Good morning. Let us begin by looking at the international markets.
On the evening of the 10th, data released by the U.S. Bureau of Labor Statistics showed that the October Consumer Price Index (CPI) rose 0.4% month-on-month, compared with a market estimate of 0.3% and a previous reading of 0.6%; October core CPI (excluding food and energy) rose 0.3% month-on-month, versus an estimate of 0.2% and a prior figure of 0.3%. Because the U.S. government shutdown in October of last year disrupted data collection, the Bureau of Labor Statistics did not publish year-on-year changes this time.
Following the release of the above inflation data, traders still fully priced in a Fed rate hike in December while increasing their bets on a 50 basis point increase. According to CME's FedWatch, the probability of a 50 basis point Fed rate hike in December rose from 1.1% to 13.6%. The CPI beat also triggered a selloff in U.S. Treasuries. The 10-year Treasury yield rose about 8.4 basis points to 4.946%, the 2-year Treasury yield climbed roughly 13 basis points to 4.689%, and the 30-year Treasury yield advanced about 4.9 basis points to 5.305%.
Gold and silver prices plunged sharply in tandem. Before the data was released, Fed Governor Waller had already made clear that if October core CPI came in at 0.3% month-on-month or higher, the December meeting should consider a 50 basis point hike. After the data was published, Dallas Fed President Logan said she still believes at least two 25 basis point hikes are needed, but the pace may need to be faster than the Fed's moves this autumn. Some analysts argue that as international oil prices retreat rapidly from highs, the upward push on overall prices from the energy category has clearly weakened, and U.S. inflation is not expected to surge again in the near term. However, the overall price level remains significantly above the Fed's 2% long-term inflation target, leaving no room for monetary policy to shift toward easing. Alex Pelle, a senior economist at Mizuho, said the core debate at the Fed's December meeting will be whether to hike by 25 basis points or 50 basis points, rather than "holding steady" versus a 25 basis point hike. White House economic adviser Hassett said the October U.S. CPI report was disappointing and that the trickle-down effects of energy prices are showing up in the data.
As of this morning's close, spot gold fell 2.59% to $4,033.57 per ounce; spot silver dropped 3.50% to $51.54 per ounce; the 2-year U.S. Treasury yield surged more than 20 basis points in a single day, the largest one-day gain since last year's tariff turmoil; and the 10-year Treasury yield broke back above the 5% mark. In U.S. equities, the three major indexes closed lower across the board, with the Nasdaq down 0.74%, the Dow down 0.3%, and the S&P 500 down 0.38%. Nvidia fell more than 5%, extending its two-day decline to over 9%; the Philadelphia Semiconductor Index dropped 0.35%, with Intel and ARM down more than 2%, Broadcom up nearly 4%, NXP and TSMC up more than 2%, and AMD and Qualcomm up more than 1%; the memory sector was weak, with SK Hynix down more than 3% and SanDisk down 2.99%.
Yemen's Houthi Armed Forces Claim Attacks on Saudi King Khalid International Airport and Other Targets
According to CCTV News, on the 10th local time, Yemen's Houthi armed forces claimed to have once again attacked Saudi targets including King Khalid International Airport, the financial center, oil facilities, and military assembly points. The Houthi armed forces issued a statement that evening saying they used multiple ballistic missiles and drones to launch four rounds of attacks on Saudi Arabia. The Houthis said the first round struck Saudi King Khalid International Airport and several pumping stations of the Saudi east-west oil pipeline located in Riyadh, with the targets directly hit, causing fires and losses. The second round struck Saudi Aramco facilities in Buqayq. The third round struck a military assembly point led by Saudi officers in Yemen's Lahij province, causing heavy casualties. The fourth round struck the financial center in Riyadh, the Saudi capital. The Houthi armed forces also warned investors and enterprises through the statement to withdraw their investments from Saudi Arabia and advised transferring investments to peaceful and safe countries. The statement also denied Saudi claims that the Houthis attacked the east-west oil pipeline in Medina, saying their operation struck the east-west oil pipeline in Riyadh rather than the pipeline in Medina. The statement said the Houthi armed forces will continue to launch military operations against targets inside Saudi Arabia, insisting on meeting blockade with blockade and escalation with escalation, while striking Saudi military assembly points, until Saudi Arabia stops its military operations against Yemen and lifts the blockade.
Three Tankers Explode in the Strait of Hormuz
According to CCTV News, on the evening of the 10th local time, the Navy of Iran's Islamic Revolutionary Guard Corps said that on the afternoon of that day, a third tanker exploded after hitting a mine while navigating along a route in the Strait of Hormuz not authorized by Iran. Earlier, the Navy of Iran's Islamic Revolutionary Guard Corps announced that two tankers were forced to halt after violent explosions occurred while they were navigating along routes in the Strait of Hormuz not authorized by Iran.
Analysts: A-shares Are in a Phase of "Bottom Consolidation Plus Stock Game"
On Tuesday, the three major A-share indexes rose collectively, with total market turnover of 1,516.7 billion yuan, an increase of 22.2 billion yuan from the previous day, and more than 4,200 stocks advancing. Turning to the robotics sector that has attracted much attention recently, Wang Jun, deputy general manager and chief expert of Green Dahua Futures, said the rise in the robotics sector was driven by three factors: first, intensive realization of industry catalysts—Tesla's Optimus started early mass production, Nvidia's GR00T 2 and Anthropic's Fable 5.2 were released in succession, the physical AI narrative shifted from "whether the hardware can be built" to "whether the brain can be used," and domestic humanoid robot output for the full year is expected to exceed 100,000 units; second, low valuations provided price elasticity, with the sector's PE before the rally at about the 2nd percentile of the past five years, while holdings and crowding were both at low levels; third, profit-taking funds flowed out of the AI hardware main line, with the robotics sector seeing net main-force inflows of about 6.1 billion yuan on November 10. Sun Fukun, deputy general manager of Huayuan Futures, believes that funds are likely to continue flowing into the robotics sector in the short term—the Silicon Valley Humanoid Robot Summit in early December, Tesla's shareholder meeting, and the release of Optimus V3 constitute a series of consecutive catalysts, and the sector's valuation has not yet peaked (current PE percentile around 56%). In the medium term, profit realization still needs to be observed, and broad gains across individual stocks will be difficult to sustain, but shares of companies with real orders in areas such as reducers and sensors may continue to rise. In addition, port shipping and oil and gas extraction and services sectors were among the biggest decliners yesterday. Wang Jun believes that the recent sharp drop in international oil prices has directly transmitted to sectors including oil and gas extraction and services and coal mining and processing, with stocks such as China Oilfield Services, CNOOC, and Zhongman Petroleum among the biggest decliners. Oil and gas and coal have a linkage effect in energy pricing, and market risk appetite is also shifting, with growth stocks active and more than 4,200 stocks across the market rising, reducing demand for safe havens, while defensive sectors such as shipping, insurance, and electric power weakened in tandem. The dividend defensive allocation that previously served as a "safe harbor" for funds instead became a target for position adjustment. Sun Fukun believes that A-shares are currently in a phase of "bottom consolidation plus stock game": the policy bottom and valuation bottom have been confirmed, but the volume bottom has not been confirmed—Tuesday's turnover fell back to about 1.5 trillion yuan, active equity shrank, and incremental funds were limited to passive ETF buying. In addition, Sun Fukun reminded that under year-end assessment pressure, institutions prioritize "preventing givebacks," cashing in floating profits and suppressing volatility, while incremental funds mostly delay entry until early next year. Before the end of this year, the market's "shrinking volume plus rapid rotation" pattern is likely to continue, and a trending market will need to wait for volume to return above 1.8 trillion yuan before unfolding.
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