Breakfast | Federal Reserve's December rate cut expectations heat up, three major U.S. stock indices rise for two consecutive days, with technology stocks leading the gains

Market Overview

Federal Reserve officials once again fueled expectations for a rate cut in December, with the three major U.S. stock indices rising for two consecutive days, reaching a one-week high. The S&P 500 rose nearly 1.6%, marking its largest increase in six weeks, the Nasdaq rose 2.7%, achieving its best performance in six months; Tesla rebounded nearly 7%, leading the tech giants, Google rose over 6%, reaching historic highs alongside Apple; the chip index rose 4.6%, with Broadcom surging 11%. The China concept index rose 2.8%, outperforming the market, with Baidu rising over 7% and Alibaba rising over 5%. Novo Nordisk's European stocks fell nearly 6%.

U.S. Treasury prices rose for two consecutive days, with the yield on the ten-year Treasury hitting a new low for the month. The dollar index fluctuated and temporarily retreated from a nearly six-month high; the offshore yuan briefly fell below 7.11%, but options pricing showed that traders' bullish sentiment towards the offshore yuan reached a fourteen-year high; cryptocurrencies continued their weekend rebound, with Bitcoin rising over 4% during the session, surpassing $89,000, and Ethereum rising nearly 9% at one point.

Oil prices fell at least 1% during the session before turning positive, reversing three consecutive declines, and closing up over 1% from a one-month low. Gold prices turned positive, rising over 1%, marking two consecutive days of gains and reaching a one-week high.

During the Asian session, the three major A-share indices saw reduced trading volume and closed higher, with Alibaba concept stocks soaring, the military industry sector exploding, and Hong Kong stocks opening high and rising, with the Hang Seng Tech Index up over 2%, and rebounds in the tech and new energy vehicle sectors.

Key News

Chinese President held a phone call with U.S. President Trump, pointing out that "cooperation benefits both, while conflict harms both" is a well-validated common sense, emphasizing that Taiwan's return to China is an important part of the post-war international order. The two heads of state also discussed the Ukraine crisis.

Japan will deploy offensive weapons on the southwestern islands near Taiwan, China's Ministry of Foreign Affairs responded: This move is extremely dangerous and requires high vigilance. China will never allow external forces to interfere in Taiwan, and is determined and capable of defending national territorial sovereignty.

China will launch a space exploration scientific satellite program to explore the origins of life in the universe.

Federal Reserve Chair candidate, Fed Governor Waller: mainly concerned about the labor market, advocates for a rate cut in December; San Francisco Fed President Daly, who has previously closely followed Powell, expressed concerns about a sudden deterioration in the labor market and supports a rate cut in December.

Trump signed an executive order to launch the "Genesis Project" for artificial intelligence.

Trump discussed the Russia-Ukraine negotiations: Good things may happen; Ukraine stated that the U.S. and Ukraine have finalized a new version of the peace draft, changing from 28 points to 19 points, with the new plan having little resemblance to the previous version, and sensitive parts awaiting decisions from the U.S. and Russian presidents; the Russian side stated that the European proposal is not constructive, while the U.S. proposal can, in principle, serve as a basis for a peace agreement.

"The first domestic GPU stock" Moore Threads started its subscription and was met with a frenzy, with an online winning rate of 0.02423369% and an offline subscription multiple of nearly 1600 times

The fastest-growing AI application is born: Alibaba's AI Assistant Qianwen App broke 10 million downloads in the first week of public testing, and Alibaba's Hong Kong stock surged over 6% at one point.

The "miracle drug" for weight loss dreams shattered, oral Ozempic trials for treating Alzheimer's disease declared a failure, and Novo Nordisk plummeted 12% during trading.

Seizing the holiday shopping season, OpenAI launched a free ChatGPT shopping search feature; Anthropic launched Claude Opus 4.5, with comprehensive improvements in programming performance, claiming to be the "most intelligent engineering model."

Amazon plans to invest up to $50 billion to expand AI computing power for the U.S. government, adding 1.3GW capacity, and will invest an additional $15 billion in Indiana to build a new data center campus.

Apple reportedly rarely laid off employees, streamlining dozens of positions in the sales department.

Dalio warns: the multi-manager hedge fund model "is hard to sustain for 50 years" and may struggle to become a long-term business; Dalio and the "bond king" rarely agree: price signals are distorted, and the market is deeply trapped in "false prosperity."

Market Closing Report

U.S. and European Stock Markets: The S&P 500 rose 1.55%, closing at 6705.12 points, the Dow Jones increased 0.44%, closing at 46448.27 points, and the Nasdaq rose 2.69%, closing at 22872.005 points. The European STOXX 600 index rose 0.14%, closing at 562.88 points.

A-shares: The Shanghai Composite Index rose 0.05%, closing at 3836.77 points, the Shenzhen Component Index rose 0.37%, closing at 12585.08 points, and the ChiNext Index rose 0.31%, closing at 2929.04 points.

Bond Market: By the end of the bond market, the yield on the U.S. ten-year benchmark Treasury bond was about 4.02%, down about 4 basis points during the day; the two-year U.S. Treasury yield was about 3.50%, down nearly 1 basis point during the day.

Commodities: WTI January crude oil futures rose 1.34%, closing at $58.84 per barrel; Brent January crude oil futures rose 1.29%, closing at $63.37 per barrel. COMEX December gold futures rose 0.36%, closing at $4094.2 per ounce. LME nickel futures rose about 1.7%, closing at $14699 per ton. LME copper futures fell 0.04%, closing at $10773 per ton.

Key News Details

Global Highlights

Chinese President speaks on the phone with U.S. President Trump According to CCTV News, Chinese leaders pointed out that the fact once again demonstrates that "cooperation benefits both China and the U.S., while conflict harms both" is a well-validated common sense; they elaborated on China's principled stance on the Taiwan issue, emphasizing that Taiwan's return to China is an important component of the post-war international order. Trump stated that China played a significant role in the victory of World War II, and the U.S. understands the importance of the Taiwan issue to China. The two heads of state also discussed the Ukraine crisis.

Japan will deploy offensive weapons on the southwestern islands near Taiwan; China's Ministry of Foreign Affairs responded: This move is extremely dangerous and requires heightened vigilance. Foreign Ministry spokesperson Mao Ning stated that this action deliberately creates regional tension and provokes military confrontation, linking it to Japanese Prime Minister Kishi Nobuo's erroneous remarks regarding Taiwan. China will never allow Japanese right-wing forces to reverse history, will never allow external forces to interfere in Taiwan and will never allow Japanese militarism to resurface. China is determined and capable of defending national territorial sovereignty.

China will launch a space exploration scientific satellite program to explore the origins of life in the universe. According to CCTV News, during the "14th Five-Year Plan" period, focusing on major frontier issues such as the origin of the universe, space weather, and the origin of life, the National Space Science Center of the Chinese Academy of Sciences will organize and implement a space exploration scientific satellite program that includes the "Hongmeng Plan," "Kua Fu No. 2," exoplanet surveys, and an enhanced X-ray time-variable and polarized space observatory, striving to achieve breakthroughs in fields such as the cosmic dark age, solar magnetic activity cycles, and exoplanet detection.

Federal Reserve Chair frontrunner and Fed Governor Waller: Main concern is the labor market, advocates for a rate cut in December. Waller pointed out that the latest data shows the labor market remains weak, but he also mentioned that the delayed economic reports to be released after the December meeting may make the January decision "more complicated."

• Formerly closely aligned with Powell, San Francisco Fed President Daly**: Concerned about a sudden deterioration in the labor market,supports a rate cut in December. Daly warned that the U.S. labor market faces risks of nonlinear changes, believing that the risk of inflation surging is relatively low, as this year's tariff-driven cost increases have been milder than expected. Daly does not have a vote at this year's FOMC meetings, but "New Fed Communications" Timiraos noted that Daly's views are significant because she rarely deviates from Fed Chair Powell's stance in public.

Trump signed an executive order to launch the Artificial Intelligence "Genesis Plan." The plan aims to leverage artificial intelligence (AI) to transform the way scientific research is conducted and accelerate scientific discoveries through a new national initiative The command instructs the Department of Energy to create an artificial intelligence experimental platform that integrates America's supercomputers and unique data assets to generate scientific foundational models and support robotic laboratories.

Trump talks about Russia-Ukraine negotiations: Good things may happen, Ukraine says the US and Ukraine have finalized a new peace draft, from 28 points to 19 points. Media reports that the US and Ukraine have completed a new draft of a 19-point peace agreement, but the most sensitive issues such as territorial arrangements, Ukraine's relationship with NATO, and US-Russia relations remain to be decided by Trump and Zelensky. Ukraine's First Deputy Foreign Minister stated that the new draft bears "almost no resemblance" to the previously leaked version that sparked strong protests in Ukraine.

• Several European countries have warned that a quick agreement cannot be reached in the short term. The Russian side stated that a certain proposal put forward by the US "can, in principle, serve as the basis for a final peace agreement." The Russian side is aware of the European peace proposals to end the Ukraine crisis, but these proposals are not constructive for Russia and do not align with its interests.

"The first domestic GPU stock" Moore Threads' subscription launch is met with a frenzy, with an online winning rate of 0.02423369% and an offline subscription multiple of nearly 1600 times. Moore Threads' issuance price of 114.28 yuan sets a new high for A-shares in 2025. The offline subscription was wildly sought after by institutions, with a subscription multiple reaching 1572 times and participation from 267 institutions; the online winning rate was only 0.02423369%. The company raised approximately 8 billion yuan, becoming the largest IPO on the Sci-Tech Innovation Board this year, with a valuation price-to-sales ratio of 122 times, far exceeding overseas giants like NVIDIA. The company's revenue in 2024 is projected to be 438 million yuan, with a net loss of 1.618 billion yuan, and it is expected to turn a profit by 2027.

The fastest-growing AI application is born: Alibaba's AI assistant Qianwen App downloads over 10 million in the first week of public testing. Since its launch on November 17, Qianwen App has been in high demand, breaking into the top three of the Apple App Store's free overall chart just two days after its launch. From foundational model competition to the super application battlefield, Alibaba has secured the first "ticket" in the AI Agent era. Analysts believe that in the future, Alibaba may establish a C-end profit loop through subscription models, traffic entry, and other business models, driving AI services to reach and convert end users more broadly through model + scenario.

• Alibaba's Hong Kong stock once surged over 6%. Does the explosive growth of Qianwen App open up new valuation space for Alibaba? The explosive growth of Qianwen App is seen by analysts as a core variable driving stock price surges and reshaping the company's valuation, "the market also views this move as a key step in benchmarking its valuation against OpenAI." "Weight Loss Miracle Drug" Cross-Border Dream Shattered! Oral Ozempic's Alzheimer's Treatment Trial Declared a Failure, Novo Nordisk's Stock Plummets 12% During Trading. Novo Nordisk announced that its oral version of Ozempic failed to slow the progression of Alzheimer's disease in two large clinical trials, marking a failed attempt viewed as a long-term investment. Based on cognitive assessment results, patients taking the drug did not show significant improvement. The company has decided to terminate the planned one-year study extension.

Seizing the Holiday Shopping Season, OpenAI Launches Free ChatGPT Shopping Search Function. OpenAI has released a shopping search function optimized based on the GPT-5-Thinking-mini model, collecting user needs through a Q&A format and recommending 10-15 products. All users can use it almost unlimitedly for free before the holidays. This function excels in subcategories like electronics and beauty products but may make errors in details such as pricing and inventory.

• For the third time in two months, Anthropic Launches Claude Opus 4.5, Significantly Enhancing Programming Performance. Anthropic released its flagship model Claude Opus 4.5 on Monday, significantly enhancing automated programming, multi-step task execution, and office document generation, and it will become the default model across all products. The new model outperformed Google Gemini 3 Pro and OpenAI GPT-5.1 in programming evaluations like SWE-Bench, being referred to by the company as "the smartest engineering model."

Amazon to Invest Up to $50 Billion to Expand AI Computing Power for the U.S. Government, Adding 1.3GW Capacity. Amazon's project will begin construction in 2026. The project will add nearly 1.3 gigawatts (GW) of computing power in the AWS Top Secret, Secret, and GovCloud regions, providing federal agencies with a full suite of AI services including SageMaker, Bedrock, Nova, and Anthropic Claude. Amazon also announced plans to invest approximately $15 billion in northern Indiana, USA, to build new data center campuses.

Apple Reportedly Rarely Lays Off Employees, Streamlining Dozens of Positions in Sales Department. Reports indicate that affected employees include account managers serving large enterprises, schools, and government agencies, as well as staff responsible for operating Apple's demonstration centers. It is reported that management notified the affected employees in the past few weeks Some affected employees stated that this move aims to shift more sales to third-party distributors, helping Apple reduce internal costs.

Dalio warns: Multi-manager hedge fund model "hard to last 50 years," may struggle to become a long-term business. Bridgewater founder Dalio believes that the multi-strategy hedge fund model sweeping Wall Street may struggle to survive in the long term. He pointed out that this model relies on many small teams executing different strategies separately, and this "segregated" approach makes it difficult for employees to build deep relationships, which in turn affects employee stability and competitiveness.

• Dalio and "bond king" rare agreement: price signals distorted, market deeply trapped in "false prosperity". "Bond king" Gundlach pointed out that investors are playing a "greater fool game," making decisions based on stories rather than logic. Bridgewater's Dalio emphasized that debt-driven asset prices are severely detached from their true value, and debts must eventually be repaid, which will depress prices and may trigger an economic collapse. The two investment giants rarely agree on the recommendation to hold physical gold as a defense.

"Plummeting" cryptocurrency "conspiracy theories abound": U.S. government "robbing money," Wall Street "shorting," even "JP Morgan battles Trump". Conspiracy theories have spread: some claim the U.S. government is creating a crash to buy at low prices, while others interpret this as a power struggle between the "old financial order" represented by JP Morgan and the "Bitcoin new system" supported by the Trump administration.

• JP Morgan research warns MSTR being "removed" from index "unexpectedly caught in the crossfire," crypto community calls for "boycott". JP Morgan's research warns that if MicroStrategy is ultimately removed, it could trigger a forced sell-off of up to $2.8 billion.
• Bitcoin ETF faces "darkest hour": $3.5 billion outflow in a single month, worst performance since listing.

Domestic Macro

National Energy Administration: From January to October, photovoltaic power generation installed capacity increased by 43.8% year-on-year, continuing the warming trend. As of the end of October, the national solar power generation installed capacity reached 1.14 billion kilowatts, a year-on-year increase of 43.8%. In October, new photovoltaic installations reached 12.6GW, a month-on-month increase of 30.4%, continuing the warming trend since September and recovering from the nearly three-year low in August. This year, due to policy adjustments and demand being brought forward, the traditional peak construction season in the fourth quarter has been disrupted, and the industry is gradually returning to a normal pace The Central Air Traffic Control Office strengthens the standardization of low-altitude management system construction. Xinhua News Agency learned that the Central Air Traffic Control Office recently formulated and issued the "Functional Requirements for National and Provincial/City-Level Low-Altitude Flight Comprehensive Supervision and Service Platform (Version 1.0)" and "Information Interaction Specifications for National and Provincial/City-Level Low-Altitude Flight Comprehensive Supervision and Service Platform (Version 1.0)." The Central Air Traffic Control Office will unify the interface of airspace management, flight information, flight services, and other modules, standardize the functional requirements for flight declarations, alarms, and coordinated responses, and comprehensively strengthen the dynamic supervision and service of low-altitude flight activities nationwide.

Shanghai: Support for eligible innovative drug clinical trial review and approval time shortened to 30 working days. Shanghai issued "Several Measures to Deepen the Reform of Drug and Medical Device Supervision and Promote the High-Quality Development of the Pharmaceutical Industry." It mentioned encouraging medical institutions, research and development units, and pharmaceutical companies to jointly create a platform for the innovation and industrial transformation of traditional Chinese medicine, and encouraging the cultivation of major varieties of traditional Chinese medicine and the secondary development of classic varieties.

Domestic Companies/Markets

JP Morgan significantly raises Baidu's target price: the market severely underestimates the speed of AI transformation, Kunlun chip sales may soar 6 times next year, driving cloud business growth of 61%. JP Morgan believes that Baidu's investment narrative is undergoing a fundamental shift: the company is transforming from a traditional search advertising company to an AI infrastructure provider, and it is expected that Kunlun chip sales and GPU computing demand will significantly boost revenue growth. However, JP Morgan is relatively cautious about Baidu's advertising business prospects, emphasizing that the catalysts for the upward adjustment will come from cloud/AI infrastructure growth rather than a rebound in traditional advertising business.

Lei Jun invests over HKD 100 million to increase his stake in Xiaomi, previously posting multiple Weibo updates. Lei Jun personally invested over HKD 100 million to increase his stake in Xiaomi Group by 2.6 million shares, with an average price of about HKD 38.58 per share, raising his shareholding ratio to 23.26%. This month, Xiaomi Group has repurchased a total of 21.5 million shares of the company on the 20th and 21st, with a total investment amount exceeding HKD 800 million.

WeRide: Third quarter autonomous taxi Robotaxi revenue increased by 761.0% year-on-year. WeRide announced that its total revenue in the third quarter of this year was 171 million yuan, a year-on-year increase of 144.3%, with a gross profit of 56.3 million yuan, a year-on-year increase of 1,123.9%, and a gross profit margin of 32.9%. The proportion of autonomous taxi revenue in total revenue increased from 5.8% a year ago to 20.7%.

In November, the first three joint-stock banks' AIC were approved to open. China Merchants Bank, Industrial Bank, and CITIC Bank's AIC companies have opened The wave of autonomous driving companies going public in Hong Kong continues, TianTong Vision aims to break through with L4. Some shareholders are exiting ahead of the IPO.

After a year of stalled IPO, Syngenta reportedly considers a Hong Kong listing as early as next year. Media reports indicate that agricultural technology giant Syngenta Group is currently in preliminary discussions with financial advisors and may adjust its asset structure, including disposing of some non-core and unprofitable assets to optimize valuation.

Overseas Macro

Goldman Sachs: December Fed rate cut is "imminent," with cuts expected in March and June next year. Goldman Sachs' report suggests that since the next employment report and CPI data will be released after the December FOMC meeting, there are virtually no obstacles to a rate cut in the current schedule. The report predicts one rate cut each in March and June next year, based on core PCE inflation nearing the 2% policy target and concerns about rising unemployment rates among college graduates, indicating that economic downside risks are accelerating.

Wall Street is guessing: Will the Fed delay the December FOMC meeting to wait for more employment data? The December FOMC meeting will be held before the key employment reports for October and November are released. UBS points out that this has led the market to discuss the possibility that the Fed may postpone the originally scheduled meeting on December 10 by a week to gather key employment data before making a decision. There have been precedents for meeting delays in the past, and the internal divisions within the Fed regarding a rate cut in December have heightened the importance of the timing of the meeting.

"The market craves a December rate cut," says a Goldman Sachs trader: sentiment is low, but many clients believe "if Bitcoin stops falling, U.S. stocks will still have a rally by year-end". Goldman Sachs states that several technical indicators show the market is in a dangerous zone, calling for the Fed to cut rates in December. However, some positive factors are emerging, suggesting that concerns about economic growth may be overstated, and liquidity conditions are expected to improve... Many of Goldman Sachs' clients view high-beta assets like Bitcoin as risk appetite indicators, believing that if Bitcoin's performance improves, a year-end rebound may restart.

The Fed is "obsessed" with AI, but dares not take another "Greenspan-style gamble". During the internet boom of the 1990s, then-Fed Chairman Greenspan believed that innovation could promote faster economic growth without triggering inflation, and maintained low interest rates for this reason. However, the current impact of artificial intelligence on the economy remains unclear; while there are signs of productivity improvement, the loss of white-collar jobs could lead to serious unemployment and social issues

• Illusion of Prosperity? Wall Street Warns: The U.S. Economy is Overly Tied to AI, a Slowdown in Investment Could Trigger a Recession. AI investments contributed nearly half of GDP growth in the first half of the year, with capital expenditures from the four major tech giants, including Microsoft and Google, reaching 1.1% of GDP. Analysts point out that without the AI boom, the economy might have already fallen into recession. A sharp decline in AI stock prices or a slowdown in investment could trigger a recession through a reverse wealth effect, with a 20-30% drop in the stock market potentially reducing GDP growth by 1-1.5 percentage points.
• Massive "AI Bonds" Stir Global Markets. Since early September, tech giants like Amazon, Alphabet, Meta, and Oracle have issued nearly $90 billion in investment-grade bonds to invest in AI, surpassing the total from the previous 40 months. This unprecedented supply surge is impacting the bond market, leading to a drop in new bond prices and rising yields. Market pressures have also transmitted to the stock market, intensifying concerns over high valuations.

Processing Fees Hit Historical Lows, Overseas Smelters Under Pressure, 2026 Copper Concentrate Long-term Contract Negotiations Begin Harsh Game. Global copper processing fees have fallen below $20 per ton, reaching a ten-year low, prompting a restructuring of the annual benchmark pricing system. In the 2026 long-term contract negotiations, miners and smelters are engaged in a game over new pricing models, while overseas smelters, such as those in Japan, are responding to operational pressures through coordinated production cuts. Chinese smelting companies, on the other hand, are maintaining stable procurement due to their advantages in the supply chain.

Musk's "Sadness"! Reports: The Agreement is Eight Months Away, but DOGE "No Longer Exists". The U.S. "Department of Government Efficiency" (DOGE), once led by Musk, has been confirmed to have been dissolved eight months early. A senior official stated that the agency "no longer exists," marking a significant setback for a key reform promise of the Trump administration. This move ends the federal government's hiring freeze and has sparked political commentary that "the swamp (bureaucracy) has won."

Overseas Companies

The Return of the King of Storage? Morgan Stanley: Samsung's HBM Business Has Fully Surpassed Competitors, Profits May Surge 150% by 2026. Morgan Stanley believes that Samsung's HBM4 products are undergoing multiple qualification certification tests, with the first results expected to be announced in early December. The company currently has an effective DRAM capacity of 500,000 wafers, far exceeding its competitors. The company is expected to regain dominance in the storage market. The market is unprepared for Samsung's specific positive developments, and the transition from relative profit corrections to a technological leadership position (HBM4) could serve as a catalyst for stock prices Morgan Stanley: Except for reducers, all robot hardware can be self-developed — core barriers are shifting to software and data. Morgan Stanley believes that the core barriers in the robotics industry are shifting from hardware manufacturing to software algorithms and data accumulation. Most robot hardware can now be self-developed by integrators, except for reducers, which weakens the bargaining power of ordinary hardware manufacturers. This profound change may make a company's software capabilities, data capabilities, and commercialization efficiency more important.

Acquisition ambitions thwarted: BHP formally exits the Anglo American acquisition battle after being rejected for the second time. The world's largest mining company, BHP, has officially abandoned its bid to acquire rival Anglo American, marking the end of its brief "last-ditch effort." The Anglo American board rejected BHP's latest proposal and insisted on its merger plan with Teck Resources. The core of this acquisition battle lies in the competition for high-quality copper mine assets, reflecting the mining giants' strong desire for key raw materials in the energy transition.

Today's News Preview

Huawei's new product launch event will unveil the Mate80 series, and a new Kirin chip may be showcased.

Alibaba, Nio, and Pony.ai financial reports.

The U.S. Department of Labor will release the September PPI.

"Big Short" Michael Burry previously stated that tech giants "underestimating depreciation leads to inflated profits" and will disclose more details on November 25