U.S. Stock Market Outlook | Three major index futures rise together, seasoned investors call for selling the "Seven Giants," U.S. stock market closed on Wednesday

Pre-Market Market Trends

1. As of December 31 (Tuesday), U.S. stock index futures are all up before the market opens. As of the time of writing, Dow futures are up 0.28%, S&P 500 futures are up 0.34%, and Nasdaq futures are up 0.43%.

1. As of the time of writing, the German DAX index is down 0.38%, the UK FTSE 100 index is up 0.66%, the French CAC40 index is up 0.68%, and the European Stoxx 50 index is up 0.84%.

1. As of the time of writing, WTI crude oil is up 0.80%, priced at $71.56 per barrel. Brent crude oil is up 0.73%, priced at $74.53 per barrel.

Market News

Trading Reminder: U.S. stock markets will be closed for one day on January 1 due to the New Year's holiday. January 1, 2025 (Wednesday) is a New Year's holiday, and U.S. stock markets will be closed for one day. Normal trading will resume on January 2, 2025 (Thursday).

Federal Reserve's Daly: Cryptocurrencies should be viewed as independent assets and not confused with gold. San Francisco Fed President Daly stated that cryptocurrencies "can be a currency. It may be a medium of exchange... It can be a stock—a store of value or sometimes a depreciating asset. We just need to define these terms. So I don't think it is gold. It sometimes has properties like gold, but I don't think so." Daly's assessment differs slightly from that of Federal Reserve Chairman Powell, who earlier this month stated, "People view Bitcoin as a speculative asset. It's like gold, only it's virtual, it's digital. People don't see it as a means of payment or a store of value. It's very volatile. It's not a competitor to the dollar; it's a real competitor to gold."

Veteran investors warn: Sell off the "Seven Giants" quickly, as U.S. stocks are about to plunge 10%. Max Wasserman, senior portfolio manager at Miramar Capital, stated that investors should reduce their positions in the "Seven Giants" of U.S. stocks and reallocate capital to "safer, lower-valued dividend growth stocks" to mitigate portfolio risks in 2025. He expects the overall stock market to soon decline by 10%, which will lead to a drop in the "Seven Giants." He pointed out that the risk-reward ratio for mega-cap stocks is currently asymmetric. Additionally, Wasserman recommends maintaining short-term investments in the bond market. "We see the yield on 10-year U.S. Treasuries fluctuating above 5%, or even higher." The Disruptive Market Truth: The Steep Yield Curve is a "Exclusive Benefit" for the Seven Giants of U.S. Stocks. Top Wall Street investment firm 22V Research stated that the overall steepening of the yield curve for U.S. Treasuries across various maturities is a strong tailwind for the "seven major tech giants" in the U.S. stock market. However, the firm indicated that if the steepening of the U.S. Treasury yield curve significantly slows down or shifts from steep to flat, the performance of the seven giants and other large tech stocks will also face downward adjustments. Therefore, in the view of the strategist team at 22V Research, a shift from the recent stagnation or flattening of the U.S. Treasury yield curve to a steepening trend may signal a new upward momentum for the "seven major tech giants," which account for a significant weight (30%-40%) in the S&P 500 and Nasdaq 100 indices.

For the First Time in History! U.S. ETF Assets Exceed $10 Trillion. According to the latest data from Cerulli Associates, the assets of U.S. exchange-traded funds (ETFs) surpassed $10 trillion for the first time in November. This month, ETF inflows reached $156 billion, setting a new record for monthly inflows. Cerulli pointed out that this level of activity is comparable to the trading peaks typically seen at the end of the year. Research from Morningstar indicates that this growth was driven by the "Trump bump," with U.S. funds (including ETFs and mutual funds) attracting $115 billion in inflows in November, the highest since April 2021.

Next Year, Major U.S. Banks Will Experience a "Harvest" Year, with Every Business "Blooming"? As the Federal Reserve is likely to slow its rate cuts next year, a steeper yield curve will continue to support banks' net interest margin earnings. A survey by Visible Alpha of analysts also showed that revenues across all sectors of the world's top banks (excluding FICC trading) are expected to see their first growth since 2021 next year. Additionally, as of early December, the yield on three-month U.S. Treasury bills fell below the yield on 10-year U.S. Treasuries for the first time since 2022, which may soon spark renewed enthusiasm for fixed-income products. Some analysts also indicated that Trump, who will take office next year, is expected to relax regulatory scrutiny on the financial sector, which could similarly benefit the banking industry.

Trump's Return to the White House May Bring New Variables, Bullish Bets on Oil Rise to Four-Month Highs. As investors prepare for Trump's return to the White House next year, bullish bets on oil have reached their highest point in four months. According to data from the U.S. Commodity Futures Trading Commission, in the week ending December 24, fund managers increased their net long positions in WTI crude oil by 21,694 contracts, reaching 182,895 contracts. During that week, the range of oil futures volatility was less than $3, indicating that the increase in long positions was due to changes in long-term holdings rather than short-term price reactions.

Individual Stock News

Tesla (TSLA.US) Shanghai Energy Storage Super Factory Begins Trial Production. Tesla's Shanghai energy storage super factory project has begun trial production, with official mass production expected to start in early next year It is reported that the factory successfully passed the completion acceptance on December 27, taking only 7 months from the start of construction in May to completion, setting a new record for "Tesla speed." After the factory goes into production, the output of the super-large energy storage battery Megapack will reach up to 10,000 units, with an energy storage capacity of nearly 40 gigawatt-hours (1 gigawatt-hour = 1000 megawatt-hours). In addition, Tesla will recall some domestically produced Model 3 and Model Y electric vehicles in China, totaling 77,650 units, and recall 63 imported Model S and Model X vehicles. Furthermore, Tesla will announce its fourth-quarter delivery data this Thursday. Analysts predict that the delivery volume will be approximately 510,000 units, slightly lower than the company's target of 515,000 units.

Apple (AAPL.US) streaming platform Apple TV will be available for free this weekend. Apple Inc. announced that its streaming service Apple TV will be offered for free from January 4 to January 5, 2025. Apple TV is part of the company's services division, which achieved a "record high" in revenue for the fourth fiscal quarter ending September 2024. Revenue from the services division grew approximately 11.9% year-on-year to $24.97 billion, but fell short of analysts' expectations of $25.27 billion. Its services division also includes the App Store, Apple Music, Apple Pay, iCloud, and Apple TV+.

Technical analysis reveals concerns about Nvidia (NVDA.US) stock price? The chart pattern is similar to the 60% drop before 2018. Financial analyst Paul Franke stated that from a technical analysis perspective, Nvidia may face a significant decline in the near future. The analyst believes that the company is also facing significant operational risks from cyclical semiconductor demand, potential Trump tariffs, and future competition, especially from Alphabet's newly launched AI-related Willow quantum chip.

Flagship product demand exceeds expectations, EHang Intelligent (EH.US) raises Q4 and full-year revenue forecasts. EHang Intelligent expects fourth-quarter revenue to reach 162 million yuan, a 20% increase compared to the guidance target of 135 million yuan, and a year-on-year increase of 187%. For the fiscal year 2024, the company expects total revenue to reach 454 million yuan, a 6% increase from the previous estimate of 427 million yuan, and a year-on-year increase of 287%. This rise in performance reflects stronger-than-expected market demand for EHang's flagship product, the EH216-S passenger-carrying drone, highlighting the company's growth momentum and marking a key operational milestone. The stock rose nearly 7% in pre-market trading.

Hong Kong steel structure contractor One Group (ONEG.US) goes public tonight, IPO priced at $4 per share. One Group Limited, based in Hong Kong, announced an initial public offering of 1.75 million shares at a price of $4 per share. Underwriters will have a 45-day option to purchase up to 15% of the total number of common shares. The company's common stock is expected to begin trading on the Nasdaq Capital Market on December 31, 2024

Important Economic Data and Event Forecast

At 05:30 Beijing time the next day, the U.S. API crude oil inventory change (10,000 barrels) for the week ending December 27, and the U.S. API gasoline inventory change (10,000 barrels) for the week ending December 27