Breakfast | "Little Non-Farm" data growth is below expectations, U.S. stock market's three major indices show mixed results

Market Overview

U.S. economic data is mixed, with high geopolitical risks putting pressure on the U.S. stock market. The S&P 500 and Dow Jones have fallen from record highs, but the Nasdaq has seen three consecutive days of gains; Google's parent company rose 2.5%, surpassing Apple in market value for the first time since 2019, while Apple has seen six consecutive declines; the chip index halted its three-day rise, but Nvidia rebounded by 1%; after Trump stated that up to 50 million barrels of Venezuelan oil would be handed over to the U.S., refiner Valero Energy rose over 3%; after Trump said he would not allow defense companies to pay dividends and buy back shares, defense giants fell, with Northrop Grumman down 5.5%, Lockheed Martin nearly 5%, and Raytheon Technologies dropping over 5% in after-hours trading; Trump plans to prohibit institutional investors from buying single-family homes in the U.S., causing Blackstone to drop 5.6%.

The U.S. "small non-farm" ADP employment growth was disappointing, U.S. Treasury yields hit a daily low, but after the ISM data, U.S. Treasury yields rebounded, with two-year Treasury yields turning positive. Following the release of the U.S. ISM services index, the dollar's gains expanded, approaching a three-week high; the offshore yuan fell over 100 points during the day, nearing the 7.0 mark, hitting a new low for the year; Bitcoin dropped over 3% from its daily high, falling below $91,000, while Ethereum fell over 5%.

The metal rally has cooled off. Silver and platinum led the precious metals plunge: futures silver fell over 6% during the day, spot platinum dropped nearly 8%, and gold fell over 1% during the day; industrial metals retreated across the board: London copper fell over 2%, ending its record high, and London nickel fell over 3%. Oil has seen two consecutive declines to a three-week low, with U.S. oil dropping over 2% during the day.

In the Asian session, the Shanghai Composite Index saw 14 consecutive days of gains, approaching 4100 points, with memory chips active throughout the day, the coal sector exploding, and "double coke" hitting the limit up, while the Hang Seng Index fell 1.5%, and pharmaceuticals and biotechnology surged.

Key News

China's foreign exchange reserves in December increased by 0.34% month-on-month, and the People's Bank of China has increased its gold holdings for 14 consecutive months.

The Ministry of Industry and Information Technology and eight other departments: Accelerate the upgrade of smart terminals, aiming for safe and reliable supply of key core technologies in artificial intelligence by 2027.

The U.S. will "sell" Venezuelan oil and demands that Venezuela cut economic ties with China and Russia; China's Ministry of Foreign Affairs responded: a typical act of bullying.

Precious metals collectively plunged, and the key commodity index will begin rebalancing on Thursday.

The U.S. "small non-farm" December ADP employment increased by 41,000, reversing the decline in November but below the expected growth; U.S. November JOLTS job openings fell to a more than one-year low, for the first time in four years being less than the number of unemployed, indicating a slowdown in hiring; U.S. December ISM services PMI at 54.4 hit a more than one-year high, with robust demand and a recovery in hiring.

The U.S. claims to have detained two oil tankers, one of which was flying the Russian flag; the Russian Ministry of Transport confirmed that U.S. military personnel boarded the ship, stating they lost contact with the "Marinella"; Russia condemned the U.S. for detaining the Russian oil tanker, demanding that Russian citizens be treated humanely White House: Crew members on the detained oil tanker may be brought to the U.S. for trial.

Trump claims Venezuela will deliver 30-50 million barrels of sanctioned oil to the U.S.; the White House states that the U.S. has begun a global sale of Venezuelan oil, and U.S. Energy Secretary says they will "indefinitely" control the sale of Venezuelan oil.

Trump states that the U.S. military budget should be $1.5 trillion in 2027.

"First stock of large models" Zhizhu AI has received over a thousand times subscription in its public offering in Hong Kong, with an issue price of HKD 116.20, set to debut on the Hong Kong stock market on Thursday; another large model unicorn MiniMax is reportedly going public in Hong Kong at a high valuation, with an issuance valuation exceeding HKD 46 billion.

Kunlun Core is sprinting for a Hong Kong IPO, reportedly raising up to $2 billion.

Gemini TV debuts at CES, with Google firing the first shot in the living room revolution.

Musk agrees with TSMC's concerns about chip oversupply, stating that power liquid cooling cannot keep up; Musk's vision for 2026: we are at a "technological singularity," AI and robotics are unstoppable, with short-term turbulence and challenges, and a long-term era of abundance.

Market Closing Report

U.S. and European Stock Markets: S&P 500 fell 0.34%, closing at 6920.93 points; Dow Jones fell 0.94%, closing at 48996.08 points; Nasdaq rose 0.16%, closing at 23584.275 points. The European STOXX 600 index fell 0.05%, closing at 604.99 points.

A-shares: Shanghai Composite Index rose 0.05%, closing at 4085.77 points. Shenzhen Component Index rose 0.06%, closing at 14030.56 points. ChiNext Index rose 0.31%, closing at 3329.69 points.

Bond Market: By the end of the bond market, the yield on the U.S. ten-year benchmark Treasury bond was about 4.15%, down about 2 basis points during the day; the two-year U.S. Treasury yield was about 3.47%, up about 1 basis point during the day.

Commodities: WTI February crude oil futures fell 2%, closing at $55.99 per barrel; Brent March crude oil futures fell 1.22%, closing at $59.96 per barrel. COMEX February gold futures fell 0.75%, closing at $4462.5 per ounce. COMEX March silver futures fell 4.23%, closing at $77.613 per ounce. LME copper futures fell nearly 2.6%, closing at $12900 per ton. LME nickel futures fell about 3.4%, closing at $17895 per ton.

Key News Details

Global Highlights China's foreign exchange reserves increased by 0.34% month-on-month in December, the People's Bank of China has increased its gold holdings for 14 consecutive months. As of the end of December 2025, China's foreign exchange reserves stood at USD 335.79 billion, an increase of USD 11.5 billion from the end of November, representing a rise of 0.34%. Data from the People's Bank of China shows that the gold reserves at the end of December were reported at 74.15 million ounces (approximately 2,306.323 tons), an increase of 30,000 ounces (approximately 0.93 tons) month-on-month.

Eight departments: Accelerate the upgrade of smart terminals, by 2027, China’s key core technologies in artificial intelligence will achieve safe and reliable supply. The Ministry of Industry and Information Technology and seven other departments issued the "Implementation Opinions on the Special Action of 'Artificial Intelligence + Manufacturing'," promoting the deep application of 3-5 general large models in the manufacturing industry, forming specialized and comprehensive industry large models, creating 100 high-quality datasets in industrial fields, and promoting 500 typical application scenarios. Cultivate 2-3 globally influential ecosystem-leading enterprises and a batch of specialized, refined, and innovative small and medium-sized enterprises, build a group of empowering application service providers that "understand intelligence and are familiar with the industry," and select 1,000 benchmark enterprises. Establish a globally leading open-source open ecosystem, comprehensively enhance security governance capabilities, and contribute Chinese solutions to the development of artificial intelligence.

The U.S. will "sell" Venezuelan oil, and demands Venezuela cut economic ties with China and Russia, China's Ministry of Foreign Affairs responds: a typical act of bullying. According to Shangguan News, the Ministry of Foreign Affairs stated that Venezuela is a sovereign country with full permanent sovereignty over its natural resources and all economic activities. The U.S. brazenly uses force against Venezuela and demands that Venezuela prioritize "America First" when handling its own oil resources, which is a typical act of bullying, seriously violating international law, severely infringing on Venezuela's sovereignty, and seriously harming the rights of the Venezuelan people. China strongly condemns this.

Precious metals collectively plummet, key commodity index rebalancing begins Thursday. Spot gold once fell below the USD 4,450 per ounce mark, and spot silver saw a daily decline of over 3%. Spot platinum dropped more than 7%, and spot palladium fell over 5%. The Bloomberg Commodity Index will undergo annual weight rebalancing from January 8 to 14, with passive funds triggering "technical sell-offs" leading to liquidity shocks. Silver faces a massive selling pressure of 9% of total holdings, while gold shows bearish reversal signals technically, facing a severe liquidity test after the commodity frenzy.

The "little non-farm" shows a mild recovery, U.S. ADP employment increased by 41,000 in December, reversing the decline in November but below the expected growth rate In December, the ADP employment figures in the United States showed moderate growth, with labor demand remaining weak. The increase in private sector employment in December was below economists' expectations by 50,000.

In November, JOLTS job openings in the U.S. fell to a more than one-year low, for the first time in four years being less than the number of unemployed. The number of job openings in November decreased from the revised 7.45 million in the previous month to 7.146 million, significantly below expectations. The number of job openings per unemployed person fell to 0.9, the lowest level since March 2021, and for the first time in four years, it was below the 1.0 mark. Hiring numbers dropped to the lowest level since mid-2024.

In December, ISM Services PMI in the U.S. reached 54.4, a new high in over a year, with robust demand and a rebound in hiring. The ISM Services PMI index in the U.S. rose by 1.8 points to 54.4, the highest level since October 2024. The increase in new orders was the largest since September 2024, with demand recovery driving the healthiest growth in service employment since February, and the pace of price increases slowed to the slowest in nine months.

The U.S. claims to have seized two oil tankers, one of which was flying the Russian flag. The Russian Ministry of Transport confirmed that U.S. military personnel boarded the ship, stating that contact with the "Marinella" had been lost. The Russian side condemned the U.S. for seizing the Russian oil tanker, demanding that Russian citizens be treated humanely.

• The White House: Crew members on the seized oil tanker may be brought to the U.S. for trial. White House Press Secretary Levitt stated at a press conference that the U.S. government would continue to impose sanctions on all vessels that it claims are "illegally transporting oil." Crew members on the seized tanker may face prosecution for violating federal laws and could be brought to the U.S. for trial.
• A "great escape" across the ocean! The oil tanker has "renounced" its nationality to Russia and has been pursued by the U.S. military for 18 days, with the Russian side dispatching submarines and other naval escorts! The U.S. Air and Naval Forces have mobilized heavily; are they trying to capture the tanker or is it a diversion? According to Daily Economic News, an oil tanker under U.S. sanctions that changed its flag to Russia is being escorted by the Russian Navy in the North Atlantic, prompting the U.S. military to deploy special forces and heavy attack aircraft. This military mobilization far exceeds conventional maritime law enforcement, raising speculation about the U.S. military possibly preparing for a larger-scale military operation.

Trump claims Venezuela will deliver 30-50 million barrels of sanctioned oil to the U.S.. This oil will be sold at market prices, and the funds will be overseen by Trump to ensure they are used to "benefit the people of Venezuela and the people of the United States."

• The White House claims the U.S. has begun a global sale of Venezuelan oil, with the U.S. Energy Secretary stating that it will “indefinitely” control the sale of Venezuelan oil. White House Press Secretary Levitt stated that the U.S. estimates there are 30 to 50 million barrels of sanctioned Venezuelan oil stockpiled, which will “soon” arrive in the U.S. The proceeds from the oil sales will first be deposited into bank accounts controlled by the U.S., with the funds to be decided by the U.S. government for the benefit of the people of both the U.S. and Venezuela. U.S. Energy Secretary Wright stated that the U.S. only wants to control the flow of funds, not seize Venezuelan oil.
• Chevron urgently dispatches 11 oil tankers to bring Venezuelan crude back to the U.S.. Under the framework of “Trumpism,” the U.S. accelerates the monetization of Venezuela's energy interests through direct intervention. Vessel dynamics show that one of the 11 tankers chartered by Chevron has completed loading, while two others are currently docked. As a result, international oil prices have fallen due to reduced supply risks. Analysts predict that if Venezuelan production rises to 1.3 million barrels per day, it will continue to pressure oil prices, but infrastructure repairs will still require huge investments and long-term construction.

Trump states that the U.S. military budget should be $1.5 trillion by 2027. Trump stated that if it weren't for the “huge revenue” from tariffs imposed by other countries, he would have maintained a budget of $1 trillion. However, due to tariffs and the revenue generated from them, they are now able to easily reach a budget of $1.5 trillion.

Venezuelan stock market surges 50% in a single day! Does the “political upheaval” trigger a capital frenzy? Since President Maduro was taken out of Venezuela, the country's stock market has risen by 74%, with market focus concentrated on oil, infrastructure, and financial services. Investor optimism is mainly boosted by the Trump administration's proposed $100 billion oil revival plan, with market expectations that Venezuela will shake off long-term sanctions and achieve economic normalization.

“The first stock of large models” Zhipu AI's public offering in Hong Kong received over a thousand times subscription, with an issue price of HKD 116.20, set to debut on the Hong Kong stock market on Thursday. Zhipu AI will debut on the Hong Kong stock market on Thursday, January 8, with an issue price of HKD 116.2, and the public offering in Hong Kong received 1159.46 times subscription, with a nearly 38% increase in the dark market on Wednesday. This IPO raised approximately HKD 4.17 billion. The company has its own GLM technology system, with revenue of 191 million yuan in the first half of 2025 and a loss of up to 2.358 billion yuan.

• Another major model unicorn MiniMax reportedly IPOs in Hong Kong at a high price, with an issuance valuation exceeding HKD 46 billion. It is reported that MiniMax will issue 29.2 million shares at a price of HKD 165 per share, The company exercised a 15% adjustment right on the offering amount. According to Bloomberg's calculations, this IPO will raise HKD 4.82 billion (approximately USD 619 million), and the company will be listed on January 9.

Kunlun Core rushes for Hong Kong IPO, reportedly raising up to USD 2 billion. Kunlun Core, an AI chip company under Baidu, has initiated its IPO in Hong Kong, with insiders revealing plans to raise up to USD 2 billion. The company has achieved large-scale deployment in fields such as the internet and finance, securing significant orders from companies like China Mobile. It is expected to reach approximately RMB 5 billion in revenue by 2025, positioning itself among the leading domestic chip manufacturers, and its listing marks an acceleration in the localization of AI computing power.

Gemini TV debuts at CES, Google fires the first shot in the living room revolution. At CES 2026, Google launched a smart TV equipped with Gemini AI. This TV can not only search for content, provide personalized recommendations, and assist with learning through natural language conversations but also serve as a control center to link all smart home devices.

Is TSMC worried about chip oversupply? Musk: Theyare right**, power and liquid cooling can't keep up**. Musk agrees with TSMC's concerns about chip capacity oversupply. He pointed out that the core bottleneck in AI development is shifting from chip manufacturing to "chip startup" capabilities, namely the deployment progress of power, transformers, and cooling systems. Currently, the linear expansion speed of these infrastructures is severely lagging behind the exponential growth of chip capacity.

Musk's 2026 vision: We are at a "technological singularity," AI and robots are unstoppable, short-term turbulence and challenges, long-term a prosperous era. Musk presented a significant timeline: AGI will be realized in 2026, and humanity is experiencing a "technological singularity" moment akin to a "supersonic tsunami." He predicts that white-collar workers and surgeons will be replaced by AI, and society will transition through turbulence to an era of "universal high income" and extreme abundance. He praised China's energy infrastructure, noting that computing power "watts" may become a new currency, and the deployment of computing power will leap to interstellar orbits.

Research Report Highlights

Goldman Sachs remains optimistic about the Chinese stock market: AI and overseas expansion support profits, MSCI China is expected to rise 20% this year. Goldman Sachs is bullish on the Chinese stock market in 2026, predicting that MSCI China and the CSI 300 will rise by 20% and 12%, respectively. The market is shifting from valuation recovery to profit-driven growth, with corporate profits expected to accelerate from 4% to 14% driven by AI commercialization, overseas expansion, and anti-involution policies, with TMT profit growth around 20%. The funding situation is strong, with southbound capital potentially reaching USD 200 billion, and domestic reallocation could bring an additional RMB 3 trillion Goldman Sachs significantly raises PCB market size expectations: both volume and price rise + specification upgrades, with a compound growth rate expected to exceed 140% in the next two years! Goldman Sachs' latest research report shows that the PCB market for AI servers is experiencing a structural opportunity with rising volume and price, expecting the TAM to reach $26.6 billion and $18.3 billion by 2027, primarily driven by NVIDIA's new generation architecture (such as VR200/300 racks) replacing cables with high-value PCBs. Specification upgrades and declining yields are jointly driving the unit value and raw material demand, continuously benefiting high-end PCB/CCL suppliers.

CoWoS capacity support, JP Morgan again raises TPU expectations: shipments are expected to reach 3.7 million and 5 million units in the next two years. JP Morgan has raised its CoWoS capacity forecasts for 2026 and 2027 by 8% and 13%, respectively, with TSMC's CoWoS capacity expected to reach 115,000 wafers/month by the end of 2026. The continuous expansion of capacity will provide solid support for TPU shipment growth.

Domestic Macro

Foreign media: Canadian Prime Minister's Office announces that Prime Minister Carney will visit China next week. According to Global Times, the Canadian Prime Minister's Office announced on the 7th local time that Prime Minister Carney will visit China from the 13th to the 17th. This visit marks the first visit by a Canadian Prime Minister to China since December 2017. The Canadian Prime Minister's Office stated that Carney will discuss topics such as trade, energy, agriculture, and international security with the Chinese side during his visit.

Ministry of Industry and Information Technology: Explore the path of building a "model pool" relying on industrial internet platforms, cultivating and launching a batch of industrial model products. It proposes to improve the intelligence level of industrial internet platforms. Based on deep learning, large models, and other technologies, it aims to strengthen the capabilities of element connection, intelligent analysis, and resource allocation on industrial internet platforms. It encourages industrial internet platform companies to accelerate innovation in low-code and no-code technologies based on artificial intelligence, enhancing the efficiency of industrial APP development and system integration capabilities. By 2028, it aims to promote the implementation of new industrial network transformation and upgrades for no less than 50,000 enterprises.

Domestic Companies

The first AI unicorn among central enterprises emerges, backed by self-developed large models and endorsed by four national team capitals. China Telecom's AI company has introduced national-level strategic investment, becoming the first AI unicorn among central enterprises, completing a key leap from technology self-research to market recognition. With its self-developed "Star" series large models and strong industry implementation capabilities, it is leveraging the rich scenarios of telecommunications to accelerate the autonomous control and large-scale application of AI technology with a long-term strategy Shanghai Micro Electronics, latest capital operations. According to Shanghai Securities News, there has been asset consolidation in the domestic lithography machine sector: Shanghai Micro Electronics' subsidiary, Chip-On-Micro, has fully acquired Weiyao Industrial, further clarifying its positioning. The company focuses on packaging lithography machines and other equipment, having delivered its 500th stepper lithography machine and successfully developed its first 350nm stepper lithography machine independently.

"Yizhongtian" continues to surge behind the computing power revolution: silicon photonics is no longer a substitute, but a new king to be established. Guosheng Securities believes that silicon photonics is expected to break through the "power wall" and "size wall" faced by traditional optical modules. Behind the silicon photonics revolution, the core profits of the value chain are also shifting from upstream optoelectronic chips to midstream PIC design (silicon photonics chip design). This will greatly enhance the profit levels and voice of Chinese optical communication manufacturers in the global industrial chain.

Overseas Macro

The "New Monroe Doctrine" of the United States, more "America First" and more nakedly hegemonic than the old version. According to Global Times, the commentary believes that the Trump administration has upgraded "Monroe Doctrine" to "Tang Doctrine," officially declaring the Western Hemisphere as the "core interest zone" of the United States in its national security strategy report, authorizing the use of military force for direct intervention. From attacking Venezuela to threatening Colombia and Mexico, the U.S. has blatantly transformed "America for Americans" into "America for Americans."

Trump claims he will ban institutional investors from purchasing single-family homes, Blackstone drops 9.3%. After Trump stated he would "immediately take action to prohibit large institutional investors from continuing to purchase single-family homes" to promote housing affordability, Blackstone's stock price plummeted by 9.3% at one point, before narrowing some of its losses. Blackstone is a significant investor in the residential real estate sector. Residential rental company American Homes 4 Rent fell 11%, Invitation Homes Inc. dropped 10%, and building materials company Builders FirstSource Inc. fell over 5%. The S&P Homebuilding Index briefly declined by 2.2%, with 15 of its 18 constituent stocks falling.

Goldman Sachs strategist: Beware of "high valuation, high concentration, high growth" in U.S. stocks, historically often ending in a big drop. Goldman Sachs' Snider predicts that the S&P 500 will rise to 7600 points, but simultaneously issues a stern warning: the current 22 times price-to-earnings ratio is approaching the peak of the 2000 bubble, with the top ten stocks accounting for 41% of market value. This "high valuation + extreme concentration" combination is similar to previous crashes in 1929 and 2000. The greater risk lies in the surge in AI capital expenditures; however, despite the rampant bubble theory, the market has not yet shown signs of extreme irrational exuberance Eurozone December CPI slows to 2%, market expects ECB to remain "on hold" for a long time. The inflation rate in the Eurozone has fallen to the European Central Bank's target of 2% in December, with core inflation also continuing to slow, reinforcing market expectations that interest rates will remain unchanged at current levels. Although there are still pressures from service inflation and wage growth, unless there is a significant change in the economic outlook, the European Central Bank is expected to maintain its policy unchanged for the foreseeable future, with only a slight increase in market bets on interest rate cuts.

Overseas Companies

Storage chip prices out of control! Wall Street revises expectations: DRAM may soar 88% in 2026, NAND up 74%. Considering the proliferation of AI Agents and the surge in demand for AI CPU memory, Citigroup has raised its average selling price (ASP) forecast for server DRAM to an increase of 144%, expecting enterprise-level SSD ASP to rise by 87% year-on-year. Analysts believe the market will enter an extremely fierce seller's market, with pricing power completely in the hands of storage giants like Samsung.

Morgan Stanley survey: Memory prices soar, Android and PC face impact, but Apple won't raise prices this year. Morgan Stanley believes that pressure from storage costs will lead most OEM manufacturers to significantly raise prices in the first half of 2026, potentially causing a decline in annual shipments of Android phones and Windows PCs. However, Apple is expected to achieve market share growth for iPhones and Macs in 2026 due to locking in more favorable memory prices in advance, keeping product pricing unchanged. Additionally, the shortage of hard disk supplies is worsening, with the supply-demand gap expected to widen to 200EB in the next 12 months. Server manufacturers like Dell and HP may soon initiate large-scale layoffs to protect operating profit margins.

Samsung warns: Memory costs soar, all electronic products face price increases. Samsung Electronics, the world's largest memory chip maker, has warned that semiconductor supply issues will affect everyone, and component costs are rising. Although Samsung is trying to avoid passing on costs, it has to consider repricing across its entire product line. This indicates that a wide range of electronic consumer goods, from smartphones and laptops to connected home appliances, may face a wave of price increases.

Reports say Anthropic plans to raise $10 billion at a $350 billion pre-money valuation, nearly doubling in four months! According to media reports, Anthropic plans to raise $10 billion at a pre-money valuation of $350 billion, almost double its valuation from four months ago. Sources say that Singapore's sovereign wealth fund GIC and Coatue Management plan to lead this round of financing Elon Musk Reveals: Once Pushed OpenAI to Choose Microsoft Over Amazon for Collaboration, Bezos a Bit "Clever". In 2016, Musk suggested to OpenAI co-founder Sam Altman to prioritize Microsoft over Amazon as a cloud service partner, and in an email, he commented that Amazon CEO Bezos was "a bit clever." Altman also criticized Amazon's terms as harsh and its technology as subpar in his reply.

Today's News Preview

U.S. initial jobless claims from last week.

U.S. trade balance for October.

Eurozone PPI for November.

Bloomberg Commodity Index rebalancing.

Zhizhu Hong Kong IPO. Tianshu Zhixin Hong Kong IPO