US-China Summit Results To Be Released Monday, Week In Review
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Week in Review
- Asian equities were mixed but mostly lower for the week as South Korea and Japan outperformed, while Indonesia and Hong Kong underperformed.
- President Xi was in Washington, DC this week for high-level meetings with President Trump, the first state visit in 11 years. The two leaders are expected to discuss global AI governance, lowering trade tariffs, establishing US manufacturing operations for China-based firms, and more.
- AI lab DeepSeek, which is expected to go public on Shanghai’s STAR (Science & Technology) Board in Q4 2026 or Q1 2027, announced that its expected annual revenue doubled year-over-year to $1 billion for 2026.
- Healthcare stocks outperformed this week on speculation of AI-driven acceleration in biotech and potential deals for pharmaceutical companies to come out of the Trump-Xi summit this week.
Friday's Key News
Asian equities were mixed overnight, as Japan outperformed and Hong Kong underperformed, while Mainland China and Taiwan were closed for the Mid-Autumn Festival and South Korea was closed for Chuseok (Thanksgiving).
US Trade Representative Greer said the results from the Trump-Xi summit will be announced Monday. Thus far, the media has highlighted the lack of tangible results so far, other than Treasury Secretary Bessent’s comments on extending the trade truce through January. Nonetheless, the high level of engagement is a significant improvement from the previous administration. It is amazing to think there has not been an official state visit by China to the US in 11 years.
With Southbound Stock Connect closed due to the Mainland holiday, Hong Kong was effectively a ghost town, as volumes fell -36% from yesterday to just 38% of the 1-year average. Hong Kong followed US stocks lower, matching the performance of US-listed China stocks yesterday. Without Southbound Stock Connect, which has only had two net outflow, i.e. net selling, days since August 24th, nobody seemed to buy the dip. This likely exacerbated the move lower, though the market rebounded and grinded higher off of its morning lows. With that said, 28 stocks hit a 52-week high versus 184 hitting a 52-week low, while decliners beat advancers by nearly 5 to 1.
Healthcare was the only positive sector in Hong Kong overnight. Pharmaceutical contract research giant Wuxi Biologics gained +2.12% after announcing that a Mainland factory passed a US Food & Drug Administration (FDA) inspection. Lenovo gained +3.18% after announcing winning a contract to supply Akamai Technologies, a cloud computing and cybersecurity firm. Hong Kong’s most heavily traded stock was Tencent, which fell -0.41% on very light volume.
Autos were lower along with everything else. Continued negoriations and discussions in the EU around electic vehicle and hybrid imports from China likely weighed on the subsector. One assumes they’ll ban the imports, though the real solution is to make a better car!
CNBC interviewed US Ambassador to China Perdue. He made it clear that the US does not want to be dependent on China as a “single source supplier” for pharmaceuticals and rare earths. After port closures during COVID caused real disruptrions to the US' supply chain of pharmaceuticals, that makes sense to me. He also alluded to the potential for two more meetings between Trump and Xi, at the Asia-Pacific Economic Cooperation (APEC) meetings in Shenzhen and at the G20 in Miami. He stated that the US made it clear that the US is not a “declining power”.
I found Perdue to be a little negative, though I do not believe he is in Trump’s inner sanctum. That is unlike US Trade Representative, who is clearly in the inner sanctum. Greer was more positive as he stated “The Thucydides Trap isn’t real.” He also stated more summit details would be released on Monday, including on the US-China Board of Trade.
The funny thing to me is the constant focus on trade of physical goods. The US has a surplus of services exports to China, but we do not talk about that. We similarly do not tend to talk about the USD half-trillion worth of US corporate revenues generated in China annually from US-owned factories. That does not show up in trade data either. Weren’t all those US executives at the White House dinner for a reason? The Roman emperors gave their citizens bread and gladiator games. We get this nonsense.
President Xi have three speeches while in the US: one upon his arrival at Andrews Air Force Base, one at the White House welcoming ceremony, and a final speech at last night’s dinner. In reading the three speeches, it appears President Xi and President Trump have a real relationship. Mainland media reported that President Xi genuinely laughed at President Trump’s portrayal of his predecessor Joe Biden. Xi’s speeches included favorable references to US-China cooperation during World War II, the US’ 250th anniversary, and President Trump’s “Make America Great Again” initiative. President Xi stated the US-China should strengthen communication, cooperate sincerely, and coexist peacefully
Hong Kong-listed companies that had buybacks that took place today, but were announced after the close included Tencent, which repurchased 231,000 shares, Baidu, which repurchased 589,050 shares, and KE Holdings, which repurchased 541,458 shares.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -1% |
| Hang Seng Tech | HSTECH Index | -1.1% |
| Hong Kong Turnover | HKTurn Index | -35.9% |
| Hong Kong Short Sale Turnover | HKSST Index | -24.3% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 25% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Closed |
| China (Shanghai) | SHCOMP Index | Closed |
| China (Shenzhen) | SZCOMP Index | Closed |
| China (STAR Board) | Star50 Index | Closed |
| Mainland Turnover | .chturn Index | Closed |
| Japan | NKY Index | 1.3% |
| India | SENSEX Index | 0.4% |
| Indonesia | JCI Index | -0.9% |
| Malaysia | FBMKLCI Index | 0% |
| Pakistan | KSE100 Index | 0.2% |
| Philippines | PCOMP Index | 1.7% |
| South Korea | KOSPI Index | Closed |
| Taiwan | TWSE Index | Closed |
| Thailand | SET Index | 0.3% |
| Singapore | STI Index | 0.5% |
| Australia | AS51 Index | -0.4% |
| Vietnam | VNINDEX Index | 0.6% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 38 | Closed |
| Advancing Stocks | 100 | Closed |
| Declining Stocks | 461 | Closed |
| Outperforming Factors | None | Closed |
| Underperforming Factors | Liquidity, Quality, Large Caps | Closed |
| Top Sectors | Healthcare | Closed |
| Bottom Sectors | Energy, Financials, Consumer Staples | Closed |
| Top Subsectors | Pharmaceuticals, Consumer Durables, Apparel | Closed |
| Bottom Subsectors | Machinery, Petroleum & Petrochemicals, Coal | Closed |
| Southbound Connect Buys | Closed | N/A |
| Southbound Connect Sells | Closed | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 165 | -1.01 |
| Communication Services | 11 | -0.75 |
| Consumer Discretionary | 28 | -1.34 |
| Consumer Staples | 13 | -1.46 |
| Energy | 6 | -1.76 |
| Financials | 25 | -1.48 |
| Health Care | 16 | 0.85 |
| Industrials | 22 | -1.28 |
| Information Technology | 12 | -0.6 |
| Materials | 14 | -0.58 |
| Real Estate | 7 | -1.34 |
| Utilities | 11 | -0.44 |
| Mainland China Listed | 386 | -1.92 |
| Communication Services | 8 | -1 |
| Consumer Discretionary | 26 | -0.67 |
| Consumer Staples | 19 | -1.29 |
| Energy | 12 | 0.86 |
| Financials | 64 | -0.51 |
| Health Care | 31 | -2.7 |
| Industrials | 58 | -1.79 |
| Information Technology | 95 | -3.03 |
| Materials | 52 | -3.15 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -0.4 |
| Alibaba HK | 9988 HK Equity | -1.5 |
| JD.com HK | 9618 HK Equity | -1.8 |
| NetEase HK | 9999 HK Equity | -3.1 |
| Yum China HK | 9987 HK Equity | -1.4 |
| Baozun HK | 9991 HK Equity | -0.3 |
| Baidu HK | 9888 HK Equity | -1.2 |
| Autohome HK | 2518 HK Equity | -0.5 |
| Bilibili HK | 9626 HK Equity | 0.1 |
| Trip.com HK | 9961 HK Equity | -1.3 |
| EDU HK | 9901 HK Equity | 0.9 |
| Xpeng HK | 9868 HK Equity | -1.9 |
| Weibo HK | 9898 HK Equity | -1.4 |
| Li Auto HK | 2015 HK Equity | -3.3 |
| Nio Auto HK | 9866 HK Equity | -1.2 |
| Zhihu HK | 2390 HK Equity | 6 |
| KE HK | 2423 HK Equity | -0.8 |
| Tencent Music Entertainment HK | 1698 HK Equity | 1.1 |
| Meituan HK | 3690 HK Equity | -0.8 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | -0.4 |
| ALIBABA GROUP HOLDING LTD | -1.5 |
| XIAOMI CORP-CLASS B | -2.6 |
| AIA GROUP LTD | -2.7 |
| LENOVO GROUP LTD | 3.2 |
| PING AN INSURANCE GROUP CO-H | -1 |
| KINGBOARD LAMINATES HLDG LTD | 0.2 |
| MEITUAN-CLASS B | -0.8 |
| HONG KONG EXCHANGES & CLEAR | -1.3 |
| BYD CO LTD-H | -1.8 |
Last Night's Exchange Rates, Prices, & Yields
Mainland China's currency, bond, and commodity markets were closed overnight. They will reopen on Monday.
