Breakfast | Christmas market reappears, three major indices rise for three consecutive days

Market Overview

Tech stocks continue to support the rise of US stocks, with the three major indices experiencing three consecutive gains welcoming the "Christmas rally", and the S&P approaching record highs; Tesla's intraday rise of nearly 4% set a new historical high in less than a week; Nvidia rose 1.5%, Oracle rose over 3%, Micron rose 4%, and gained over 20% in the three days following its earnings report; Paramount, supported by Ellison and competing with Netflix for acquisition, rose over 4%, while acquisition target Warner rose 3.5%, and Netflix fell over 1%; after the Trump administration halted its wind power project, Dominion Energy fell nearly 4%.

The demand for the two-year US Treasury bond auction was weak, and after the auction results were announced, US Treasury yields hit a daily high. The US dollar index halted its three-day rise, falling from a one-week high; Japanese officials released intervention signals, and the yen rebounded sharply after a drop of over 1% last Friday; the offshore yuan broke 7.03 intraday for the first time in 14 months; Bitcoin rose over 3% intraday, re-crossing the $90,000 mark, before giving back most of its gains.

Gold, silver, and copper all hit historical highs, with gold rising over 2% intraday, reaching a new high for the first time in two months, silver and London copper hitting new highs for two consecutive days, with spot silver once rising over 3% and London copper rising for four consecutive days; reports indicate that the US is ramping up efforts to block Venezuelan oil exports, with crude oil rising for four consecutive days to a new high in over a week, rising nearly 3% intraday.

During the Asian session, A-shares and Hong Kong stocks opened high and rose, with the ChiNext Index rising over 2%, precious metals, CPO, and intelligent driving strengthening, and Tuojing Technology's market value surpassing 100 billion, while Shanghai silver continued to hit new highs.

Key News

China's LPR has remained unchanged for seven consecutive months: The 5-year LPR is 3.5%, and the 1-year LPR is 3%.

People's Bank of China: Single overdue amounts below 10,000 yuan can be repaired for personal credit in one go, officially implemented from January 1 next year.

Ministry of Commerce of China: Starting from December 23, temporary anti-subsidy measures will be implemented on imported dairy products originating from the EU.

Trump "designates" director Milan: The Federal Reserve risks recession if it does not continue to cut interest rates next year; Federal Reserve voting committee members are hawkish: There is no need to cut interest rates in the coming months, and November's CPI is underestimated.

Trump announced the "Golden Fleet" plan, including the construction of a namesake warship, with the first vessel expected to be completed in 2028, and will increase the number of aircraft carriers.

Japanese officials issued the sternest warning to date, with the finance minister stating that they have "discretionary power" against speculation in the foreign exchange market and will take bold actions; the deputy finance minister warned of "violent and one-sided" fluctuations in exchange rates.

Reports: Next year, Nvidia's GB300 shipment volume could reach 55,000 units, with Vera Rubin 200 expected to ship in the fourth quarter of next year. Nvidia is reportedly restructuring its cloud team, no longer directly challenging Amazon.

San Francisco experienced a major power outage, causing Google "sister" Waymo's autonomous vehicles to be in disarray, while Tesla thrived, with its stock price hitting a historical high

Warner's acquisition battle escalates: Paramount is directly confronting Netflix, with Larry Ellison personally backing $40.4 billion, and the stock price rises over 4%.

Vanke's 2 billion yuan bond extension plan was not approved, the grace period has been extended to 30 trading days.

Market Report

U.S. and European Stock Markets: The S&P 500 rose 0.64%, closing at 6,878.49 points; the Dow Jones increased by 0.47%, closing at 48,362.68 points; the Nasdaq rose 0.52%, closing at 23,428.829 points. The European STOXX 600 index fell 0.13%, closing at 586.75 points.

A-shares: The Shanghai Composite Index rose 0.69%, closing at 3,917.36 points. The Shenzhen Component Index rose 1.47%, closing at 13,332.73 points. The ChiNext Index rose 2.23%, closing at 3,191.98 points.

Bond Market: By the end of the bond market, the yield on the U.S. 10-year benchmark Treasury bond was about 4.16%, up about 1 basis point during the day; the yield on the 2-year U.S. Treasury bond was about 3.51%, up nearly 3 basis points during the day.

Commodities: WTI February crude oil futures closed up 2.63%, at $58.01 per barrel; Brent February crude oil futures closed up 2.64%, at $62.07 per barrel. COMEX February gold futures closed up 1.87%, at $4,469.4 per ounce. COMEX March silver futures closed up about 1.6%, at $68.565 per ounce. LME copper futures closed up nearly 0.4%, at $11,925 per ton. LME nickel futures closed up about 3.2%, at $15,276 per ton. LME tin futures closed down over 0.6%, at $42,947 per ton.

News Details

Global Highlights

China's LPR remains unchanged for seven consecutive months: On December 5, the 5-year LPR is 3.5%, and the 1-year LPR is 3%. A report from Dongxing Securities indicates that the likelihood of a reserve requirement ratio cut or interest rate reduction this year is low, but the central bank can inject liquidity through various means such as open market operations, reverse repos, and buying/selling government bonds in the open market. Market analysis suggests that the next interest rate cut may occur early next year.

The People's Bank of China: Single overdue amounts below 10,000 yuan can be repaired once for personal credit, officially implemented from January 1 next year. The People's Bank of China has issued a new policy providing individuals with a "one-time credit repair" opportunity. The policy stipulates that for personal credit overdue records occurring between January 1, 2020, and December 31, 2025, with a single overdue amount below 10,000 yuan, as long as the debt is fully repaid by March 31, 2026, the credit reporting system will automatically remove the relevant records No application is required throughout the process, and no fees will be charged.

Ministry of Commerce of China: Starting from December 23, temporary anti-subsidy measures will be implemented on imported dairy products originating from the EU. The Ministry of Commerce announced that the investigating authority has preliminarily determined that there are subsidies for imported dairy products originating from the EU, which have caused substantial harm to the domestic dairy product industry in China, and there is a causal relationship between the subsidies and the substantial harm.

Trump "designates" Fed Governor Milan: The risk of recession exists if the Federal Reserve does not continue to cut interest rates next year. Milan stated on Monday, "I don't think there will be an economic recession in the short term," but the rising unemployment rate should prompt the Federal Reserve to continue cutting interest rates; the unemployment rate may have risen to levels beyond expectations, thus the data will lead the Fed to adopt a dovish stance. He reiterated that if no one is appointed by the end of January, he will continue to serve as a Fed governor. Other recent Fed officials who spoke were more cautious compared to Milan, including the voting member Hammack, who advocated for pausing interest rate cuts in an interview released last Sunday.

• Fed voting member takes a hawkish stance: There is no need to cut interest rates in the coming months, November CPI underestimated. 2026 FOMC voting member and Cleveland Fed President Hammack stated that the Fed does not need to cut interest rates at least until next spring, and the November CPI inflation data may be distorted, thereby underestimating the actual price increase. Although Hammack believes the current policy rate is at an appropriate level near neutral, she prefers to adopt a slightly more restrictive stance to exert greater pressure on inflation.

Trump announces the "Golden Fleet" plan, including the construction of a namesake warship, with the first vessel expected to be completed in 2028. Trump announced the approval of a plan for the U.S. Navy to build two new warships, while the U.S. will also increase the number of aircraft carriers. Trump stated that the Navy will build a new type of "Trump-class" warship. This is part of the White House's efforts to modernize the Navy's surface fleet and revitalize the domestic shipbuilding industry. A senior U.S. Navy official, Phelan, previously stated that the new frigate fleet, codenamed FF(X), will be built by HII in Newport News, Virginia, based on its "Legend-class" patrol vessel design.

Japanese officials issue the sternest warning to date, with the finance minister stating that they have "discretion" to act against speculation in the currency market and will take bold actions. Japan's Deputy Finance Minister Atsushi Mimura, who is in charge of foreign exchange affairs, stated that the recent "sharp and one-sided" fluctuations in exchange rates have prompted the government to take appropriate actions against excessive volatility. Coupled with expectations of aggressive fiscal stimulus from the high city government, Japan's 10-year government bond yield has risen to a 27-year high, and the market expects Japan may intervene in the currency market again amid increased volatility Asset management giant Apollo enters "risk-averse mode": hoarding cash, deleveraging, waiting for "bad things to happen"? Apollo's CEO warns that asset prices are too high and geopolitical risks are increasing. The company is significantly hoarding cash, reducing leverage, and selling off high-risk assets such as AI loans and CLOs, with its insurance company reducing CLO exposure to $20 billion. Apollo also warns that offshore regulatory arbitrage may trigger systemic risks in the insurance market, and the company is preparing for potential market turmoil.

• Defaults, bad debts, and redemption waves "rise and fall," the "trillion-dollar private credit story" in the U.S. is collapsing. The myth of "stable returns" promised to retail investors by Wall Street is unraveling, with BDC stocks from top institutions like KKR and BlackRock plummeting over 30%, and the bad loan rate soaring to 5%, with valuation fraud scandals emerging frequently. High-yield products, once packaged as "safe havens," are now putting retail investors' principal safety to the test, as JP Morgan CEO Jamie Dimon's warnings about "cockroaches" in the credit market are being realized one by one.

Metal frenzy! Gold, silver, and copper hit new highs, platinum and palladium surge across the board. Amid escalating geopolitical risks and a repricing of interest rate cut expectations from the Federal Reserve, metal assets have become one of the most concentrated destinations for funds.

Report: NVIDIA's GB300 shipments could reach 55,000 units next year, Vera Rubin 200 expected to ship in Q4 next year. The latest market forecast shows that shipments of NVIDIA's GB300 AI server cabinets are expected to reach 55,000 units next year, a year-on-year increase of 129%, primarily driven by giants like Microsoft and Meta. Notably, the next-generation Vera Rubin 200 platform is expected to start shipping in Q4 next year, providing sustained growth momentum for supply chain manufacturers like Hon Hai and Quanta, with some manufacturers' order visibility extending as far as 2027.

• NVIDIA reportedly restructures cloud team, no longer directly challenging Amazon. After proposing a vision to create cloud services that could compete with AWS for more than two years, NVIDIA has made significant adjustments to its cloud business strategy. The company recently restructured its cloud team, integrating DGX Cloud into its engineering and operations system, shifting focus to meet internal R&D demands for NVIDIA chips, and no longer prioritizing sales of cloud services to external corporate clients.

San Francisco power outage, Google's "sister" Waymo self-driving cars in chaos, Tesla wins big. The major power outage in San Francisco caused Waymo self-driving cars to come to a halt due to the loss of traffic signals and infrastructure guidance, forcing operations to pause and exposing the vulnerabilities of the "high-precision maps + rules" approach in extreme scenarios Musk took the opportunity to compare Tesla's "pure vision" solution, sparking a technical route dispute. The incident intensified public and regulatory concerns about the safety and reliability of autonomous driving commercialization, becoming a significant test of trust in the industry.

Warner's acquisition battle escalates: Ellison personally guarantees $40.4 billion, Paramount directly confronts Netflix. Paramount announced on Monday that in the revised acquisition offer, it officially introduced an irrevocable personal guarantee from the company's CEO father, billionaire Larry Ellison, to back the $40.4 billion equity financing and potential compensation liabilities, directly responding to the previous concerns of the Warner Bros. Discovery board regarding the reliability of funds. Paramount also proposed to increase its regulatory reverse termination fee from $5 billion to $5.8 billion. On Monday, Warner's stock rose 3.5%, Paramount's rose over 4%, and Netflix's fell over 1%.

Vanke's 2 billion yuan bond extension plan was not approved, grace period extended to 30 trading days. According to Shanghai Securities News, Vanke promised that the repayment order of the bond would not be worse than that of subsequent maturing bonds, and it would not pay principal to subsequent bonds before repaying the current bonds. Industry insiders believe this move is to buy time for Vanke's debt management, and bondholders still hold expectations for timely repayment.

Research Report Highlights

Goldman's "Top 10 Core Theme Trades for 2026": Cyclical tailwinds, falling inflation, AI turbulence, volatility protection. Goldman Sachs believes that the global market in 2026 will present a "Game of Thrones": on one hand, a favorable macro backdrop of steady growth, falling inflation, and Fed rate cuts; on the other hand, asset valuations that are already "overheated"—for example, AI valuations have significantly outpaced fundamentals, indicating that volatility will intensify. Goldman advises investors to pay attention to valuation risks in AI themes, the appreciation trend of the yuan, the weakening pressure on the dollar, and to use tools such as interest rates, foreign exchange, and gold for hedging.

Is AI cloud business severely undervalued? Wells Fargo: Market is overly pessimistic, Oracle has 50% upside potential. Wells Fargo's report pointed out that with strong potential for AI cloud infrastructure, Oracle's stock has nearly 50% upside potential, with a target price of $285. The bank emphasized that Oracle's exposure to the undervalued AI cloud business will be the core driving force supporting its bullish stock price. Analysts noted that if AI applications accelerate, it would mean significant rebound opportunities for the stock.

A new cycle in AI storage: The siege of NAND and the defense of HDD. CICC expects that the resonance of AI on the cloud side and the endpoint side will strongly open up the demand ceiling for SSDs. Global NAND Flash shipments are expected to approach 2000EB by 2028, maintaining nearly 30% high growth over the next three years HDD remains a cost-effective choice for cloud computing vendors' cold storage. CICC believes that the future application of HDD will focus on ultra-large-scale data lakes and cold data archiving, with a market growth rate of about 15% over the next three years.

Alpha Summit

Guangfa's Liu Chenming: Rejecting traditional macro, looking at the debt resolution and profit structure changes to see the 2026 layout window. Liu Chenming stated that the core logic of global asset pricing in 2026 is "debt resolution," and AI and resource products are essentially different manifestations of the same macro path. The current profit structure of A-shares has undergone a qualitative change, with the proportion of emerging industries and overseas markets rising to 40%, detaching the stock market from the traditional macro "barometer" logic. He is optimistic about a "slow bull" market driven by ROE recovery in 2026 and pointed out that December to January of the following year is a key layout window as the main sectors pull back.

MiniMax's Xue Zizhao: AI large models are not a "money-burning game," and domestic large models are severely undervalued. Xue Zizhao stated that domestic large model companies like MiniMax are technically close to or even surpassing their American counterparts in certain areas, with the gap continuing to narrow, but valuations still differ by two orders of magnitude. The valuations of these companies may be 100 times that of Chinese companies, but the technology is only 5% ahead, with investments possibly ranging from 50 to 100 times. In contrast, domestic companies have higher R&D efficiency but are severely undervalued.

Professor Fang Yue: If AI cannot scale, the market may replay the 2000 internet bubble. Fang Yue, director of the China-Europe AI and Management Innovation Research Center, believes that AI belongs to technology, but technology does not equal value; scaling is key. If AI technology can generate value through large-scale applications, it can bring about significant changes in productivity. Future competition will not be purely about efficiency but rather about the degree of "human-machine integration."

Domestic Macro

Li Qiang presided over the State Council's "14th Five-Year Plan" draft preparation work leading group meeting, emphasizing the need to deeply study and implement the important speech spirit of the General Secretary of the Communist Party of China, and further improve the preparation work of the "14th Five-Year Plan" outline. Ding Xuexiang attended.. Committed to developing new quality productivity, breakthroughs in promoting technological innovation, accelerating the cultivation of new driving forces, and optimizing and upgrading the economic structure. It is necessary to further clarify tasks and measures, refine and implement the strategic tasks outlined in the "14th Five-Year Plan" proposal, making the planning content more aligned with development needs. Plan a number of major projects and initiatives that can drive the overall situation, accumulating new momentum for future development and cultivating competitiveness, while also providing support for expanding domestic demand and stabilizing economic operations at present Dongfang Hongwan Chairman Dan Bin: "AI Bubble Theory" is Noise, Stay Away from Financing and Stock Trading. According to The Paper, Dan Bin emphasized that the risk of missing out on opportunities in this era far outweighs concerns about bubbles, and the AI revolution is a cycle lasting over ten years. He is optimistic about China's advantages in AI application scenarios and global industrial chain opportunities. Investment advice focuses on high-quality companies or ETFs, particularly stressing that "never finance stock trading" is an investment red line, stating that it is difficult to lose money without borrowing to buy good companies.

Domestic Companies

In-Depth Analysis of AI Large Model Unicorn Prospectus: MiniMax for C, Zhipu for B. MiniMax bets on C-end super applications, with paid users exceeding 1.77 million, and gross margin turning from negative to positive at 23%; Zhipu focuses on B-end local deployment, serving 8,000 institutions, with a gross margin as high as 50%. Both companies' R&D investments exceed their revenues by several times, backed by top capital such as Alibaba and Tencent, yet they have taken distinctly different commercialization paths for ToC and ToB. Additionally, giants like Alibaba, Tencent, and miHoYo appear on the shareholder list of both companies.

Moor, Muxi, Birun, and Tianshu! "Four Domestic GPU Little Dragons" Gather for IPO. Although the four companies are in the same track, their differentiated paths are already very clear: from pursuing a fully functional ecological platform strategy to focusing on single-quarter profitability engineering capabilities, and binding national-level computing power hubs in a cluster route, each company is seizing market share in the chip market through different angles.

All Top Six are Chinese Companies! With Internal Power Reform and External AI Wave, China's Energy Storage Industry Welcomes an Explosive Cycle. AI data centers resonate with power reform, and China's energy storage batteries are entering a new round of explosion, with global shipments expected to surge by 75% this year. CATL, Haicheng Energy Storage, Yiwei Lithium Energy, BYD, Zhongchuang Xinhang, and Ruipu Lanjun dominate the top six global shipments. Battery export value exceeds $66 billion, surpassing photovoltaics to become the most profitable export commodity. Energy storage is replacing electric vehicles as the new growth engine of the battery industry, continuously consolidating its dominant position in the global supply chain.

Double-Driven Performance Soars! Sanhua Intelligent Controls: Expected Net Profit of 3.874 to 4.649 Billion Yuan in 2025, a Year-on-Year Increase of 25%-50%. Regarding the significant increase in performance, Sanhua Intelligent Controls stated that the synergy of its two major business segments provides solid support for the company's annual performance growth: in the refrigeration and air conditioning electrical components business, Sanhua Intelligent Controls continues to demonstrate the dominance of an industry leader. As the company's second growth curve, the automotive components business (especially in the field of new energy vehicle thermal management) performs particularly well Overseas Macro

Trump appoints envoy to Greenland, former US diplomat: Too absurd! According to Xinhua News Agency, Trump announced last Sunday the appointment of Louisiana Governor Jeff Landry as the US envoy to Greenland, claiming to make this Danish autonomous territory "part of the United States." Former US Ambassador to Russia Michael McFaul criticized the appointment as "too absurd," comparable to "Mexico appointing an envoy to make Louisiana part of Mexico."

Senior commodity trader: "Second wave" inflation concerns emerge, 1970s inflation wave may repeat. A former commodity trader warned that, amid fiscal spending expansion, the retreat of globalization, and ongoing supply-side constraints, inflation may experience a "second wave" rebound similar to the 1970s. Although it may not return to the highs of 2021, sustained inflation above 2% would be enough to impact the market. He believes that long-term bonds carry the greatest risk, while stocks, real estate, and commodities, especially industrial metals and energy, may become more effective inflation hedges in the current environment.

BofA CEO: The economic pull of AI is gradually becoming evident. Brian Moynihan pointed out that AI investment is gradually "gaining momentum," providing significant marginal support to the US economy, and will continue to amplify its impact in the coming years. Even if the AI industry experiences a temporary pullback, its impact on the macroeconomy remains relatively limited. BofA expects the US economy to maintain strong growth next year, with a growth rate of 2.4%. Although the job market has slowed, overall risks are manageable.

Overseas Companies

In less than two years, "calculated profit margin" doubled from 35% to 70%, OpenAI "can actually be quite profitable"? Reports indicate that OpenAI's "calculated profit margin" has soared from about 35% to 70% in less than two years, demonstrating significant progress in controlling AI model operating costs. The substantial increase in calculated profit margin means the company is earning more revenue from each dollar spent on servers. CEO Sam Altman recently stated in a podcast interview, "If we don't continue to significantly increase training costs, we would have been profitable long ago."

"Illusions" affect "reliability"! Salesforce executives say "trust in large models has declined," usage has decreased. Salesforce has encountered several technical challenges with large model applications; when given more than eight instructions, it begins to omit instructions, which is not ideal for tasks requiring precise handling. Additionally, AI can exhibit "drift," where "when users ask irrelevant questions, the AI agent loses focus on its primary objectives." Google doubles down on data centers: parent company acquires energy partner Intersect for $4.75 billion. This acquisition is expected to be completed in the first half of next year and aims to secure more power supply for Google's data centers, addressing the surge in electricity demand that has risen for the first time in decades due to AI, new factories, and the overall electrification of the economy, which the aging U.S. grid struggles to meet. Alphabet CEO Pichai stated that Intersect will help the company expand capacity and operate more flexibly while synchronously building new power generation capabilities with the load of new data centers, reimagining energy solutions.

Today's News Preview

The U.S. government releases the third-quarter GDP report, updating the PCE data for July to September.

U.S. durable goods orders for October.

U.S. industrial production and manufacturing output for November