Breakfast | Oracle reignites AI concerns, weighing down AI concept stocks, NVIDIA and Tesla drop about 4%

Market Overview

Oracle reignites AI concerns, weighing down US stocks, with the Nasdaq down nearly 2%, and the S&P 500 and Dow Jones experiencing four consecutive declines. NVIDIA fell nearly 4%, Oracle dropped over 5%, and CoreWeave fell over 7%. Tesla declined over 4%, bidding farewell to record highs. Paramount, which was rejected for acquisition by Warner's board, fell over 5%. Medline, which had the largest IPO of the year, rose 41%. Micron initially rose 9% after earnings.

The dollar ended a two-day decline, emerging from a two-month low. Following the UK CPI, expectations for a rate cut by the central bank this year increased, leading to a rebound in UK bonds and the pound hitting a one-week low.

Cryptocurrency saw a pullback after an early surge in US stocks, with Bitcoin briefly dropping below $86,000 and Ethereum falling over 4%.

Gold rose over 1% during the session, nearing a seven-week high; silver futures surged over 6% to a new high. Geopolitical risks intensified, crude oil reversed four consecutive declines, rising over 2% and moving away from a four-year low.

In the Asian session, the ChiNext Index rose over 3%, MuXi surged nearly 700%, computing hardware exploded, financial stocks strengthened, broad-based ETFs saw increased volume, lithium carbonate futures rose over 7%, platinum and palladium futures hit the limit up, Shanghai silver rose over 5%, and Hong Kong tech stocks broadly increased.

Key News

Federal Reserve Governor Waller: There is still 50-100 basis points of room for rate cuts, but there is no need to rush into action. US Treasury Secretary Basant: Any concerns about Hassett's qualifications to serve as Fed Chair are absurd.

Trump deployed the “largest fleet in South American history” to blockade sanctioned oil tankers in Venezuela; threatened new sanctions against Russia; Brent crude returned to $60. Insiders say the US and Russia will hold talks in Miami this weekend.

Oracle's $10 billion data center financing has encountered obstacles, Blue Owl has withdrawn, but the company states that the transaction is still proceeding as planned, and overall progress is in line with expectations. Oracle fell 5.4%, with five-year CDS reaching a new high since January 2009.

Micron's earnings and guidance both exceeded expectations, increasing capital expenditures to $20 billion, stating that the memory/storage chip supply shortage will persist until 2026 and last even longer, surging 9% in after-hours trading.

Challenging OpenAI for months! Google released a more efficient Gemini 3 Flash, with the app's default model enhancing search upon launch. Google announced the "Sun Chaser" plan, aiming to deploy AI data centers in space by 2027.

Xiaomi suddenly launched a new model, focusing on "extreme cost performance," with Luo Fuli stating: "This is just our second step on the AGI roadmap."

The battle for the "first stock of AI large models" has begun! MiniMax and ZhiPu AI passed the Hong Kong Stock Exchange hearing.

The competition for the "Chinese version of NVIDIA" is heating up! MuXi's stock surged 700% on its first day of trading, with a market value approaching Mozi Thread.

Resuming trading on Thursday! CICC merges with Dongxing and Xinda, with the share exchange price set at 36.91 yuan per share.

The 2025 New Fortune Best Analysts list is out! Guangfa's Guo Lei team wins the macro champion again, and Guangfa's Liu Chenming team ranks first in strategy.

Market Closing Report

US and European Stock Markets: The S&P 500 fell by 1.16%, closing at 6721.43 points. The Dow Jones fell by 0.47%, closing at 47885.97 points. The Nasdaq fell by 1.81%, closing at 22693.323 points. The European STOXX 600 index closed down 0.00%, at 579.79 points.

A-shares: The Shanghai Composite Index closed at 3870.28 points, up 1.19%. The Shenzhen Component Index closed at 13224.51 points, up 2.40%. The ChiNext Index closed at 3175.91 points, up 3.39%.

Bond Market: The yield on the US 10-year Treasury rose by 0.59 basis points, at 4.1509%. The yield on the 2-year Treasury fell by 0.41 basis points, at 3.4829%.

Commodities: COMEX gold futures rose by 0.96%, at $4374.00 per ounce. COMEX silver futures rose by 5.19%, at $66.610 per ounce. WTI January crude oil futures closed up 1.21%, at $55.94 per barrel. Brent February crude oil futures closed up 1.29%, at $59.68 per barrel.

Key News Details

Global Highlights

Federal Reserve Governor Waller: There is still room for a 50 to 100 basis point rate cut, and there is no need to rush into it. Waller stated that as the job market weakens and inflation is controlled, the Federal Reserve still has room for a 50 to 100 basis point rate cut, but there is no need to rush, and will gradually guide interest rates towards neutrality. He believes that the job market has not shown a cliff-like decline, and stable inflation expectations provide conditions for moderate rate cuts, with the Federal Reserve maintaining a balance between stable growth and controlling inflation.

US Treasury Secretary Basant: Any concerns about Hassett's qualifications to serve as Federal Reserve Chairman are absurd. A reporter mentioned that Trump stated at the end of November that he already knew the candidate, but interviews are still ongoing; in response, Basant said, “Maybe he is referring to—maybe I am his choice, but I could not accept it at that time.”

Oil prices rose sharply, with Brent crude back above $60! Trump deploys “the largest fleet in South American history” to blockade Venezuelan sanctioned oil tankersAccording to reports, Trump announced a comprehensive maritime blockade against Venezuela and designated the Maduro government as a "terrorist organization," prompting international oil prices to rise sharply, with WTI crude oil and Brent crude oil both increasing by over 1% during the day. Venezuela strongly condemned the U.S. for "stealing resources" and stated it would file a complaint through the United Nations.

Just announced the blockade of Venezuela, Trump threatens new sanctions against Russia, Brent crude returns to $60! According to reports, informed sources revealed that the sanctions options being considered by the U.S. include targeting the so-called "shadow fleet" tankers used to transport Russian oil, as well as traders facilitating related transactions. These measures are being prepared to be implemented if Russian President Putin refuses to reach a proposed peace agreement with Ukraine, potentially as early as this week.

• Informed sources say U.S. and Russia will hold talks in Miami this weekend. A CCTV reporter learned on December 17 local time that two informed sources revealed that U.S. and Russian officials are expected to meet in Miami, USA, this weekend. The relevant plans are still being formulated. One informed source indicated that the Russian delegation is expected to include Dmitriev, president of the Russian Direct Investment Fund, while the U.S. delegation will include Middle East envoy Witte and Trump's son-in-law Kushner.

Oracle's $10 billion data center financing hits a snag, Blue Owl exits, company says deal is still on track. Reports indicate that Blue Owl had been negotiating with lenders and Oracle to invest in a planned 1 gigawatt data center in Michigan. However, negotiations stalled, and Blue Owl's plan to arrange up to $10 billion in financing and make a large equity investment could not proceed. Oracle confirmed Blue Owl's exit but stated that the project's equity transaction negotiations are still progressing as planned, and overall progress is in line with expectations. Oracle's stock fell 5.4% on Wednesday, with five-year CDS reaching a new high since January 2009.

Chip demand is strong, Micron's performance and guidance both "explode," increasing capital expenditure, stock price surges 9% after hours. Against the backdrop of explosive demand for AI data centers and a continued tightening of memory chip supply, Micron delivered a significantly better-than-expected first-quarter report after hours on Wednesday and provided guidance for the second quarter that far exceeded market expectations for revenue, gross margin, and earnings per share, indicating that the shortage of memory/storage chips will persist until 2026 and last even longer, raising its capital expenditure expectation for fiscal year 2026 from $18 billion to $20 billion.Challenging OpenAI for months! Google releases more efficient Gemini 3 Flash, default model for apps, enhancing search upon launch. In benchmark tests assessing programming capabilities, Gemini 3 Flash scored even higher than Gemini 3 Pro. The new Flash model maintains reasoning capabilities close to Gemini 3 Pro while achieving a speed three times that of Gemini 2.5 Pro, at only a quarter of the cost of Gemini 3 Pro; priced at $0.5 per million input tokens and $3 per million output tokens, slightly higher than Gemini 2.5 Flash, but outperforms 2.5 Pro with three times the speed.

Is AI computing power “escaping Earth”? Google announces the “Sun Chaser” plan, aiming to deploy AI data centers in space by 2027. Google proposed the concept of “space data centers,” attempting to alleviate AI computing power and energy bottlenecks with solar-powered satellite clusters. However, high costs, maintenance difficulties, orbital collisions, and lack of regulation pose significant challenges. Following setbacks in Microsoft's underwater project, this plan appears to be a radical bet on the unlimited expansion of AI.

Xiaomi suddenly unveils a new model, focusing on “extreme cost performance,” Luo Fuli: “This is just our second step on the AGI roadmap”. At $0.1 per million tokens, with a speed of 150 tokens per second! Xiaomi's new model MiMo-V2-Flash, with a programming score of 73.4%, rivals DeepSeek-V3.2. Luo Fuli stated, “This is just our second step on the AGI roadmap.” Morgan Stanley analyzes that Xiaomi intends to deeply reshape its vast “people, vehicles, and home” ecosystem through this high-performance model.

• Post-95 “AI genius” Luo Fuli's debut: The gap between Chinese models and top-tier has shrunk from three years to mere months! She comes from an ordinary rural family and was once lured by Lei Jun with a multi-million annual salary. AI expert Luo Fuli, who joined Xiaomi just over a month ago, made her first public appearance, introducing Xiaomi's open-source MiMo-V2-Flash large model. This model has only 309 billion parameters, ranking among the top two globally in coding capability, outperforming DeepSeek V3.2. Luo Fuli stated that the gap between Chinese models and the world's top has shrunk from three years in 2020 to mere months. She emphasized that future AI should transition from language simulation to understanding the physical world.

The battle for the “first stock” of AI large models has begun! MiniMax and Zhipu AI pass the Hong Kong Stock Exchange hearing**If all goes well, these two companies will become the fastest cases to pass hearings since the new "filing system" for mainland companies going public in Hong Kong was implemented. MiniMax is reportedly planning to go public in Hong Kong in January next year.

The competition for the "Chinese version of Nvidia" is heating up! MuXi surged 700% on its first day of listing, with a market value approaching Moore Threads. MuXi Co., founded by several senior AMD engineers, focuses on general computing and AI computing power, reducing migration costs and accelerating commercialization through high compatibility with CUDA. In contrast, Moore Threads, founded by former Nvidia executive Zhang Jianzhong, is closer to Nvidia's full-featured GPU approach, emphasizing self-built ecosystems and complete functional coverage. MuXi is expected to achieve breakeven as early as 2026, earlier than Moore Threads' 2027. In the future, who is most likely to first establish a commercial closed loop for domestic GPUs? This war has just begun.

• The big investor Ge Weidong made over 10 billion: Investors who missed Moore made a fortune on MuXi. MuXi's debut on the Sci-Tech Innovation Board surged 568%, with a market value approaching 280 billion! Each winning ticket earned 300,000, and private equity tycoon Ge Weidong, who lurked for three years, raked in billions. Revenue has surpassed Moore Threads, with the AMD team in place.

Resuming trading on Thursday! CICC merges Dongxing and Xinda: the exchange price is set at 36.91 yuan/share. CICC disclosed the plan for the exchange of shares to absorb and merge Dongxing Securities and Xinda Securities. The three stocks will resume trading on December 18, constituting the most significant merger in the brokerage sector recently. The implementation of the plan has led to a pre-emptive strengthening of the sector. Based on static data estimates for the first three quarters of 2025, CICC's operating income after the merger is approximately 27.4 billion yuan, while its capital scale will significantly increase, making it the fourth brokerage in the industry with total assets exceeding one trillion, and its net asset ranking will also rise to fourth place.

The 2025 New Fortune Best Analyst List is out! Guangfa's Guo Lei team wins macro champion again, Guangfa's Liu Chenming team ranks first in strategy. In the fixed income research field, Huatai Securities' Zhang Jiqiang ranks first, and his team has held the top position for seven consecutive years since 2019. In terms of individual awards, Qiu Guanhua from Zheshang Securities received the Master Analyst award, while Wu Bohua from Changjiang Securities and Guan Quansen from Guolian Minsheng Securities received the Hundred Star Analyst award.

Important Survey

The latest Federal Reserve survey: CFOs expect U.S. prices to rise 4.2% next year, with tariffs remaining the biggest concern. The latest survey shows that U.S. CFOs expect prices to rise 4.2% in 2026, significantly higher than the Federal Reserve's judgment of inflation falling to near 2%. Tariffs and rising costs are seen as major drivers, with inflation expectations on the corporate side being more stickyAt the same time, business confidence has declined, and companies hold only a moderate growth expectation for the economy, with rising risks of sustained high inflation.

Bank of America Fund Manager Survey: From Stocks to Commodities, Investors are the Most Optimistic in Four and a Half Years, with "MAG 7" Being the Most Crowded Trade. The December survey by Bank of America shows that global fund manager optimism has reached a four-and-a-half-year high, with cash levels dropping to historical lows, and significant capital flowing into U.S. stocks, technology, and commodities, firmly expecting an economic "soft landing." However, extreme bullishness has triggered a contrarian "sell signal" from Bank of America, with the AI bubble and crowded trades remaining major risks.

UBS Corporate Survey: 60% of Companies Choose to "Build" AI Instead of Buying Off-the-Shelf, Only 5% of "AI Agents" Have Truly Been Implemented. Despite the continued warming of artificial intelligence technology, the large-scale deployment of enterprise-level AI applications is progressing slowly. UBS's latest survey shows that only 17% of surveyed companies have achieved large-scale production of AI projects, a slight increase from 14% in March this year. As many as 60% of companies choose to build AI applications independently rather than purchasing third-party finished products, while the much-discussed "AI agent" technology has only been implemented on a large scale by 5% of companies. The survey also found that AI applications have not led to large-scale layoffs, with 40% of surveyed companies stating that AI will drive employee growth.

Domestic Macro

In the first 11 months, national general public budget revenue increased by 0.8% year-on-year, expenditure increased by 1.4%, and transaction stamp duty revenue increased by 70.7%. From January to November, national general public budget revenue reached 20,051.6 billion yuan, a year-on-year increase of 0.8%. In terms of major tax revenue items, property tax was 471.4 billion yuan, a year-on-year increase of 10.8%. Vehicle purchase tax was 181.4 billion yuan, a year-on-year decrease of 17.4%. Securities transaction stamp duty was 185.5 billion yuan, a year-on-year increase of 70.7%.

State Administration for Market Regulation: Platforms Requiring Merchants to Offer "Lowest Prices Online" May Constitute Monopoly. According to Xinhua News Agency, some platform companies require merchants on their platforms to sell goods at prices not higher than those on other competitive platforms. In response to this situation, the recently released "Antitrust Compliance Guidelines for Internet Platforms (Draft for Comments)" warns that requiring merchants to offer "lowest prices online" may constitute an abuse of market dominance or monopolistic agreement. The guidelines also emphasize achieving benevolent algorithms as an important compliance goal for platform companies, listing risks such as "algorithm collusion," and encouraging platform companies to conduct algorithm screening to build a monopoly identification and prevention system to prevent monopolistic behavior from occurring at the source.

On Thursday, Hainan will close its borders. Hainan Free Trade Port will start closing its borders on December 18, 2025, focusing on "opening up the first line and controlling the second line."Through tax reduction, simplified customs clearance, and expanded openness, promote the liberalization of trade and investment, while significantly reducing the consumption costs of residents and the operating costs of enterprises. Closing the borders does not mean being closed off, but rather promoting high-level openness, contributing to the establishment of a high-level trade port with international influence by 2035.

Domestic Companies

OpenAI expert Yao Shunyu appointed as Tencent's Chief AI Scientist. OpenAI scientist and Tsinghua Yao Class alumnus Yao Shunyu has officially joined Tencent as Chief AI Scientist in the CEO/President's Office, reporting to President Liu Chiping. Tencent is simultaneously upgrading its structure, newly establishing three major departments including AI Infra, to comprehensively strengthen the foundational capabilities of large models. Yao Shunyu is an expert in the field of intelligent agents, with his representative works ReAct and Thinking Tree cited over 4,000 times. He stated that AI has entered the second half, where "evaluation will be more important than training," with the core being to define problems and convert AI capabilities into measurable value.

Overseas Macro

Trade tensions between Switzerland and the U.S. further ease, Novartis and Roche expected to reach drug pricing agreements with the U.S.. The White House is expected to announce a drug pricing agreement with Novartis and Roche as early as Friday, easing trade tensions between the U.S. and Switzerland. This announcement may also cover other pharmaceutical companies, as Pfizer and AstraZeneca have reached similar agreements in recent months. These agreements aim to lower drug prices in the U.S., with pharmaceutical companies agreeing to reduce drug costs under certain conditions in exchange for tariff reductions and potential regulatory leniency.

Next year's market focus, what will Trump do for the midterms? Goldman Sachs: Cut tariffs and fiscal stimulus! Goldman Sachs Chief Political Economist Alec Phillips expects that by the end of 2026, the effective tariff rate in the U.S. will decrease by about 2 percentage points from the current level, but will still be 9.5 percentage points higher than early 2025. Additionally, Phillips noted that although the second round of fiscal stimulus legislation faces numerous obstacles, related measures in housing policy may be introduced.

With the central bank's decision approaching, UK November CPI unexpectedly accelerates decline, expectations for the fourth interest rate cut this year rise. UK inflation unexpectedly fell to 3.2% in November, with cooling food and service prices and a weakening labor market reinforcing signals of economic slowdown. The market widely bets that the Bank of England will implement its fourth interest rate cut of the year this Thursday, opening up space for continued easing early next year. The fiscal budget may temporarily suppress inflation, but uncertainties remain regarding the coordination of monetary and fiscal policies.

On the eve of the decision, a member of the high-level government policy group: The Bank of Japan should avoid raising interest rates too early. Ahead of the Bank of Japan's policy decision, differences in positions between the government and the central bank have surfacedFormer Vice Governor Nakata Masakazu warned against premature interest rate hikes, advocating for raising the neutral interest rate first through fiscal and growth policies, which was interpreted as a constraint on the central bank's rate hike pace. Nevertheless, the market remains highly betting on a 25 basis point rate hike this week.

Overseas Companies

Report: Apple is in talks with Indian chip manufacturers for the assembly and packaging of iPhone components. According to reports, Apple is in preliminary talks with Indian chip manufacturer CG Semi regarding the assembly and packaging of iPhone components, marking Apple's first plan to enter the chip packaging and testing field in India. This move may aim to shift most iPhone production sold in the U.S. to India by the end of 2026. While the specific types of chips for cooperation are not yet determined, it may start with display chips.

Amazon is negotiating to invest over $10 billion in OpenAI, with the agreement including the use of AWS chips. Amazon is negotiating to invest at least $10 billion in OpenAI, which could boost the latter's valuation to over $500 billion. At the core of the deal, OpenAI plans to use Amazon's self-developed Trainium chips to reduce reliance on Nvidia. Due to Microsoft's exclusivity agreement, Amazon cannot resell OpenAI models, and the collaboration will focus on underlying computing infrastructure and potential e-commerce scenario synergies.

IPO countdown! SpaceX officially starts the "quiet period" for its listing, with a valuation potentially exceeding $1.5 trillion. According to reports, SpaceX has initiated a pre-IPO "quiet period," requiring employees to comply with SEC regulations and not promote the listing plans externally. The company plans to conduct an IPO in 2026, aiming to raise over $30 billion, with a target valuation of about $1.5 trillion, which could become the largest IPO in history. The funds raised will be used for high-frequency flight testing of the Starship rocket, space AI data centers, and lunar base construction. However, the company emphasizes that the timing and valuation of the IPO remain uncertain.

Musk: xAI may achieve AGI as early as 2026, and the company will outperform competitors if it survives the next two to three years. Musk is quite optimistic about the future prospects of his artificial intelligence company xAI. In a recent meeting, he stated that as long as the company can survive the next two to three years, xAI will outperform its competitors; xAI may achieve artificial general intelligence (AGI), reaching or surpassing human intelligence, possibly as early as 2026. Insiders described the meeting as "fast-paced and uplifting."

To become the Costco of the healthcare industry, Medline raises $6.26 billion, creating the largest IPO of the year, debuting with a surge of over 40%Medline created the largest IPO in the U.S. stock market in four years, as well as the fifth largest IPO in the past decade and the largest IPO for a private equity-backed company in history. Based on the closing price, Medline is valued at over $66 billion, nearly double the company's valuation when Blackstone and other private equity firms acquired a majority stake four years ago.

Today's News Preview

China's November Swift RMB share in global payments.

U.S. November CPI.

Number of first-time unemployment claims in the U.S. last week.

U.S. October net long-term capital inflows.

Hainan Free Trade Port officially launches full island customs operations.

European Central Bank announces interest rate decision, President Lagarde holds a press conference.

Bank of England announces interest rate decision.

ByteDance's Volcano Engine FORCE Power Conference