Breakfast | Chip stocks support the rebound of U.S. stocks! Nissan and Honda officially start merger talks

Hong Kong and US stocks are both closed for half a day today.

Overnight Market Overview

On the eve of Christmas, market trading is relatively light, with chip stocks supporting a rise in US stocks during the session, rebounding for several consecutive days, with chip indices up over 3%.

Historically, December is the second-best month for stock market performance, with most gains typically occurring in the latter half of the month. Some investors hope that the "Santa Claus rally" can help the market reach a peak by the end of 2024.

NVIDIA closed up 3.69%, with Bank of America listing NVIDIA and several other chip stocks as top investment options for 2025. Morgan Stanley rated NVIDIA as a "preferred stock" for 2025, citing its Blackwell chip series as a strong "tailwind," with a target price of $166, about a 23% increase from current levels.

Tesla closed up 2.27%, recalling nearly 700,000 vehicles in the US due to a tire pressure warning light issue. This problem could lead users to drive with low-pressure tires without their knowledge. From November 5 to last Friday, Tesla's stock price has surged about 67%, with analysts believing that the stock price could drop over 43% by 2025.

Meta closed up 2.49%, as it accelerates its expansion into the wearable device sector amid competition from Apple, Google, and Snap, planning to add a display to its Ray-Ban smart glasses. Zuckerberg previously stated that he hopes to make smart glasses the next generation of computing platform.

Microsoft rose over 0.2% before closing down 0.31%, as it considers adding several non-OpenAI models to its 365 Copilot product. Microsoft hopes to achieve diversity in AI models based on existing OpenAI technology.

Google A closed up 1.68%. Amazon closed up 0.06%. Apple closed up 0.31%, reaching a historic high, with reports that Apple is developing a new smart doorbell that will support Face ID.

Argentinian online travel company Despegar closed up 32.83%, as global investment firm Prosus plans to acquire the company for $1.7 billion.

Honda Motor's US stock rose over 15% before closing up 12.72%, as Nissan and Honda officially initiated merger talks, aiming to complete the merger by 2026, which would make them the third-largest globally. Renault, which holds a minority stake in Nissan, closed up 1%.

Rumble closed up 81.22% after rising over 100%, as the company previously received investment from Tether.

Chinese Ministry of Commerce: The US's 301 investigation into China's chip industry policies is a repeated mistake

A spokesperson for the Chinese Ministry of Commerce stated that the US investigation will disrupt and distort the global chip industry supply chain and will also harm the interests of US companies and consumers. China urges the US to respect facts and multilateral rules and to immediately stop its erroneous practices. China will closely monitor the progress of the investigation and will take all necessary measures to firmly defend its rights and interests.

Trump Responds: I am the President, Musk is not

Trump stated that claims about him handing over the presidency to Musk are "a scam." He half-jokingly said he feels safe because Musk cannot be President of the United States as he was not born in this country

Masayoshi Son's "Obsession": Missed NVIDIA, Build One Himself?

Media reports indicate that Masayoshi Son is pushing ARM to deeply transform into the AI chip field, aiming to launch the first batch of deliverable AI chips by 2026, with models available as early as next summer.

Nissan and Honda Officially Start Merger Talks, Planning to Complete by 2026, Becoming the Third Largest Globally After Merger

If Mitsubishi Motors joins the merger process in the future, the annual vehicle sales of the merged company will exceed 8 million, making it the third largest automotive group in the world, following Toyota and Volkswagen. Honda President Toshihiro Mibe stated that the success of the negotiations depends on whether Nissan can successfully turn its losses into profits.

NASDAQ 100 Rebalancing Shuffle: Tesla, Meta, and Broadcom Weights Decrease, Apple and NVIDIA Weights Increase

Following Broadcom's recent surge and its weight surpassing the 45% threshold, NASDAQ 100 has undergone another rebalancing adjustment since last July. Tesla's weight dropped from 4.9% last Friday to 3.9%, Broadcom's from 6.3% to 4.4%, and Meta's from 4.9% to 3.3%. The weights of Apple, NVIDIA, Microsoft, and Google's parent company Alphabet have all increased.

Hong Kong Stock Connect Sees Record Inflows This Year

As of December 20, mainland investors have purchased HKD 778 billion (approximately USD 100 billion) worth of Hong Kong stocks through the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect this year, setting a new annual record since the launch of the Stock Connect in 2016. In the fourth quarter, mainland investors' trading share in the Hong Kong market reached a record 45%.

U.S. Durable Goods Orders for November Show Initial Month-on-Month Change of -1.1%

Core capital goods orders saw significant growth, marking the largest monthly increase in over a year, bringing a glimmer of optimism to the U.S. economy.

U.S. New Home Inventory Hits Highest Level Since 2007 in November, Home Prices Drop 6.3% Year-on-Year to New Low Since Early 2022

Due to storms in the southern U.S., some transactions were delayed until November, leading to a month-on-month increase in new home sales, although the increase was below expectations. The supply of unsold new homes rose to the highest level since the end of 2007. The median price of newly built single-family homes fell 6.3% year-on-year to USD 402,600, the lowest level since February 2022, marking a return of new home prices below existing home prices.

Goldman Sachs: Avoiding Government Shutdown Useless, Greater Sell-off Space for U.S. Stocks Ahead

Goldman Sachs pointed out that last Friday, known as "Triple Witching Day," U.S. stock trading volume hit a record high. From Monday to Thursday last week, hedge funds' short selling of U.S. stocks reached the largest scale since early January; based on the size of CTA's long positions in U.S. stocks, there is significant room for sell-off and little room for buying; while the U.S. government avoided a shutdown, it faces greater fiscal challenges; investors are betting on increased volatility around Trump's inauguration day in January next year