Breakfast | NVIDIA's target price has been lowered! U.S. stocks "return to pre-election overnight," what comes next?

Market Overview Last Friday

The much stronger-than-expected U.S. employment data reinforced expectations that the Federal Reserve will not significantly cut interest rates, with Bank of America predicting the end of rate cuts.

The Dow Jones fell 700 points, nearing a reversal of gains made after the U.S. elections, while small-cap indices consolidated, with major U.S. stock indices dropping about 2% for the week. Chip and Chinese concept indices saw the deepest declines of over 3%, with NVIDIA and Tesla briefly falling over 4%.

Key Focus This Week

China will release several key data points, including December import and export figures, economic data, financial data, and annual GDP situation; local two sessions will be held intensively, with provincial government work reports to be disclosed successively; U.S. CPI and PPI inflation data will be monitored for their impact on Federal Reserve rate cuts.

Additionally, JPMorgan Chase, Citigroup, and Goldman Sachs will kick off the U.S. earnings season, and TSMC will also release its earnings report. SpaceX's "Starship" program will conduct its seventh test flight, and the U.S. Supreme Court will announce the debate results on the TikTok ban case.

What Does the PBOC's Phase Pause on Open Market Bond Purchases Mean?

CICC believes that the central bank's pause on government bond trading is due to concerns about potential risks in current market pricing. Future cuts in reserve requirement ratios and interest rates will continue, but the pace may depend on multiple factors. On one hand, there is a need to lower nominal interest rates, but on the other hand, inflation expectations must be raised. Given the still weak private credit demand, boosting demand and prices largely depends on the strength and pace of fiscal expansion.

The Analyst Who Knows Apple Best: Apple Will Face More Severe Challenges This Year

Ming-Chi Kuo's industry research indicates that Apple will face more severe challenges in 2025, including nearly stagnant iPhone growth, AI services not yet contributing, and continued shrinkage of its business in China. The market has been overly optimistic, and there is a risk of stock price decline.

HSBC Lowers NVIDIA's Target Price: GB200 Supply Chain Issues Will Extend into the First Half, Affecting Performance

HSBC expects limited "better-than-expected" growth potential for NVIDIA in the first half, leading to greater pressure in the second half. However, considering the strong demand for its GPUs, and if it can launch more powerful GB300/B300, there is potential for better-than-expected performance in the second half.

Jensen Huang: This is the First Time, Key Technologies for General Humanoid Robots Are "Within Reach"

In a recent interview, Jensen Huang stated that the technology for general humanoid robots is "difficult to achieve," but with breakthroughs in large language models and foundational models, the necessary technology is "within reach." In the future, the application of AI science will become particularly important. The challenge for the new generation is how to use AI technology to solve real problems and create value.

Will the Biden Administration Issue New "China Containment" Regulations Before Leaving Office? Foreign Media Reports: The U.S. Will Finalize Rules on Software and Hardware Restrictions for Chinese Cars This Week

According to Global Times, as early as last September, the U.S. Department of Commerce issued proposed rules stating that based on national security considerations, it would prohibit the use of key software and hardware made in China in cars on U.S. roads. This measure will effectively block Chinese cars and trucks from entering the U.S. market, while requiring major international automakers to remove relevant Chinese components from vehicles sold in the U.S. in the future

U.S. Non-Farm Payrolls in December Exceed Expectations, 256,000 Jobs Created, Highest in Nine Months, Unemployment Rate Drops to 4.1%

The data supports the Federal Reserve's decision to "stay put" in January, with traders fully digesting the adjustment of the Fed's next rate cut to October. Wall Street's major banks have lowered their rate cut expectations, with Bank of America stating that the rate cut cycle has ended. The "New Federal Reserve News Agency" reports that the employment report has closed the door on a rate cut in January, and Fed officials believe they can wait before taking further action.

On the Eve of a Major Drop, David Einhorn, Who Rose to Fame During the Lehman Crisis, Says U.S. Stock Market Structure is Collapsing

David Einhorn stated that the rise of passive investing and investors placing more emphasis on price rather than value has led to overvalued stocks becoming even more overvalued and undervalued stocks becoming even more undervalued. This phenomenon distorts market value and buries significant risk.

Will There Be a Major Reversal? Two Major Wall Street Investment Banks Target "Late January to February"

Bank of America believes that the decline in U.S. stocks will force the Trump administration to make concessions on tariffs, and that February or March will be a good time to start buying U.S. Treasuries and stocks in China, the UK, and emerging markets. JPMorgan Chase stated that as Trump's policies towards China and China's responses become clearer, the Chinese stock market is expected to see a reversal around late January.

U.S. Stocks "Return to Pre-Election Levels" Overnight, What Comes Next?

Some analysts are concerned that U.S. Treasury yields may continue to soar. On the other hand, U.S. inflation exceeding expectations may lead the Federal Reserve to pause rate cuts or even raise rates, further impacting the U.S. stock market.

CICC: The Widening China-U.S. Interest Rate Spread Increases Pressure on Hong Kong Stocks

CICC stated that the recent widening of the China-U.S. interest rate spread has increased market pressure, especially as the downward trend in Chinese bond yields often puts pressure on the market, accompanied by a weakening currency and capital outflows. This reflects more of the results of macroeconomic and policy factors. It is advisable to be more proactive during downturns and to take profits moderately during exuberance