The People's Bank of China (PBOC) released its second-quarter monetary policy report for 2026, addressing key topics such as exchange rates and the direction of future policy. The central bank emphasized the need to fully utilize existing policy tools and promptly design new, practical measures. It also stressed the importance of adjusting the intensity, timing, and pace of policy implementation based on both domestic and international economic conditions. Additionally, the report called for diversifying loan pricing benchmarks and guiding financial institutions to enhance their interest rate pricing capabilities.

Tencent Holdings reported a solid financial performance for the second quarter of 2026, with total revenue reaching RMB 204.785 billion, an 11% year-on-year increase. Operating profit, calculated under non-International Financial Reporting Standards, rose 9% to RMB 75.636 billion. Key highlights include the launch of a small-scale grayscale test for its AI assistant, "Xiao Wei," within WeChat, and its "WorkBuddy" product achieving rapid user growth and strong retention rates. The company's large model, Hy3, has consistently ranked among the global top three since its release. Total user time spent on its video channel grew over 20% year-on-year, while value-added services revenue increased 8% to RMB 98.4 billion. Domestic gaming revenue was a standout, climbing 17% to RMB 47.3 billion.

US consumer price index (CPI) data for July came in line with expectations, with the annual rate cooling to 3.4% from 3.5% in June. Core CPI slowed to 2.5% from 2.6%. Following the data release, traders maintained their bets on a 45% probability of a Federal Reserve rate cut in September. US stock markets opened higher, with the Dow Jones Industrial Average rising 0.33%, the S&P 500 gaining 0.49%, and the Nasdaq climbing 0.9%. Memory chip stocks were particularly strong, with Sandisk up 6.9%, SK Hynix rising 5.8%, and Micron Technology advancing 5.5%.

AI-related stocks surged on Wall Street, with optical communication companies leading the rally. Shares of Lumentum jumped over 10% after the company reported better-than-expected revenue and profit for its fiscal fourth quarter and full year 2026. The strong performance has reignited interest in the sector, with analysts at Everbright Securities suggesting that the upcoming August earnings season could be an optimal entry point for investors, driven by high-tech profit growth and supportive policies.

In a rare move, the PBOC announced it will conduct overnight reverse repurchase operations in the middle of August, a departure from its usual practice of conducting such operations only at the end and beginning of months. The central bank stated that the daily operation volume will not exceed RMB 600 billion. Experts view this as a sign of more flexible and forward-looking liquidity management, aimed at smoothing short-term funding fluctuations caused by tax payments and government bond issuance.

But Bin's fund, Orient Harbor, made a significant shift in its US stock portfolio during the second quarter. The fund's holdings increased to approximately $1.65 billion, up 45.6% from the end of the first quarter. Notably, the fund completely exited positions in Apple, Tesla, and the Direxion Daily NASDAQ 100 Bull 3X Shares ETF, while initiating new positions in seven AI-related companies, including Intel, Sandisk, AMD, Marvell Technology, Arm Holdings, Broadcom, and Lumentum.

Duan Yongping, through his firm H&H International Investment, increased his stake in Pop Mart, lifting his long position from 5.55% to 7.70% of the company's H-shares. The filing suggests this may be related to options trading.

Elon Musk, speaking at a SpaceX all-hands meeting, outlined a future where artificial intelligence will dominate the company's valuation. He predicted that within five years, AI would account for 99% of SpaceX's value, with its traditional aerospace business serving as a supporting infrastructure. Musk also claimed SpaceX has built the world's most powerful AI training cluster and plans to expand its computing power tenfold to 10 gigawatts by the end of next year.

The year's most expensive new stock, Pinzhen Laser, saw a minor rejection rate. The company, which priced its IPO at RMB 186.88 per share, reported that 10,800 shares were left unsubscribed by online investors, representing just 0.11% of the total offering. The shares were taken up by the underwriter, CITIC Securities. A single lot of the stock requires a payment of RMB 93,400.

In market news, DeepSeek has reportedly registered a new WeChat public account, sparking speculation about a new product launch. Early testers have praised the new model, which is being called "Black Whale," as potentially the best in the world. Analysts at Guosheng Securities believe the large language model (LLM) sector is shifting from a focus on parameter scale to optimization of training strategies, which could be more efficient.

Other notable developments include the successful first international commercial flight of China's C919 large passenger aircraft, reports that Microsoft has raised licensing fees for Windows 11, and news that Samsung and SK Hynix are reportedly considering a combined $140 billion in dividends and share buybacks. The National Development and Reform Commission (NDRC) also held a seminar on the development of the bio-pharmaceutical industry.

On the corporate front, Contemporary Amperex Technology Co. Ltd (CATL) announced plans to invest RMB 2.475 billion in a green industry fund in Hainan. Baofeng Energy reported a 70.14% increase in net profit for the first half of 2026, reaching RMB 9.728 billion. Yihai Kerry saw its net profit rise 30.69% to RMB 2.294 billion. Tianfu Communication plans to launch a restricted stock incentive plan, while Aotai Bio has completed a share buyback of RMB 199 million.

In negative news, Chuanzhi Education announced that its stock is under key monitoring by the Shenzhen Stock Exchange and may face a trading suspension. Zhongjian Technology received a pre-penalty notice from the Zhejiang Securities Regulatory Bureau for suspected violations of information disclosure. Zhiyuan New Energy reported that a major shareholder has reduced its stake, while Haiyang Technology and Nanhua Instruments also saw changes in their shareholder structures.