Daily Synopsis of the New York market close

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Baidu reveals new AI products, including text-to-image generator and no-code app tool, as it expands AI offerings. China’s surging copper production threatens global smelters, raising concerns over margins and overcapacity. Japan’s minority government could boost retail, utilities, and tech sectors, while investing heavily in semiconductors and AI. Oil prices remain weak due to demand concerns and strong dollar, as markets await OPEC guidance. Ivanhoe’s Friedland downplays US tariff impact on China, citing reduced export reliance. Asian stocks retreat while Bitcoin soars on Trump euphoria, with investors betting on pro-growth policies.

Baidu Expands AI Offerings with Text-to-Image and No-Code App Tools

Baidu Inc., China’s leading search engine, revealed new AI-driven products at its annual Baidu World Conference, signaling its push into large language model (LLM) applications. Among the highlights are I-RAG, a text-to-image generator designed to mitigate “hallucination” issues—common in AI image generation—and Miaoda, a tool that enables users to create software without needing coding skills. CEO Robin Li also noted that Baidu’s Ernie platform now handles 1.5 billion daily interactions, up from 200 million in May, underscoring the company’s rapid AI expansion. Additionally, Baidu debuted AI-powered smart glasses, further integrating AI into its product ecosystem.

Investment Insight

Baidu’s strategic focus on AI commercialization, particularly through scalable tools like no-code solutions and smart hardware, positions it as a key player in China’s AI race. Investors should monitor Baidu’s ability to convert these innovations into revenue streams amidst competition from domestic rivals like ByteDance.

Market price: Baidu Inc. (BIDU): $88.20

China’s Copper Production Surge Threatens Global Smelters

China’s rapid expansion in copper production is squeezing margins globally and could force smelters in countries like Chile and Europe to scale back. As China approaches 50% of the world’s refined copper output, its smelters continue to grow capacity despite shrinking treatment fees, increasing pressure on global operations. With demand for copper set to soar—driven by the energy transition and electric vehicles—China’s dominance in refining capacity is raising concerns internationally. This week’s Asia Copper Week in Shanghai will see key industry players discuss the worsening ore supply gap and potential curtailments outside China.

Meanwhile, Russia’s MMC Norilsk Nickel is exploring plans to build a 500,000-ton copper smelter in southern China, further strengthening China’s grip on copper processing.

Investment Insight

China’s copper production boom creates headwinds for non-Chinese smelters, with growing overcapacity and margin compression as key risks. Investors should keep a close eye on China’s ability to manage overproduction while maintaining profitability in the face of global demand shifts.

Market price: Copper Futures: $4.188 per pound

Weak Government in Japan Could Boost Retail, Utilities, and Tech, While Semiconductors Get Major Support

Japan’s minority government under Prime Minister Shigeru Ishiba may provide a boost to sectors like retail, utilities, and tech, as the administration looks to maintain support from opposition parties. Tax cuts aimed at increasing disposable income are on the table, which could benefit consumer-facing companies such as Ryohin Keikaku and Shimamura if the Democratic Party for the People (DPP) succeeds in raising the tax-free income ceiling. At the same time, the opposition’s pro-nuclear stance is likely to support utility stocks, as plans to restart additional reactors move forward.

Meanwhile, Ishiba has also announced a massive ¥10 trillion ($65 billion) investment in Japan’s semiconductor and AI sectors, aiming to unlock ¥50 trillion in public and private investment over the next decade. This initiative is part of a broader effort to ensure Japan remains competitive in the global chip race, particularly as the U.S. and China pour resources into advanced semiconductor technologies. The funding is expected to drive growth in Japan’s tech sector, with companies like Renesas Electronics and Tokyo Electron well-positioned to benefit from the government’s AI and chip ambitions.

Investment Insight

Retail and utility stocks stand to gain from increased disposable income and pro-nuclear policies, while tech firms could see long-term growth from Japan’s aggressive investment in AI and semiconductors. However, political gridlock may slow decision-making on military spending and corporate reforms, creating challenges for defense-related stocks. Investors should focus on the opportunities in Japan’s chip sector as public and private investment accelerates under favorable policy frameworks.

Market price: Nikkei 225: JPY 39,376.09