20261021 Afternoon News Briefing

US Stocks

Wall Street opened higher on Tuesday as earnings fireworks from the AI and space complex lifted sentiment, with SpaceX jumping 8% at the open and Tesla rising more than 3%. SpaceX's second quarterly report since its June listing showed revenue of $14.58 billion, up 161% year over year, and net profit of $4.4 billion — its first profitable quarter, versus a $1.05 billion loss a year earlier — while adjusted EBITDA surged 306% to $8.81 billion. Tesla reports its own third-quarter results early on October 22 Beijing time, with Robotaxi fleet expansion, FSD subscription progress and Optimus volume plans in focus.

Super Micro Computer was another standout, surging about 15% premarket after preliminary fiscal first-quarter revenue of $18.5–19.5 billion blew past the roughly $15.23 billion consensus and its own $14.5–15.5 billion guidance, with gross margin guided to 12–12.5%. The print ignited the server and memory trade: SK Hynix gained over 3%, while Micron, SanDisk and Western Digital rose 1–2%.

Beneath the rally, positioning turned cautious. Goldman Sachs said hedge funds are dumping technology stocks at the fastest pace in at least a decade. In Europe, France's 10-year government bond yield climbed to 5%, the highest since 2002, widening the spread against German Bunds and adding a sovereign-stress backdrop to global rate markets.

On the corporate front, OpenAI said it will extend ChatGPT's advertising business to 26 new countries, accelerating revenue diversification beyond subscriptions. Geopolitics also filtered into the tape: Trump said it was time for a change in who represents Ukraine in negotiations, while Kyiv voiced suspicion that Washington has at times restricted intelligence sharing — claims Trump countered by insisting the US still provides substantial support.

HK Stocks

Hong Kong ended lower, with the Hang Seng Index down 0.9% and the Tech Index off 1.26% as internet and tech names languished; storage-concept shares bucked the weakness. The day's biggest casualty was CATL, whose Hong Kong shares plummeted more than 11% (A-shares fell about 9%) after third-quarter gross margin sank to its lowest level since the fourth quarter of 2022. Goldman Sachs cut its target price on the battery giant by 9.6% on below-expectations net profit, though it maintained a Buy rating.

The listing pipeline remains a bright spot: the "A+H" roster keeps expanding, with multiple companies preparing Hong Kong IPOs. HKEX chairman Tang Ka-ching struck a confident tone, saying Asia will continue to be a global destination for capital allocation.

In regional diplomacy, Finance Minister Lan Fo'an told the APEC finance ministers' meeting that the agenda had been successfully completed with multiple practical outcomes achieved, underscoring China's fiscal-policy engagement with the region.

A-Shares

Mainland equities slid for another session on shrinking turnover: the Shanghai Composite fell 0.6%, the Shenzhen Component 0.82% and the ChiNext 1.62% — breaching 2,700 points for a fresh multi-year low, while the Shenzhen Component and CSI 300 hit 14-month troughs and only the STAR 50 edged up 0.06%. Total turnover was 1.44 trillion yuan, down from the prior day.

AI remained the resilient thread. Software and IT services surged, with Hailiang Data and Aerospace Information hitting limit-up and a software ETF's underlying index up as much as 1.7%; optical modules rebounded, lifting the ChiNext AI ETF index 1.73%. Electronics attracted over 8.5 billion yuan of main-capital net inflow and computers about 4.3 billion yuan. Data concepts exploded after the National Data Group was inaugurated in Xiong'an, Hebei — a milestone in marketizing data elements — sending Leyard, Zhaoxun Media, Huichen, 3VDays and Hailiang Data to limit-up, while Jiangsu province unveiled a 2026–2028 action plan for physical-AI and world-model high-quality datasets spanning five major tasks and 14 key items. Entertainment and media names rallied in tandem, with Reader Media and Zhongguang Tianze sealing late limit-ups.

Defensive and thematic pockets also outperformed. Livestock stocks charged higher on expectations of further hog-capacity cuts, with an agriculture ETF index up 1.83%. An ESMO data window lifted mRNA and Hong Kong-connect innovative-drug names, while brain-computer interface concept stocks spiked as much as 24% intraday on a heavyweight catalyst. Strategists stayed measured: Galaxy Securities recommends dividend assets as a base with selective tech additions ahead of third-quarter results, while Datong Securities cautioned that sentiment still dominates and a durable bottom will take time.

China Policy

The General Offices of the CPC Central Committee and the State Council released the "Opinions on Promoting the Deep Integration of Scientific and Technological Innovation and Industrial Innovation," targeting new-quality productive forces through an enterprise-led, collaborative industry-academia-research system. The document calls for "unveiling-the-list" and owner-system project mechanisms, milestone-based funding, "first-use-then-pay" licensing of university research to small firms, and decisive breakthroughs in integrated circuits, industrial machine tools, high-end instruments, advanced materials and biomanufacturing.

Auto innovation hit hard safety constraints. The MIIT and three other departments issued draft rules on vehicle design and R&D test validation, banning fully hidden door handles (side-impact door-release success of just 67% versus 98% for mechanical handles), "zero-gravity," rotating or flattened seats while driving (severe-injury risk 4.4 times normal posture, life-threatening risk 5.2 times), foldable and flexible screens, and pop-up roof cabins in motion. The rules mandate physical emergency controls with clear labeling, at least 30,000 km of reliability validation, and environmental testing of no less than one year following a "two winters, one summer" sequence, with real-vehicle testing and traceable data required. The backdrop: in August, nine automakers recalled over 4.276 million NEVs over hard-to-identify emergency pull handles.

On the cultural front, authorities released China's first five-year plan for cultural heritage — the "Cultural Heritage Protection and Inheritance 15th Five-Year Plan" — building a "big protection" framework with a national heritage catalog and database, unified supervision and legislation of a heritage protection law. Ahead of the 90th anniversary of the Long March's victory, the National Cultural Park build-out continues: a national census has catalogued more than 2,100 immovable Long March relics (63 newly discovered), roughly 40,000 movable artifacts including over 4,400 precious items, 74 memorial halls, and a 92% opening rate for major protected sites.

Tech AI / Robotics

SpaceX's earnings revealed an AI-first transformation. The unit renamed "Superintelligence" posted revenue of $7.56 billion, up 830% year over year — about 52% of total revenue, surpassing Starlink as the largest source for the first time, driven by cloud compute leasing, Grok's expansion and the consolidation of Cursor, acquired in August. Starlink revenue rose 69.4% to $5.25 billion with subscribers at 13.6 million (up 1.6 million quarter over quarter) and ARPU up 5% to $69. Musk said Grok infrastructure, cloud deals and paid users should push annual recurring revenue to $500 billion–$1 trillion by the end of next year, and confirmed that special committees at SpaceX and Tesla are studying a potential merger — "a merger has many benefits," though it would require approval from 50% of Tesla shareholders. The CFO guided first-quarter revenue to $33–37 billion, far above the ~$22.2 billion consensus.

China's auto-AI stack advanced on two fronts. Huawei's Jin Yuzhi said autonomous driving will reshape mobility, with Yinwang's R&D investment approaching 20 billion yuan this year, while Chery released its vertical foundation model CheryMind and the Ziwei chip.

Elsewhere, researchers reported that AI agents can spontaneously develop a shared vocabulary without human-taught language or preset communication rules — a window into emergent machine communication. HONOR launched the WIN2 and WIN RT2 laptops starting at 3,149 yuan after national subsidies. Insta360 moved to cool a speculative rally, clarifying that its 1.8 million yuan sponsorship of a jet-powered hoverboard vlogger is creator support, not an equity investment.

Comprehensive Finance

CATL's third quarter crystallized the battery industry's split picture. Q3 revenue rose 58.58% to 165.221 billion yuan and net profit 14.54% to 21.246 billion yuan, but nine-month figures — revenue of 442.137 billion yuan (+56.19%) and net profit of 64.530 billion yuan (+31.60%) — masked sharp deceleration: quarterly profit growth slowed from 48.52% in Q1 and 36.46% in Q2 to 14.54%, with Q3 net profit down 5.77% sequentially and nine-month operating cash flow down 23.60%. Combined power-and-storage sales topped 260 GWh, with storage about a quarter of volume and growing near 60%; global power-battery share held at 39.4% (January–August, +1.7pp) and domestic share at 44.16%. With September NEV retail down 16.7% to 1.084 million units, the growth focus is shifting to overseas orders and storage, where 587Ah large cells and sodium-ion systems signed with European clients are key.

Semis and supply chains delivered their own beats. Montage Technology guided Q3 revenue to about 2.079 billion yuan (+46%) and net profit of 1.2–1.3 billion yuan (+153.6%–174.7%) on surging DDR5 interface-chip demand from AI inference, with interconnect-line gross margin at 68.0–68.5%; an independent director proposed a 300–500 million yuan buyback. Apple added Perryman Company as a US titanium supplier — up to $100 million over three years, using at least 80% recycled material — and expanded Qnity's role in the iPhone 18 Pro's variable-aperture camera, but its first foldable iPhone Duo faces severe supply limits: online delivery times stretched to about 14 weeks, the longest for a new iPhone in a decade per Morgan Stanley, and JPMorgan cut its shipment forecast to 8–9 million units from about 10 million.

State capital deepened its market-stabilizing role. China Reform and China Chengtong — which announced roughly 60 billion yuan of combined A-share increases in July, with China Reform deploying over 50 billion yuan of special relending and supporting funds — revealed Q3 moves: adding to GRINM Advanced Materials (stake raised to 3.86%) and Hygon Information, and newly entering China Jushi as fourth-largest float holder and CSSC Special Gas as seventh. The Shanghai Stock Exchange also convened a mobilization meeting for the first batch of actively managed ETFs, attended by nine fund managers and seven brokers, after CSRC chairman Wu Qing approved their registration; the SSE hosts 943 ETFs with 3.35 trillion yuan in assets, over half — nearly 1.7 trillion yuan — held by long-term capital.

Other developments rounding out the global picture:

• European gas surge: Dutch TTF November futures briefly topped €90/MWh, the highest since December 2022 and up more than 180% from this year's low, with EU storage at just 74.6% of capacity; domestic LNG stood at 6,185.9 yuan/ton, up 61.07% year over year. Guanghui Energy guided nine-month net profit of 2.7–2.8 billion yuan, up 166.83%–176.71%.
• Indonesia's rescue package: Bank Indonesia held rates and will cut the reserve requirement ratio to 8% on November 1 and 7% on December 1, releasing about 190 trillion rupiah; the Jakarta index reversed a near-2% drop to close up 0.94%. Authorities also halved the daily limit-down to 7% and will drop tightly held stocks — about 18% of index weight — from the benchmark after MSCI warned of a demotion to "standalone" status.
• Rare-earth friction: With Japan's yttrium stockpile months from exhaustion, Foreign Ministry spokesperson Mao Ning said China's export controls are lawful and aim to stop Japan's "re-militarization" and nuclear ambitions, while stressing Beijing's commitment to stable global supply chains.
• Gray-market AI: Second-hand platforms are selling "cracked" memberships and rented accounts for Doubao, DeepSeek and Kimi for a few yuan; Kimi said such rentals are unauthorized and violate user agreements, and security experts warn relay servers can log every conversation, exposing users to data leakage and resale risks.