Daily Brief Thematic (Sector/Industry): Ohayo Japan | Chip Stocks Drive Nasdaq Higher and more

• The Nasdaq jumped 2.17%, driven by tech and semiconductor stocks. Nvidia surged 8%, and AMD rose nearly 5%
• Mitsui & Co. is doubling its share buyback limit from 200 billion to 400 billion yen, the largest in its history.
• Kubota acquired U.S. agricultural startup Bloomfield Robotics, which specializes in AI-powered fruit analysis using tractor-mounted cameras

• Topsports International Holdings (6110 HK) miss suggests inventory fire sale ahead. Negative for demand in China, Nike (NKE US), Anta Sports Products (2020 HK) and the whole sector
• Chinese consumers aren’t buying Bayerische Motoren Werke (BMW) (BMW GR) or going to the Movies
• But Americans are still walking in Westerns Boots Boot Barn Holdings (BOOT US) 

• Ally Financial (ALLY US) gave a poor view of now and the immediate future for credit costs within its primary loan book, used cars for subprime borrowers
• There is often good read-through for mainstream banks and overall credit metrics, we saw this in Thailand before 1997 and in the US with Indymac, Countrywide, Household
• If the Fed has a better view on granular data than one single finance company, we believe they will use this data when considering rate cut magnitude, next week

• Major rebound for tech/AI as markets went risk-on with the debate de-risked and consumer inflation data adding to the certainty for Sep rate cuts and a soft landing for the US economy.
• Renewables in Japan should follow US names higher after the likes of FSLR surged on expectations measures such as the inflation reduction act will continue.
• SPE set to surge, but avoid excessive optimism for China export names after Harris comments that the US will win the AI and quantum computing race, and Trump’s China critisism.

• The EU AI Act’s strict testing for high-risk AI may increase compliance costs for tech firms, forcing them to slow down releases or invest more in safety protocols. 
• California’s AI Bill anticipates future advancements, putting tech firms on notice, driving pre emptive transparency efforts, and likely raising operational costs for scaling AI systems. 
• Tech giants like Meta and OpenAI, with democrats like Pelosi oppose California’s SB 1047, citing risks to open-source AI and innovation. Prominent figures like Musk and Anthropic AI support regulation.

• Paladin announcement surprises after lack of information in the morning
• Greatland raises $500 million for Newmont’s Telfer, with potential deferred payments
• Telfer nearing end of its life, but potential for new opportunities with Greatland’s involvement

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• The downturn in the property market is an indisputable fact, but who can survive this disaster depends on whether they can “turn around” quickly enough.
• In fact, in addition to the word “split”, the recent theme of the property market also revolves around the word “reform”.
• For example, the government has taken the lead in “converting” 20% of the commercial floor space in the Hung Shui Kiu New Development Area in Yuen Long into residential buildings.