Breakfast | Concerns arise from hawkish comments by the Bank of Japan, S&P ends five-day winning streak

Market Overview

The hawkish remarks from the Bank of Japan have raised concerns about global liquidity tightening. Investors are digesting the weak US ISM Manufacturing PMI. Cryptocurrencies are being sold off, hitting market risk appetite, leading to a decline in US stocks. The sharp drop in Japanese government bonds has also affected the global bond market.

US stocks started poorly in December, ending the S&P's five-day winning streak, as investors avoided higher-risk US stock sectors. Nvidia invested in EDA giant Synopsys, with Nvidia rising 1.7% and Synopsys up 4.9%. The China concept stock index rose nearly 1% against the trend, with Alibaba up 4.4%.

US long-term bonds generally faced setbacks, with the yields on 10-year and 20-year US Treasuries both rising over 7 basis points.

The yen appreciated nearly 1% at one point, then narrowed to 0.46%. The dollar briefly fell below 99, then rebounded 0.4% from its daily low. Bitcoin once plummeted over 8%, dropping below $84,000. Ethereum fell over 10% during the session.

Gold rose 0.3%. Silver hit a new historical high, rising 2.67% to $58. London cobalt surpassed $50,000.

During the Asian session, AH shares opened high and rose, with the Shanghai Composite Index returning to 3,900 points, and the ChiNext and Shenzhen Composite Index rising over 1%, led by silver and non-ferrous metals, while consumer electronics surged.

Key News

China's November RatingDog Manufacturing PMI is 49.9, with new export orders recording the fastest growth in eight months.

Vanke has a preliminary plan to extend 2 billion yuan of domestic bonds: the principal and interest repayment is proposed to be extended by one year, with the coupon rate remaining unchanged.

Trump stated that he "has decided on the new Federal Reserve Chairman candidate," and Hassett noted that "the market's reaction to the new chairman news is very, very positive."

The US November ISM Manufacturing PMI shrank at the largest rate in four months, with employment further contracting and prices rising.

The Governor of the Bank of Japan strongly hinted at a rate hike in December, hoping to raise rates to 0.75% before discussing future moves, leading to a double hit on Japanese stocks and bonds.

A series of negative news followed, with a cryptocurrency sell-off resurgence, nearly $1 billion in leveraged positions being liquidated, and the spot Bitcoin ETF seeing only a slight net inflow last week.

DeepSeek released the V3.2 series model, enhancing Agent capabilities, with reasoning abilities catching up to GPT-5.

Directly embedded in mobile systems! Doubao AI phone helps you compare prices across platforms for takeout and automatically reply to messages.

Nvidia invested $2 billion in EDA giant Synopsys, with Jensen Huang praising it as a "huge expansion opportunity" and denying a closed-loop transaction similar to OpenAI.

Masayoshi Son stated he "cried" while liquidating his holdings in Nvidia: if not for the need for funds, he wouldn't have sold a single share.

AI closed-loop trading has sparked controversy again: OpenAI invested in Thrive Holdings, possibly aiming for more private equity

Morgan Stanley significantly raised its forecast for Google TPU production: expected to reach 5 million units by 2027, with every 500,000 units "exported" potentially generating an additional $13 billion.

Electric vehicles November performance report: Hongmeng Zhixing breaks through 80,000 units, Xiaomi surpasses 40,000 units again, Li Auto i6 and i8 cumulative orders have exceeded 100,000 units. Tesla's registration in France, Sweden, and Denmark nearly halved in November, while Norway surged by 175%.

Market Report

US and European Stock Markets: The S&P 500 fell by 0.53%, closing at 6812.63 points. The Dow Jones Industrial Average fell by 0.90%, closing at 47289.33 points. The Nasdaq fell by 0.38%, closing at 23275.922 points. The European STOXX 600 index closed down 0.20%, at 575.27 points.

A-shares: The Shanghai Composite Index closed at 3914.01 points, up 0.65%. The Shenzhen Component Index closed at 13146.72 points, up 1.25%. The ChiNext Index closed at 3092.50 points, up 1.31%.

Bond Market: The yield on the 10-year U.S. Treasury rose by 7.71 basis points, at 4.0903%. The yield on the 2-year U.S. Treasury rose by 4.52 basis points, at 3.5345%.

Commodities: COMEX gold futures rose by 0.30%, at $4267.60 per ounce. COMEX silver futures rose by 2.27%, at $68.460 per ounce. WTI January crude oil futures closed up 1.31%, at $59.32 per barrel. Brent February crude oil futures closed up 1.26%, at $63.17 per barrel.

News Details

Global Highlights

China's November RatingDog manufacturing PMI at 49.9, new export orders recorded the fastest growth in 8 months. The November RatingDog China manufacturing PMI shifted from expansion to contraction, but new export orders recorded the fastest growth in 8 months. Comments suggest that there may be a phase of supply and demand side momentum at the end of the year, and the December PMI is expected to show weak expansion.

• Guolian Minsheng Macro's Zhong Yumei believes that although the PMI production index successfully climbed to the level of the boom-bust line, the improvement on the demand side is "more significant" — the November PMI new orders index increased in line with seasonal trends, while the PMI production index showed weaker performance This differentiation confirms that the "anti-involution" policy is promoting an orderly adjustment on the supply side, objectively creating conditions for the future supply-demand pattern to return to balance.

Vanke's preliminary plan for the extension of 2 billion yuan domestic bonds: principal and interest repayment is proposed to be extended for one year, with the coupon rate remaining unchanged. According to The Paper, the official website of the China Interbank Market Dealers Association shows that Shanghai Pudong Development Bank, as the meeting convener, issued an announcement to steadily advance the repayment of principal and interest for the 220,000 Vanke MTN004 bonds, proposing to hold the first bondholder meeting for Vanke Enterprise Co., Ltd.'s 2022 fourth phase medium-term notes on December 10 to review matters related to the extension of this bond. The original repayment date for the principal of the 220,000 Vanke MTN004 bonds was December 15, 2025, with a remaining bond balance of 2 billion yuan.

Trump says "has decided on the new Federal Reserve chairman candidate," Hassett says "the market's reaction to the new chairman news is very, very positive". Trump stated on Sunday: "I know who I'm going to choose, yes. We will announce this decision." Meanwhile, Hassett emphasized the market's positive reaction to Trump's upcoming announcement in a media interview, stating that the performance of U.S. Treasury auctions is strong and interest rates are falling, indicating that "the American public can expect Trump to select someone who can help them get cheaper auto loans and lower-rate mortgages."

U.S. November ISM Manufacturing PMI shrinks at the largest rate in four months, employment further contracts, prices rise. The U.S. November ISM Manufacturing PMI index is 48.2, below the expected 49, and the previous value was 48.7. This index has been below the neutral line of 50 for nine consecutive months, indicating ongoing contraction in the manufacturing sector. New orders in November contracted at the fastest pace since July, and the weak demand situation also explains the larger contraction in factory employment in November. The raw material payment price index rebounded for the first time after five months of decline, and the production index expanded at the fastest pace in four months.

Bank of Japan Governor strongly hints at a rate hike in December, hopes to raise rates to 0.75% before discussing future; Japanese stocks and bonds suffer! Kazuo Ueda clearly stated that he will "consider raising interest rates" at the December meeting and "make the right decision." He emphasized that if the economic outlook improves, a rate hike will be considered, hoping to raise rates to 0.75% before further elaborating on the future rate hike path, with the upcoming spring wage negotiations being a key decision point. However, he also stressed that even with a rate hike, the financial environment will remain accommodative.

Cryptocurrency continues to decline, nearly $1 billion in leveraged positions liquidated, with only a slight net inflow into spot Bitcoin ETFs last week On Monday, cryptocurrency prices fell sharply again, triggering nearly $1 billion in leveraged positions to be liquidated amid a new round of accelerated declines, bringing new momentum to a widespread sell-off. The US spot Bitcoin ETF recorded only about $70 million in net inflows last week, while it has seen a cumulative outflow of about $4.6 billion over the past month; the pressure mainly comes from IBIT, where investors have withdrawn funds for five consecutive weeks, marking the longest continuous outflow period since the fund's establishment in January 2024.

• A series of negative factors emerge, and the crypto sell-off returns! The cryptocurrency market faced a heavy setback on Monday, with Bitcoin dropping below $84,000 during trading and Ethereum falling over 10%. The main reasons for the decline are macro concerns over tightening global liquidity (such as expectations of interest rate hikes by the Bank of Japan) and a series of negative factors within the industry. Investors are avoiding risks, and the market is worried about breaking below the support level of $80,000.

DeepSeek releases V3.2 series models, enhancing Agent capabilities, reasoning ability matches GPT-5. DeepSeek has released two models from the V3.2 series and made them open source. The V3.2 model focuses on daily applications, with reasoning capabilities reaching GPT-5 levels, achieving the first integration of thinking modes and tool usage; V3.2-Speciale focuses on extreme reasoning, winning gold medals in four international competitions: IMO, CMO, ICPC, and IOI. Both models are now open-sourced on HuggingFace and ModelScope, marking a further narrowing of the performance gap between open-source models and closed-source commercial models, with open-source reaching top-tier levels.

• “Punching GPT-5,” “kicking Gemini-3.0,” why has DeepSeek V3.2 improved so much? V3.2 has reached the highest level of tool usage capabilities among current open-source models, significantly narrowing the gap between open-source and closed-source models. As DeepSeek's first model to integrate thinking into tool usage, V3.2 still supports tool usage under the "thinking mode." The company constructed over 1,800 environments and more than 85,000 complex instruction reinforcement learning tasks through a large-scale Agent training data synthesis method, greatly enhancing the model's performance in agent evaluations.

Directly embedded in mobile systems! Doubao AI phone, helps you cross-platform compare prices for takeout and automatically reply to messages. ByteDance has released a technical preview of the Doubao phone assistant, embedded in ZTE's mobile system. Tests show that this AI possesses astonishing "agent" capabilities, simulating manual cross-App operations to achieve complex instructions such as "automatically order takeout after price comparison across the internet" and "reply to WeChat based on screen content." In addition to being equipped with dedicated physical buttons, its core logic may trigger industry upheaval: it demotes Meituan, Taobao, and others to being called upon as underlying services, putting other apps at risk of being sidelined

• From Quark Glasses to Doubao Phones, Why Are Giants Flocking to Edge AI? By 2026, the AI penetration rates for mobile phones and PCs are expected to reach 45% and 62%, respectively. The market size for edge AI is projected to leap from CNY 321.9 billion in 2025 to CNY 1.22 trillion in 2029, with a compound annual growth rate of 40%. The triple resonance of policy support, technological breakthroughs, and market demand is opening a golden window period for the development of the edge AI industry.

NVIDIA Invests $2 Billion in EDA Giant Synopsys, Jensen Huang Praises "Huge Expansion Opportunities," Denies Similar OpenAI Transaction Closure. NVIDIA will hold a 2.6% stake in Synopsys, becoming the seventh-largest shareholder. Jensen Huang stated that the collaboration with Synopsys is not an exclusive agreement and does not involve terms for purchasing NVIDIA chips, "it's more like a technology upgrade." The partnership will expand NVIDIA's technology coverage to a trillion-dollar industrial sector, "this is a huge opportunity for us to expand into design and engineering fields," far exceeding the market space for consumer-side AI applications. Synopsys' stock rose nearly 7% during trading, while NVIDIA initially fell nearly 2% before turning positive.

Masayoshi Son Claims He "Cried" While Liquidating NVIDIA: If not for the need for funds, he wouldn't have sold a single share.

AI Closed-Loop Transactions Spark Controversy Again: OpenAI Invests in Thrive Holdings, Aiming for More Private Equity. OpenAI will acquire equity in Thrive Holdings, a subsidiary of its investor Thrive Capital, without needing to make a cash investment, instead exchanging "meaningful" equity for providing technical support and team resources. OpenAI will receive compensation from Thrive Holdings' future financial returns while obtaining data from its acquired companies to train AI models.

Morgan Stanley Significantly Raises Google TPU Production Forecast: Expected to Reach 5 Million Units by 2027, Every 500,000 Units "Exported" Could Generate an Additional $13 Billion. Morgan Stanley predicts that Google TPU production will reach 5 million and 7 million units in 2027 and 2028, respectively, an increase of 67% and 120% from previous expectations. This surge in production may indicate that Google will begin direct sales of TPU chips. More strikingly, the report estimates that every 500,000 TPUs exported could bring Google an additional $13 billion in revenue and $0.40 in earnings per share Electric Vehicle November Report: Hongmeng Zhixing breaks 80,000 units, Xiaomi exceeds 40,000 units, Li Auto's i6 and i8 cumulative orders exceed 100,000 units. BYD leads with 480,200 units of new energy vehicle sales in November, Hongmeng Zhixing leads with over 80,000 units, while ZEEKR and Leapmotor delivered over 60,000 and 70,000 units respectively. Xiaomi exceeded 40,000 units again and launched immediate vehicle selection. Nio's multi-brand strategy delivered 36,000 units, a year-on-year increase of 76.3%. Li Auto delivered 33,000 units, with new models i6 and i8 orders surpassing 100,000. IM Motors achieved over 10,000 deliveries for three consecutive months.

Tesla Faces Pressure in European Market: November registrations in France, Sweden, and Denmark nearly halved, while Norway surged by 175%. Tesla's sales in several European countries plummeted in November, with registrations in France, Sweden, and Denmark dropping by 58%, 59%, and 49% respectively, while Norway saw a counter-trend surge of 175%. The updated Model Y failed to reverse the decline, and the aging product line has led to decreased competitiveness. Surveys show that 38% of consumers believe Tesla's brand freshness has diminished, falling behind competitors in design and quality.

Domestic Companies

Is there a misunderstanding in the market? Morgan Stanley: In past memory price increase cycles, Xiaomi's profit margins "actually improved" significantly. Morgan Stanley overturned the market's general perception by reviewing the cycles of "2016-17, 2019-21, and 2022-23," clearly showing that "when DRAM prices exhibit an upward trend, Xiaomi's smartphone gross margins actually improved. The three key logical reasons for this divergence are the cost transfer ability of smartphone manufacturers, the time lag benefits of the price increase cycle, and Xiaomi's high-end moat. Morgan Stanley also reminded that the duration of the price increase cycle will determine different outcomes.

Monthly production of 50 million units! When Labubu is no longer scarce, what will Pop Mart rely on? Deutsche Bank warned that Pop Mart is facing the "Availability Paradox." With production capacity aggressively expanding to a monthly output of 50 million by the end of the year, Labubu is rapidly transforming from a scarce trendy IP into a mass consumer product. For trendy toys that rely on "cool" and "scarcity," such widespread availability often signals a decline in popularity. If Labubu's popularity peaks in 2026 without new hits to follow (bear market scenario), Pop Mart's valuation pressure will increase sharply.

Morgan Stanley: Humanoid robots are "overheated in the short term, undervalued in the long term," with commercialization being the key to victory or defeat. Morgan Stanley believes that although orders in the Chinese market will exceed 2 billion yuan in the second half of 2025, there is uncertainty in delivery In the long term, the bank predicts that by 2050, the global market size will reach $5 trillion, with a stock of approximately 1 billion units, far exceeding the current automotive industry potential. In China, approximately 187 billion yuan in policy funds is driving industrial development, while software capabilities and commercial ROI will become the key competitive factors.

Overseas Macro

The U.S. government announces a principled agreement on drug pricing with the UK. The U.S. Trade Representative's Office stated that the agreement requires the UK's National Health Service (NHS) to increase the net price of new drugs by 25%, and it also ensures that UK pharmaceutical companies continue to invest in the U.S.

Every country is heavily in debt, so who are the creditors? Former Greek Finance Minister: It's "all of us". Former Greek Finance Minister Varoufakis revealed that the true creditors of national debt are ourselves—pension accounts, savings, and even central banks, everyone is a "lender." This system, while creating prosperity, has exacerbated inequality, and the annual interest expenditure in the U.S. reaches $1 trillion. He warned that global debt is at a historical high, and once confidence collapses, this fragile system may trigger an uncontrollable crisis.

Opec+ insists on its original plan, will suspend production increases in Q1 2026. Analysts believe that Opec+ has chosen to remain inactive, sending a clear message: stability is more important than ambition in the face of rapidly deteriorating market prospects. The surge in U.S. crude oil supply, combined with Opec+'s production increase, has already exceeded demand growth. The International Energy Agency predicts a record supply surplus in 2026, with both Goldman Sachs and JP Morgan expecting oil prices to decline.

Deutsche Bank warns: Severe supply disruptions + major industry consolidation, copper market deficit may continue next year. Deutsche Bank's latest report indicates that the global copper market has entered a clear deficit state due to severe supply disruptions. In this context, Glencore's upcoming "Capital Markets Day" (CMD) is particularly crucial—its expected free cash flow yield of up to 10% and potential merger and acquisition moves have become market focal points, while Rio Tinto is showcasing a different strategic path through a focus on capital discipline and asset divestiture.

LME cobalt breaks the $50,000 mark, Congo (DRC) still has not resumed exports after the export ban expires. On Monday, LME cobalt futures rose by $1,465, closing at $50,035 per ton. Reports indicate that the cobalt export ban expired on October 15, but the Congo (DRC) has still not resumed exports, and mining companies are still waiting for permission to ship cobalt products to the border Overseas Companies

Amazon and Google Rarely Join Forces: Launch Multi-Cloud High-Speed Interconnection Service. Amazon AWS and Google Cloud have rarely teamed up to jointly launch a service that can quickly establish high-speed private links across clouds, addressing the risk of network interruptions and meeting enterprises' demand for highly stable connections. This move not only simplifies the deployment of multi-cloud architectures but also reflects how cloud giants are strengthening their infrastructure competitiveness by enhancing interoperability against the backdrop of the AI wave and surging traffic. Currently, AWS's quarterly revenue has surpassed that of Google Cloud by more than twice, further solidifying its market leadership.

Airbus Shares Plunge 10% as Quality Issues Emerge with Dozens of A320 Aircraft, Deliveries May Be Affected. Reports indicate that Airbus has discovered industrial quality issues affecting the fuselage panels of dozens of A320 series aircraft, leading to delivery delays. A software update implemented last weekend impacted approximately 6,000 A320 series aircraft, further raising investors' concerns about the reliability of this model. As Airbus races to meet its annual delivery target of 820 aircraft, this may further affect its year-end delivery plans.

Jane Street, Citadel Securities, and Hudson River Trading Report Strong Q3 Performance, On Track for Record Year. The strong performance of these companies further erodes the dominance of major Wall Street firms in this sector.

Today's News Preview

The OECD will release its latest economic outlook for member countries and other major economies.

Eurozone November CPI.

NVIDIA to Attend UBS Global Technology and AI Conference.