Wall Street Morning Report: Non-Farm Payrolls Surprise Sparks Rate Cut Trades, Lightwave Begins to Steal Storage Spotlight, 'Short Storage, Long Light' Becomes New Battleground

Every Monday to Friday morning, focusing on macroeconomics, US stocks, AI, precious metals, and crude oil, using data to review the market and trends to seize opportunities, produced by PANews.

Non-Farm Payrolls Impact Rate Hike Expectations, Hormuz Standoff Resurrects Oil Price Premium

Last Friday, the US non-farm payrolls for July unexpectedly decreased by 23,000, far below the market expectation of an increase of 80,000, and the employment data for May and June was revised down by a total of 103,000. The labor force participation rate fell to a five-year low. Following the data release, the market quickly reduced the odds of a Federal Reserve rate hike in September from about 55% to 40%, leading to a strong rebound in US stocks.

As of last Friday's close, the Dow Jones rose by 0.28%, the Nasdaq increased by 1.30%, and the S&P 500 rose by 0.62%, reaching a new closing high. Tom Siomades, Chief Market Economist at AE Wealth Management, believes that weak employment should worry the market, but strong earnings reports are becoming the dominant force in current pricing.

After the non-farm payrolls, all eyes are on the US July CPI to be released on Wednesday. A Reuters survey predicts that the overall CPI year-on-year will drop from 3.5% in June to 3.4%, and the core CPI will decrease from 2.6% to 2.5%; FactSet's forecasts point in a similar direction. Citigroup believes that if core inflation softens for the second consecutive month, a September rate hike can be largely ruled out; however, Bank of America warns that core service inflation may rise by 0.3% month-on-month, so the rate hike option cannot be completely removed from the table.

Over the weekend, no final agreement was reached in US-Iran negotiations. Iran and Oman stated that establishing new shipping routes is "very close," but Iran will link the reopening of the Strait to the lifting of sanctions, asset release, ending blockades, removing military threats, and compensation for losses. Trump told Axios that the US is handling the situation "low-key," focusing on economic pressure and a semi-negotiation state, and is not in a hurry to escalate militarily. Personnel adjustments in Iran's Supreme National Security Council, Houthi claims of attacks on Saudi Arabia's Jizan refinery, and attacks on UAE oil tankers collectively pushed oil prices higher on Monday. Brent crude rose more than 2% to above $84, while WTI traded around $78. Goldman Sachs still believes that the reasonable range for Brent is $80 to $90, but before a formal agreement is reached, oil prices are likely to continue to fluctuate sharply around geopolitical news.

Gold continued its strong performance, with spot gold rising 2.3% last Friday, surpassing $4,300, and briefly breaking through $4,370 during the session; it rose more than 7% for the week, marking the best weekly performance of the year. Silver rose about 3% in a single day, with a weekly increase of 10%. Since July 20, global gold ETF holdings have increased by 24 tons, and UBS even predicts that gold prices could rise to $5,000 in the first half of 2027.

"Short Storage, Long Light" Weekend Debate Heats Up, AI Infrastructure Sector Experiences Wild Mood Swings

Last week, AI funds began to reselect winners, with software, optical communication, and AI infrastructure showing significant strength, while the storage sector saw adjustments. Coherent rose by 13.44%, AAOI increased by 9.2%, Credo rose by 8.45%, Lumentum increased by 6.22%, and Corning rose by 5.4%; meanwhile, Seagate fell by 4.71%, Western Digital dropped by 3.8%, SanDisk decreased by 3.68%, SK Hynix fell by 3.9%, and Micron dropped by 0.44%.

The market even saw discussions about "short storage, long light" trades. Storage bulls have turned cautious in the short term, citing reasons such as redemption pressure from Korean leveraged ETFs, Rubin Ultra potentially reducing HBM configurations per rack, and concerns that storage prices may peak in the next two quarters; "white-haired stock god" Serenity believes that the fundamentals of storage have not fundamentally changed, and the market is merely rotating from one "bottleneck" to another.

Goldman Sachs TMT trader Peter Callahan further defines this change as a structural re-evaluation within AI infrastructure: the network traffic generated by AI agents is now exceeding human traffic, optical devices are outperforming storage, and corporate AI budgets are continuously expanding. Last week, the Nasdaq 100 rose by 5%, and the VIX fell to around 14, indicating a renewed risk appetite in the market.

The software sector also saw a strong rebound, with Atlassian's stock soaring 35% after its earnings report, and Palantir's stock rising nearly 40% for the week. The software sector has accumulated a 19% increase over two weeks, marking the strongest two-week performance since 2020. Of the 436 companies in the S&P 500 that have disclosed earnings, 85.1% exceeded analysts' expectations, far above the long-term historical average. GPU, optical modules, power, network devices, and software applications are becoming new sectors for profit verification.

Specific Project Actions and Stock Price Fluctuations:

• SpaceX rose 15.83% last Friday, with a two-day increase of about 23%. The large-scale lock-up stock release was initially seen as potential selling pressure, but it actually turned into a short covering rally. The company's tradable shares increased from about 639 million to 1.55 billion, and the stock price approached the $135 IPO price; there are still over 250 million shares shorted, with options trading volume reaching 2.24 million, including 1.3 million call options, setting a new historical high.

• Palantir rose 10.32%, with a weekly increase of nearly 40%. The US commercial business grew by 149% year-on-year, and the total value of US commercial contracts in the second quarter exceeded $2 billion, a year-on-year increase of 153%. Deutsche Bank upgraded its rating to "buy," and the sovereign AI positioning has gained institutional recognition.

• NVIDIA rose 2.27%, with a cumulative weekly increase of over 11%. NVIDIA continues to benefit from the AI capital expenditure cycle, and it is reported that it will invest $2 billion in AI data center power developer Lancium, with an additional $1 billion to be added after reaching additional power access milestones, bringing the potential total investment to $3 billion. Lancium has secured 4GW of power resources in Texas, and NVIDIA's layout shows that AI competition is extending from chips to power infrastructure.

• Optical communication has become the new main line of AI hardware: Coherent rose 13.44%, AAOI increased 9.2%, Credo rose 8.45%, Lumentum increased 6.22%, and Corning rose 5.4%. The market trading logic is shifting from HBM capacity expansion to cross-rack high-speed interconnection and 800G/1.6T optical communication. Goldman Sachs' Peter Callahan pointed out that since the third quarter, optical stocks have outperformed storage stocks by over 20 percentage points, with Coherent rising for seven consecutive trading days, with a total increase of 73%. This week, the earnings reports from Lumentum and Coherent will be key stress tests for AI optical module demand.

• The storage sector is under significant pressure, with Seagate down 4.71%, Western Digital down 3.8%, SanDisk down 3.68%, SK Hynix down 3.9%, and Micron down 0.44%. The market is concerned that the storage price cycle is nearing its peak, while the deleveraging of Korean leveraged ETFs may further increase short-term supply pressure on chip stocks. Citigroup has lowered its target price for Micron, exacerbating market concerns about the future peak of DRAM and NAND prices.

• Apple rose 0.29%, and Changxin Technology's concept is heating up: The Wall Street Journal reported that Apple is testing Changxin storage chips for use in iPhones and MacBooks to alleviate memory shortages caused by the AI boom. The report also stated that Apple has begun preliminary discussions with Changxin Technology regarding component supply, aiming to use related chips in some devices sold in China.

• Berkshire Hathaway restarted net stock purchases, buying $23.5 billion in stocks and selling $3.7 billion in the second quarter, marking the first net stock purchase in over three years; as of June 30, Alphabet has risen to become the largest holding, followed by American Express, Apple, Bank of America, and Coca-Cola. The market views this action as an important signal that Buffett's system is re-increasing its exposure to stock risks.

• Other giants: Google fell 0.96%, mainly due to significant internal restructuring, with DeepMind CEO Demis Hassabis transitioning to chairman, and daily management authority shifting to accelerate the commercialization of Gemini, causing internal cultural shocks; Tesla rose 2.83%, jointly launching the $16.8 billion Terafab project with SpaceX.

This Week's Focus:

August 10 (Monday)

• Yushutech STAR Market IPO Subscription: One of the most anticipated humanoid robot IPOs this year, online and offline subscriptions will start simultaneously. The subscription heat will directly reflect the risk appetite of the A-shares robot industry chain, with potential emotional catalysts in areas such as reducers, servo motors, sensors, and controllers.

• Changxin Technology's inclusion in the MSCI China All Shares Index takes effect: Changxin Technology has been included in the index due to its IPO listing, and the market is paying attention to passive fund allocation and the emotional spread of the domestic storage industry chain. Coupled with the news of Apple testing Changxin storage chips, the attention on domestic DRAM, packaging and testing, equipment, and materials may heat up.

August 11 (Tuesday)

• 12:30 Reserve Bank of Australia interest rate decision; 13:30 RBA Governor Philip Lowe's press conference: The market generally expects the cash rate to remain unchanged at 4.35%, focusing on whether cooling inflation, weakening employment, and real estate risks will prompt the RBA to signal future rate cuts.

August 12 (Wednesday)

• Lumentum, CoreWeave, and AMD will release earnings after US stock market hours: The performance and capital expenditure guidance of optical module leader Lumentum and computing power rental leader CoreWeave will directly test the real consumption of AI infrastructure; AMD's gross margin (expected 15-17%) and order conversion speed will determine the sentiment of the computing server sector.

• US EIA, OPEC, and IEA monthly reports will be released: The three major energy reports will focus on examining global crude oil supply and demand, inventory, OPEC+ production discipline, and demand outlook. If the reports show tightening supply or rising risks in Hormuz, oil prices may continue to rise and inflation expectations may be raised; if demand expectations are revised down, the momentum for oil price rebounds may be limited.

• 20:30 US July CPI: The market expects the overall CPI year-on-year to drop from 3.5% to 3.4%, and the core CPI year-on-year to decrease from 2.6% to 2.5%; if the data is below expectations, the bets on a September rate hike will continue to cool, and US Treasury yields and the dollar may decline, benefiting the Nasdaq, gold, long bonds, and high-valuation growth stocks; if the CPI is hot, the market will reprice tightening risks, and US stock valuations, especially for AI tech stocks, may come under pressure.

• 20:00 Tencent Holdings Q2 earnings conference call: The core heavyweight of Hong Kong stocks this week. The market will focus on the recovery of the gaming business, commercialization of video number advertising, fintech profit margins, AI capital expenditures, mixed Yuan models, and progress on WeChat AI features.

• Yushutech subscription payment: As a highly anticipated humanoid robot IPO, the payment situation and market heat will continue to influence the sentiment of the robot concept.

August 13 (Thursday)

• Cisco, Coherent, and Cerebras will release earnings after US stock market hours: Cisco will verify the demand for AI network devices, and Coherent will verify the prosperity of high-speed optical communication and 800G/1.6T optical modules. If orders, gross margins, and guidance are strong, the "long optical communication" trade may continue; if not, the recently surging optical module sector may face profit-taking.

• 06:00 Google product launch event: Expected to launch the Pixel 11 series, Pixel Watch 5, and Pixel Buds Pro, with the core focus on the deep integration of Tensor G6 and the Gemini ecosystem. If the edge AI experience exceeds expectations, it will catalyze AI smartphones, edge models, sensors, and the Android ecosystem.

• 20:30 US July PPI: PPI will answer whether corporate costs continue to be passed on to end consumers. If PPI is hot, even if CPI is moderate, the market may worry about recurring inflation; if PPI cools simultaneously, the "inflation down + policy pressure easing" trade will be further strengthened.

• 21:00 SanDisk Investor Day: The market will focus on NAND supply and demand, enterprise SSDs, capital expenditures, high-bandwidth flash roadmap, and long-term profit margin targets. Due to recent pressure on storage stocks, SanDisk's statements will directly impact Micron, Western Digital, SK Hynix, and the sentiment of the A-shares storage chain.

• JD Group Q2 earnings conference call, SMIC, and Hua Hong Semiconductor performance.

August 14 (Friday)

• US SEC 13F quarterly holdings disclosure deadline: The document will disclose the long positions of US hedge funds and other institutions as of June 30. The market will focus on whether large institutions are increasing allocations to AI, optical communication, power, energy, gold, and financial stocks; note that 13F has about a month and a half lag and only covers long positions, but it is still an important window for judging institutional style shifts.

• Applied Materials will release earnings after US stock market hours: The market will focus on DRAM, advanced packaging, wafer manufacturing equipment demand, and changes in orders from China.

• Bill Gates visits South Korea and discusses SMR small modular reactor cooperation with SK Group and HD Hyundai: The market is paying attention to the combination of nuclear energy, small modular reactors, and AI data center power demand. If cooperation details progress, it will strengthen the "AI power infrastructure" trading logic.