stock Connect ETFs continued a net outflow of 102 billion yuan. The Hong Kong market saw a weekly share unlock value of 141 billion HKD, with an expected unlock of 121 billion HKD this week.
Summary of Key Research Reports
Overseas TMT
Computex 2026 Field Takeaways: AI Hardware Tight Across the Entire Chain, Optical Demand Visibility Steps Up Again – Aillen Wang
Xunce Technology Announces Token Billing Strategic Cooperation Project; AI Demand Catalyzes Token Business Model Implementation – Rachel Wang
WWDC26: Siri AI Officially Launched, Apple's AI Strategy Shifts from Feature Completion to Ecosystem Restructuring – Barney Yao
Inclusion in Stock Connect Catalyst Realized: Hong Kong-Listed Domestic GPU + AI Harness Scarce Stocks, Southbound Pricing Channel Opens – Barney Yao
NVIDIA and SK hynix Deepen Partnership: From Advanced Memory Supply to AI Infrastructure Co-Design – Barney Yao
Overseas Advanced Manufacturing
Physical AI Industry Accelerates: NVIDIA's New Platform Lowers Development Barrier, Favor Certainty Leaders – Harrison Yin
Overseas Consumer
XR/AI Glasses Industry Summit Exchange: Smart Glasses Enter Accelerated Productization Phase, Display, AI, and Fitting Systems Advance in Sync – Yuanyuan Kou
Daily Chart Series
• Changes in Fund Flows After South Korea's Sharp Drop: Foreign Selling Pressure Eases, Institutions Become Main Sellers
• Overseas-Listed South Korean Leveraged ETF Products Continued Adding Positions Against the Trend from June 5-8
• SPX Falls Below Gamma Flip Level, Negative Gamma Amplifies Short-Term Volatility
• The Gray Rhino Still Runs – Commentary on May CPI Data
• Behind the Trillion-Dollar Giant IPO: A Peak Signal? Changes in Financing, Buybacks, and Valuation Logic
Risk Factors to Consider
Risks include the Federal Reserve's interest rate cuts falling short of expectations and the pace of China's economic recovery and debt resolution risks.
U.S. consumer confidence saw its first rise in four months in early June, coupled with a slowdown in the month-on-month growth rate of core CPI in May. This cooling inflation expectation contributed to the decline in Treasury yields. The 10-year yield fell 3.6 basis points to 4.485%, and the 30-year yield dropped 2.3 basis points to 4.97%, falling back below the 5.0% level. Japan's 10-year government bond yield fell 5.3 basis points to 2.62%.
With the sustained increase in expectations for a U.S.-Iran peace agreement, oil prices remained under pressure. Brent crude fell 6.76% for the week to $86.8 per barrel. In precious metals, spot gold fell 2.5% for the week to $4,218.97 per ounce, while silver rose 0.18% to $68.01 per ounce.
The U.S. dollar weakened, falling 0.3% last week to 99.8. The USD/CNH rate fell 0.4% to 6.76.
From June 8 to 11, A-share margin financing and securities lending continued a net outflow of 331 billion yuan. In ETFs, broad-based ETFs saw a net inflow of 94 billion yuan after 11 consecutive weeks of outflows. Sector ETFs saw a net inflow of 16 billion yuan after 12 consecutive weeks: communications, robotics, 5G, banking, and AI saw net inflows of 72, 26, 18, 15, and 13 billion yuan respectively. Chips, securities, gold, non-ferrous metals, and power grid equipment saw net outflows of 10, 13, 13, 19, and 23 billion yuan respectively.
The overall short-selling turnover ratio in Hong Kong fell to 17%. The ratio for the Hang Seng Tech Index remained at 18%, while for internet leaders it fell to 17%. For individual stocks, the short-selling turnover ratios for JD.com Inc (NASDAQ: JD), NetEase Inc (NASDAQ: NTES), Alibaba, and Baidu Inc (NASDAQ: BIDU) fell from the previous week to 22.5%, 22.5%, 13.6%, and 16.1% respectively. The ratios for Tencent and Meituan (OTC: MPNGF) rose from the previous week to 16.2% and 22.3% respectively.
Southbound capital recorded a net inflow of 43 billion HKD last week, with its turnover share dropping to 19.1%. Alibaba switched to a large net outflow of 58 billion HKD, while the net inflow into Tencent expanded to 49 billion HKD. Yangtze Optical Fibre and Cable turned to a net inflow of 24 billion HKD, and Hua Hong Semiconductor continued its net inflow of 5 billion HKD. At the sector level from June 4 to 10, funds continued significant inflows into the information technology sector, with continued inflows into communication services, finance, and industrial sectors, while the pace of inflows into the energy sector slowed. Innovative drugs and e-commerce saw net outflows, and the net outflow from the metals sector widened further.
Analyzing Hong Kong stock funding sources for the week of June 4-10, foreign capital continued a net outflow of 80 billion HKD. Hong Kong local intermediaries continued a net inflow of 12 billion HKD. Mainland Chinese intermediaries switched to a net inflow of 106 billion HKD.
Southbound Stock Connect ETFs continued a net outflow of 102 billion yuan, with outflows from technology, finance, innovative drugs, high-dividend, consumer, and broad-based ETFs amounting to 61, 13, 13, 6, 5, and 4 billion yuan respectively. Since the beginning of 2026, the market has seen a cumulative net outflow of 61 billion yuan. Technology and innovative drug sectors have seen cumulative net inflows of 224 and 134 billion yuan, while high-dividend, finance, and consumer sectors have seen cumulative net outflows of 150, 138, and 19 billion yuan respectively.
Last week, the Hong Kong market saw a share unlock value of 141 billion HKD, with an expected unlock of 121 billion HKD this week. Since the start of 2026, the cumulative unlock amount in the Hong Kong market is 3,141 billion HKD.
Overseas TMT
Computex 2026 Field Takeaways: AI Hardware Tight Across the Entire Chain, Optical Demand Visibility Steps Up Again – Aillen Wang
On June 2-4, Haitong International's TMT team attended Computex. Across AI hardware, supply and demand are tight with lengthening order visibility and supported pricing. Tightness is chain-wide: high-end CCL is a seller's market, PCB leaders are pivoting to international majors, and HBM supply is tight into 2028–2030.
Direct optical signals were evident on-site: a scramble for gen-2 cloth, module makers re-architecting high-speed CCL, 36-layer substrates, and CPO/silicon-photonics testing germinating. This synchronized tightening confirms a durable AI capex cycle, supporting approximately 3x North American fiber/module demand next year, with CPO development cadence remaining the key swing factor.
Xunce Technology Announces Token Billing Strategic Cooperation Project; AI Demand Catalyzes Token Business Model Implementation – Rachel Wang
On June 8, 2026, Xunce Technology, together with PATEO and SimPro, signed a tripartite strategic cooperation agreement to jointly research Token-based physical AI and world models. The essence of the cooperation is Xunce providing full-chain data infrastructure and Tokenization services for vertical autonomous driving models, with dynamic settlement and standardized billing per Token.
This is the first project disclosed since Xunce implemented Token-based charging, making the monetization path clearer. By entering the trillion-yuan autonomous driving scene, it is expected to contribute billions in revenue in 2026. Policy tailwinds are also providing a catalyst: the National Data Administration released a high-quality dataset plan, proposing to explore token transactions, driving a valuation re-rating towards a "Token factory."
WWDC26: Siri AI Officially Launched, Apple's AI Strategy Shifts from Feature Completion to Ecosystem Restructuring – Barney Yao
At WWDC26, Apple officially launched Siri AI. The underlying architecture of Apple Intelligence has been upgraded from a closed on-device model to an Agent-oriented, device-cloud collaborative platform.
Siri AI is evolving from a Chatbot to a system-level Agent, possessing personal context understanding, screen awareness, and cross-app execution capabilities, positioning itself as a high-frequency personal task assistant.
The model layer has shifted from closed self-research to an open routing system, compatible with Apple's self-developed on-device models, private cloud, and third-party models like Gemini. Apple has reached a multi-year cooperation agreement with Google.
App Intents is the most noteworthy technical lever this time, serving as the ecosystem tool invocation layer, which is expected to transform a vast number of apps into Skills that Agents can call.
On-device AI has not been weakened; device-cloud collaboration is driving upgrades in NPU computing power and high-end SoCs, with a structural impact on the hardware supply chain.
Inclusion in Stock Connect Catalyst Realized: Hong Kong-Listed Domestic GPU + AI Harness Scarce Stocks, Southbound Pricing Channel Opens – Barney Yao
On June 8, Haizhi Technology, Biren Technology, and Tianshu Zhixin were officially included in the Southbound Stock Connect, allowing mainland investors to directly participate in pricing, which is expected to narrow the valuation gap with A-shares.
Performance on the first day of inclusion was mixed: Tianshu Zhixin surged 12.68%, Biren rose 2.51%, while Haizhi fell back 2.61%. Southbound capital showed a greater preference for domestic computing power hardware.
Haizhi is a scarce industrial-grade AI Harness target in Hong Kong, with its core being a Graph+Agent dual-layer architecture. Agent volume growth is driving an approaching inflection point in profitability quality.
Tianshu Zhixin is China's first mass producer of 7nm GPGPUs for both training and inference, with near-zero CUDA migration costs, and its revenue is at an accelerating inflection point.
Biren's core focus is its next-generation flagship chip, the BR200, expected to be commercialized in 2027. It has completed the transition to a fully domestic supply chain, improving revenue visibility.
NVIDIA and SK hynix Deepen Partnership: From Advanced Memory Supply to AI Infrastructure Co-Design – Barney Yao
On June 7, NVIDIA and SK hynix announced a multi-year partnership for the joint development of next-generation advanced memory; financial terms and volumes were not disclosed.
Its significance lies in deeper platform-level compute-memory co-design, not incremental procurement. Closer roadmap alignment helps NVIDIA reduce supply-chain volatility during platform transitions.
The partnership's breadth spans Vera Rubin, Vera CPUs, AI PCs, and Jetson Thor robotics, reflecting NVIDIA's expansion into a full-stack computing platform provider.
It extends NVIDIA's platform into chip manufacturing via digital-twin tools, upgrading the supplier-customer model and reinforcing the case for differentiation among leading HBM suppliers.
Overseas Advanced Manufacturing
Physical AI Industry Accelerates: NVIDIA's New Platform Lowers Development Barrier, Favor Certainty Leaders – Harrison Yin
On June 1 at Computex Taipei, NVIDIA released the Isaac GR00T humanoid robot reference design, adhering to a "no whole machines, only platforms" strategy.
The platform includes the GR00T N2 world model brain, Isaac Sim simulation, and the Jetson Thor computing base. Suppliers of standardized platform core components are the first-round beneficiaries.
The U.S. House of Representatives introduced the GUARD Act, proposing a ban on federal procurement of Chinese robots, with Unitree named. However, this is merely a proposal with no legal effect, and short-term cooperation remains unaffected.
UBTech's bionic robot received over 2,110 orders within 6 days of launch, exceeding its annual commercial guidance by 40%, suggesting that underestimated B2B demand may be exploding.
Sector certainty has increased. It is recommended to allocate along two main lines: "certainty + elasticity," prioritizing leading manufacturers like UBTech and paying attention to companies benefiting from technology spillover.
Overseas Consumer
XR/AI Glasses Industry Summit Exchange: Smart Glasses Enter Accelerated Productization Phase, Display, AI, and Fitting Systems Advance in Sync – Yuanyuan Kou
On June 5, Haitong International participated in the XR/AI Glasses Industry Summit. A core takeaway is that the smart glasses industry is expected to enter a volume expansion phase starting in 2026.
AR glasses lean towards portable immersive display terminals, while AI glasses lean towards all-weather随身 assistants. Lightweight, daily-wearable glasses are closer to the long-term direction for mass consumption.
Optical lenses are evolving from traditional accessories to core capabilities. Conant has participated in over 40 AR joint R&D projects, compressing delivery cycles from 45 days to 5 days.
User feedback suggests that displays are shifting from a bonus feature to a core experiential component, significantly improving interaction efficiency in high-frequency scenarios like AI notifications, guided tours, and walking/cycling navigation.
Daily Chart Series Details
Changes in Fund Flows After South Korea's Sharp Drop
On Monday, South Korean stocks fell sharply, with the KOSPI index down 8.3% and KOSDAQ down 9.1%. Foreign spot selling pressure contracted significantly, dropping from a net sale of $1.9 billion last Friday to roughly flat. Within this, the KOSPI saw an initial net sale of about $800 million in the morning but closed with only a $200 million net sale, while there was a $200 million net purchase of KOSDAQ. Local institutions increased their selling, becoming the largest net sellers on Monday, with spot net sales expanding from $800 million to $1.3 billion. Retail investors were still buying but at a significantly reduced pace, with spot net purchases dropping from $2.7 billion to $1.1 billion, while gross selling rose to $15 billion, indicating a mix of bargain-hunting and stop-loss selling.
At the ETF level last week, retail investors were the main net buyers, with a weekly net purchase of $4.1 billion, of which 2x leveraged long ETFs accounted for 61%. Institutions were net sellers of $4.4 billion, hedging against retail buying. On June 5 alone, retail investors net bought $1.4 billion, with 2x leveraged long ETFs accounting for 74%, showing overall high-risk appetite and aggressive buying behavior.
Overseas-Listed South Korean Leveraged ETF Products Continued Adding Positions Against the Trend
The total AUM of overseas-listed ETFs targeting South Korea is $50.7 billion, with EWY (iShares MSCI South Korea ETF) accounting for nearly half. Over the past 12 months, there was a net inflow of $12 billion, accelerating to an $8.6 billion net inflow year-to-date. Since May, fund flows have clearly diverged: broad-based ETFs like EWY saw profit-taking, while leveraged products added positions against the trend, especially Hong Kong-listed 2x long Samsung and SK Hynix products. Last Friday, major products collectively saw significant net subscriptions, with leveraged products showing particularly strong buying. On Monday, leveraged products continued adding positions.
Options and short-selling indicate rising hedging demand: EWY short interest has increased by about 50% over six months to 19.8 million shares. The put/call ratio for open interest in EWY rose to 2.18, at the 85th historical percentile. KORU's open interest PCR reached 2.21, at the 98th historical percentile.
SPX Falls Below Gamma Flip Level, Negative Gamma Amplifies Short-Term Volatility
The SPX options Gamma structure has turned from positive to negative: net GEX has continued to decline from +$74.6 billion on June 2. On June 8, as the spot price fell below the Gamma flip level, it officially turned negative, further dropping to -$24.0 billion on June 9. This means market makers have shifted from being volatility suppressors to volatility amplifiers.
Meanwhile, the Gamma flip level has moved up from around 7,100 in mid-May to 7,421, mainly driven by continued accumulation of near-month Put positions in the 7,300 to 7,400 range. The current SPX spot price is 7,387, still about 0.5% below the flip level, and it has failed three times to reclaim the flip level since June 5.
The Gray Rhino Still Runs – Commentary on May CPI Data
The May CPI data overall aligns with the reality that U.S. inflation remains relatively high, but the month-on-month core CPI was below expectations. After the data release, U.S. stocks did not rebound but fell broadly, and Treasury yields continued to rise. This aligns with our previous view: if May inflation exceeded April's 3.8%, vigilance was still required.
The gray rhino of the "summer chill," or its sufficient condition, is primarily the unexpected rise in long-term U.S. Treasury yields. Therefore, analyzing May's inflation data is about assessing its impact on long-term Treasury yields. The "gray rhino" we have emphasized since early May regarding June and July risks is not inflation itself, but rather the unexpected rise in long-term U.S. Treasury yields.
Thus, the key to confirming the "summer chill" downtrend and potential crash-like volatility risk is not whether May U.S. inflation data exceeds consensus expectations—that is merely sentiment, a short-term risk appetite fluctuation. The real focus is the impact of the U.S. CPI trend on long-term Treasury yields. This is the gray rhino, a medium-term shock at the discount rate and liquidity level.
Conclusion: Continued deterioration in inflation for May and June is highly probable. The rise in long-term Treasury yields is far from over. After the gray rhino starts running, it takes sufficient time and space to release its highly destructive impact. Be vigilant for the market further pricing in rate hike expectations in July. However, we believe the Fed is likely to hold steady. Even referencing October 1987 or 1998, if capital markets experience crash-like volatility, there could still be unexpected rate cuts in the second half of the year.
Behind the Trillion-Dollar Giant IPO: A Peak Signal? Changes in Financing, Buybacks, and Valuation Logic
With SpaceX set to list on June 12, and expectations for IPOs of "super unicorns" like OpenAI and Anthropic with valuations exceeding a trillion dollars in the coming year, the U.S. stock market is welcoming an unprecedented window for giant financing. Are giant IPOs a signal of a major market top? Not necessarily, but they mark the market entering a climax phase of the bull market, where volatility will increase. The wave of trillion-dollar IPOs suggests that financing conditions may deteriorate, the marginal willingness and ability for buybacks will weaken, and medium-term tech stock valuation preferences may shift from AI infrastructure narratives to AI application narratives.
Final Risk Advisory
Key risks include the Federal Reserve's interest rate cuts falling short of expectations, as well as risks related to the pace of China's economic recovery and debt resolution.
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