Breakfast | Three major U.S. stock indices rise, S&P and Dow hit all-time highs

Market Overview

Driven by AI-related demand, the three major U.S. stock indices continued to rise, with the S&P and Dow Jones both reaching all-time highs; Amazon rose over 3%, while Tesla fell more than 4%; chip stocks saw three consecutive days of gains, closing up nearly 3%, with Micron Technology, which raised its third-quarter revenue guidance, rising 10%, while NVIDIA fell for two consecutive days; after Jensen Huang expressed optimism about AI systems boosting storage demand, storage chip stock SanDisk surged nearly 28%; after Huang stated that the Rubin rack does not require a chiller, cooling equipment manufacturers generally fell, with Johnson Controls dropping over 6%.

The pan-European stock index has set historical highs for three consecutive days.

U.S. Treasury prices slightly retreated. The U.S. dollar index rebounded, approaching a three-week high, while the British pound turned down after reaching a three-month high. The offshore yuan rose nearly 100 points during the day, re-establishing itself above 6.98; cryptocurrencies saw a pullback, with Bitcoin dropping over 3% from its daily high, falling below $92,000.

Metal frenzy continues: Gold reached a one-week high during the day, with futures rising over 1%; silver rose over 6%, nearing last week's record high; London copper rose over 3% during the day, closing above $13,000 for the first time, setting historical highs for two consecutive days; London nickel surged over 10%, marking the largest increase in over three years. Shanghai nickel closed at the limit up in night trading.

Crude oil fell to a one-week low, dropping over 2% during the day.

In the Asian session, the Shanghai Composite Index refreshed a ten-year high, setting the longest consecutive gain record in history, with a new surge in commercial space, the Hang Seng Index rising over 2%, and non-ferrous metals soaring, with Shanghai silver rising over 8% during the day. Asian stock markets welcomed the strongest annual start in history, with both Japanese and South Korean markets soaring.

Key News

Takashi Kawamura hinted at possible military intervention in the Taiwan Strait, China's Ministry of Commerce: prohibiting the export of dual-use items to Japanese military users.

The People's Bank of China has clarified its key work for 2026: to strengthen counter-cyclical and cross-cyclical adjustments, flexibly and efficiently utilizing various monetary policy tools such as reserve requirement ratio cuts and interest rate reductions.

Reports: The Trump administration is discussing plans to acquire Greenland, including military options.

The U.S. Supreme Court may rule on tariff issues this Friday.

Disagreements persist within the Federal Reserve, with Barkin emphasizing "fine-tuning," while Milan stated that interest rates should be cut by more than 100 basis points this year.

The "Willingness Alliance" has reached a consensus, with the UK and France planning to deploy troops to Ukraine after a peace agreement is reached between Russia and Ukraine.

Venezuela's Attorney General emphasized that Maduro enjoys absolute immunity, while the acting president stated that Venezuela is not under the control of external forces.

NVIDIA's CFO stated that by the end of 2026, data center chip revenue will "definitely" exceed the $500 billion predicted last October, with Jensen Huang noting strong demand from Chinese customers.

In response to NVIDIA, AMD launched the MI440X at CES, targeting the enterprise-level AI data center market; Intel unveiled key AI PC chips at CES: debuting the 18A process with a 60% performance increase, marking a "strategic turning point" for the company

Market Report

US and European Stock Markets: The S&P 500 rose 0.62% to 6944.82 points; the Dow Jones increased by 0.99% to 49462.08 points; the Nasdaq gained 0.65% to 23547.173 points. The European STOXX 600 index rose 0.58% to 605.28 points.

A-shares: The Shanghai Composite Index rose 1.50% to 4083.67 points. The Shenzhen Component Index increased by 1.40% to 14022.55 points. The ChiNext Index rose 0.75% to 3319.29 points.

Bond Market: At the end of the bond market, the yield on the US ten-year benchmark Treasury bond was about 4.17%, up about 1 basis point during the day; the two-year Treasury yield was about 3.46%, also up about 1 basis point during the day.

Commodities: WTI February crude oil futures fell 2.04% to $57.13 per barrel; Brent March crude oil futures fell 1.77% to $60.70 per barrel. COMEX February gold futures rose 1% to $4496.1 per ounce. COMEX March silver futures rose 5.72% to $81.039 per ounce. LME copper futures rose about 1.9% to $13238 per ton. LME nickel futures rose nearly 9% to $18524 per ton.

News Details

Global Highlights

High-ranking official suggests possible military intervention in the Taiwan Strait, China's Ministry of Commerce: prohibits the export of dual-use items to Japanese military users. According to Shangguan News, China has decided to prohibit all dual-use items from being exported to Japanese military users, military purposes, and any other end-user purposes that help enhance Japan's military capabilities. Any organization or individual from any country or region that violates the above regulations by transferring or providing relevant dual-use items originating from the People's Republic of China to organizations or individuals in Japan will be held legally accountable.

The People's Bank of China clarifies key tasks for 2026: Increase counter-cyclical and cross-cyclical adjustment efforts, flexibly and efficiently use various monetary policy tools such as reserve requirement ratio cuts and interest rate reductions. The meeting emphasized that promoting high-quality economic development and a reasonable rebound in prices should be important considerations for monetary policy, flexibly and efficiently using various monetary policy tools such as reserve requirement ratio cuts and interest rate reductions. Establish a mechanism for providing liquidity to non-bank institutions under specific scenarios, and effectively utilize two monetary policy tools that support the capital market. Strengthen financial market regulatory enforcement and continue to crack down on illegal activities in the financial market. Strengthen regulation of virtual currencies and continue to combat related illegal activities Steadily develop the digital renminbi.

Report: The Trump administration is discussing plans to acquire Greenland, including military options. According to CCTV News, U.S. officials stated that the Trump administration is discussing plans to acquire Greenland, including purchasing the territory from Denmark and establishing a free association agreement with Greenland, with military means also listed as one of the options.

• Leaders of the G7 countries, including the UK, France, Germany, and Italy, issue a joint statement: Greenland belongs to its people. According to Global Times, U.S. President Trump stated in a phone interview with The Atlantic on the 4th that Venezuela may not be the last country the U.S. intervenes in, and claimed, "We absolutely need Greenland." The G7 leaders stated in their statement that Arctic security remains a key priority for Europe, crucial for international security and transatlantic security, and must be achieved through joint efforts with NATO allies, including the U.S., by upholding the principles of the United Nations Charter, including sovereignty, territorial integrity, and inviolability of borders. "These are universally applicable principles, and we will continue to defend them," the statement said.
• Trump's next target? Danish Prime Minister: If the U.S. "forcibly takes" Greenland, it means the end of NATO. Trump stated that the U.S. "absolutely needs Greenland" and provided a timeline: "We'll consider Greenland again in about two months. Let's talk about Greenland in 20 days." Danish Prime Minister Frederiksen warned that if the U.S. chooses to launch a military attack on another NATO country, everything will come to an end, including NATO and the security system established since the end of World War II.

Keep an eye on this Friday, the U.S. Supreme Court may rule on tariff issues. The U.S. Supreme Court has set January 9th, Friday, as the opinion release date, meaning the court may rule on the legality of President Trump's global tariff policy that day.

Disagreements persist at the Federal Reserve, Barkin emphasizes "fine-tuning," Milan states that interest rates should be cut by more than 100 basis points this year. Federal Reserve officials are sending mixed signals about the future path of interest rates. Richmond Fed President Barkin emphasized that policy is in a "delicate balance" to address rising inflation and unemployment rates, and that interest rates have reached neutral levels. Meanwhile, Fed Governor Milan stated that data supports further rate cuts, which may exceed 100 basis points this year.

The "Willing Alliance" reaches a consensus, the UK and France will deploy troops to Ukraine after a peace agreement is reached between Russia and Ukraine UK Prime Minister Keir Starmer, French President Emmanuel Macron, and Ukrainian President Volodymyr Zelensky attended the "Alliance of Will" meeting to aid Ukraine in Paris on Tuesday, signing a letter of intent. If a peace agreement is reached between Russia and Ukraine, the UK and France will deploy troops to Ukraine.

Venezuelan Attorney General emphasizes Maduro enjoys absolute immunity, acting president claims Venezuela is not under external control. Venezuelan Attorney General Tarek William Saab stated that the current head of state enjoys absolute personal immunity. This is not only a personal right but also a constitutional principle with universal effect and a fundamental norm of international law; forcibly taking, kidnapping, and illegally depriving President Maduro and his wife of their freedom within Venezuela and taking them to another country constitutes international kidnapping and illegal deprivation of freedom, reflecting state terrorism. The Venezuelan National Guard stated that it has deployed troops nationwide.

Metal Carnival! During trading, London nickel rose over 10%, New York silver rose over 6%, and London copper hit a new historical high. London nickel saw its largest intraday increase in over three years, with Chinese buying driving nickel prices up over 20% in two weeks. Shanghai nickel closed at the daily limit. On Monday, London copper broke the $13,000 mark for the first time in history during trading, rising over 3% on Tuesday, as market expectations of increased tariffs in the U.S. led to inventories being "locked in the U.S." Futures silver surged due to the entry of Chinese retail investors. Geopolitical risks and expectations of interest rate cuts resonated, with New York gold futures rising over 1% during trading, approaching the highest record set before Christmas.

$500 billion revenue forecast too conservative! Nvidia's CFO says "definitely higher", Jensen Huang states strong demand from Chinese customers. Nvidia CFO Kress stated that since providing the $500 billion forecast for existing and future data center chip revenue in October 2025, interest from Nvidia's customers has continued to increase; the company's optimistic expectations for AI applications come not only from AI demand itself but also from the growing demand for enterprise data processing driving the next generation of computing needs.

• Full text of Jensen Huang's CES speech: Rubin fully in production, computing power surges 5 times, breaking down the barriers of intelligent driving, All in the physical world. Nvidia's Vera Rubin platform is fully in production, enhancing AI inference performance by 5 times and reducing costs to 1/10 through "extreme collaborative design," directly addressing the pain points of intelligent agents "not being able to compute or remember." Jensen Huang announced that AI has entered the second half of "thinking," proclaiming that "the moment of physical AI's ChatGPT is near." Through the open-source intelligent driving model Alpamayo and collaboration with Siemens, Nvidia showcased a full-stack puzzle from chips to robots
• NVIDIA wants to be the "Android" of "Physical AI". NVIDIA released multiple open-source robotic foundational models at CES 2026, including the world model Cosmos series and the humanoid robot-specific model Isaac GR00T. By utilizing the open-source simulation framework Isaac Lab-Arena and deepening collaboration with Hugging Face, NVIDIA is building a complete ecosystem aimed at becoming the default platform in the robotics field, replicating Android's dominance in smartphones and driving AI from the cloud to the physical world.
• Did NVIDIA create an FSD? Musk calmly responds: I won't lose sleep over it. NVIDIA unveiled the open-source autonomous driving model Alpamayo at CES, claiming it to be the "ChatGPT moment for Physical AI," set to hit the road with the Mercedes-Benz CLA in the first quarter. In response to this strong competitor that can "think and reason," Musk stated that solving the long tail problem is key and bluntly said, "I won't lose sleep over this; I genuinely hope they succeed."
• Jensen Huang claims no need to rely on chillers, cooling equipment stocks plummet 20%. Jensen Huang stated that server racks equipped with the next-generation NVIDIA Rubin chip support liquid cooling without relying on chillers. On Tuesday, related concept stocks in data center cooling equipment saw a broad decline. Johnson Controls' stock price plummeted 11% at one point, marking the largest intraday drop since 2022. Modine Manufacturing's decline narrowed after initially dropping about 21%.

Dr. Lisa Su's full CES speech: The era of Yao bytes has arrived, Helios debuts, "In the next four years, we aim for a 1000-fold increase in AI performance"! Dr. Lisa Su brought AMD's "AI full stack" to CES, boldly declaring the start of the "Yao byte-level computing era"! To support the future demand of 5 billion users, AMD unveiled the "computing monster" Helios platform, pledging a 1000-fold increase in chip performance within four years. With new consumer products outpacing Intel in computing power, AMD is breaking through on dual fronts in the cloud, sparking a new round of global computing power competition.

• In response to NVIDIA, AMD launches MI440X to seize the enterprise AI data center market. AMD released the MI440X chip aimed at enterprise data centers at CES and showcased the high-end Helios system, forecasting that the MI500 series, set to launch in 2027, will achieve 1000 times the performance of 2023's flagship products. CEO Dr. Lisa Su appeared alongside OpenAI co-founder, emphasizing that computing power demand is far from satisfied, aiming to further break NVIDIA's market monopoly and compete for billions of dollars in AI hardware orders Intel CES Releases Key AI PC Chip: 18A Process Debut + 60% Performance Improvement, Company to Welcome "Strategic Turning Point". Intel officially launched the AI PC chip Panther Lake based on the 18A process, marking the large-scale production of this advanced process, with a 60% performance improvement over the previous generation. Laptops equipped with this chip will start pre-orders on January 7 and will be globally launched on January 27. CEO Chen Liwu stated that the company has fulfilled its promise to deliver 18A products by 2025, and Senior Vice President Jim Johnson indicated that 2026 will be a "strategic turning point for the entire industry and the company."

Research Report Highlights

Dalio's Annual Review: Depreciation of the Dollar and Other Fiat Currencies, US Stocks' High Returns are Just "Valuation Illusions," Gold Outperforms Everything. In his 2025 review, Dalio stated that the 18% increase in US stocks is actually a "valuation illusion" under the depreciation of fiat currencies, with a real decline of 28% when priced in gold. Gold has established its position as a value anchor and reserve asset with a 39% increase. He warned that current US stock valuations are extremely stretched, and the social crisis caused by imbalanced profit distribution is quietly accumulating, with foreign capital shifting to non-US markets and physical assets due to geopolitical issues and unilateralism.

Current Commodity Trading Two Main Lines—"De-Dollarization" Buying Gold, "Strong Security" Buying Metals. Zheshang Securities believes that geopolitical risks and de-dollarization are reshaping the commodity cycle. The core trading logic is divided into two main lines: first, gold is replacing the dollar as the central bank reserve anchor, with 95% of central banks expected to continue increasing their holdings, supporting gold prices to shift from being driven by real interest rates to being dominated by geopolitical premiums; second, the strategic stockpiling of materials triggered by "strong security" is driving the revaluation of military metals. By 2025, tungsten and cobalt are expected to increase by 229% and 120%, respectively.

Domestic Macro

Li Qiang Meets with South Korean President Lee Jae-myung. According to Xinhua News Agency, on the morning of January 6, Premier Li Qiang met with South Korean President Lee Jae-myung, who is on a state visit to China, at the Diaoyutai State Guesthouse in Beijing. The Chinese side is willing to strengthen market openness and connectivity with the South Korean side, actively promote cooperation in emerging fields such as high-end manufacturing, artificial intelligence, and new energy, deepen industrial integration, and jointly cultivate new development momentum. The Chinese side welcomes South Korean enterprises to expand their investment in China and hopes the South Korean side will provide convenience for Chinese enterprises investing in South Korea.

BofA Optimistic About Chinese Consumer Stocks for Three Main Reasons: Low Base, Deeply Undervalued, "Convertible Bond-like" Defense. BofA's latest report clearly points out its optimism about the Chinese consumer sector based on three core logics: the low base effect provides a window for performance recovery in 2026; valuations have fallen to historical lows, premiums have nearly disappeared, and institutional allocation is extremely low, opening up space for contrarian positioning; Assets exhibit "convertible bond-like" characteristics, leading companies have stable cash flows, high dividends and buybacks provide price protection, while also possessing downside defense and future valuation recovery elasticity.

Domestic Companies

Brain-computer interface "unicorn" QiangNiao Technology completes 2 billion yuan financing, second only to Musk's Neuralink. QiangNiao Technology's nearly 2 billion yuan financing was backed by top financial capital and industry giants like Lens Technology, marking that brain-computer interface technology has crossed the laboratory stage and is accelerating towards large-scale production and commercialization. As a result, the capital market reacted strongly, with related concept stocks continuing to rise, and the industry is accelerating its transition from laboratory research and development to mass production and commercialization.

KeLing AI makes a splash overseas in the New Year, JP Morgan: We reiterate that Kuaishou is one of the cheapest AI stocks globally. Due to the "pet dancing" videos going viral in overseas markets during the New Year, KeLing AI's mobile revenue surged. Data shows that in January 2026, KeLing AI's mobile platform daily revenue skyrocketed by 102% compared to December 2025, with revenue in the South Korean market increasing 13 times. JP Morgan analysts reaffirmed their optimistic view on Kuaishou, believing that the current valuation corresponds to only 12 times the expected price-to-earnings ratio for 2026, while the compound annual growth rate of profits from 2026 to 2027 is expected to reach 21%, making it one of the most undervalued AI stocks globally.

Overseas Macro

One month before Maduro was forcibly controlled, Trump had "leaked" to oil tycoons: Be prepared. A month before Trump's "lightning strike" on Venezuela, he had hinted to U.S. oil executives to "be prepared," but did not disclose the details of the action. After the action, the White House announced an ambitious energy revival plan, calling for U.S. companies to invest billions of dollars to transform Venezuela's oil fields. However, oil giants including Chevron and ExxonMobil took a cautious stance, citing political stability and capital safety as reasons for inaction.

• After months of lobbying in the oil industry, it finally came true! Trump supports Maduro's deputy taking over Venezuela: She knows oil best. According to CCTV News, on January 5 local time, Venezuelan Vice President Delcy Rodriguez was sworn in as the acting president of Venezuela. Oil giants and creditors are betting on her, hoping that her deep oil background and administrative control can revitalize energy exports and promote a debt restructuring of about 60 billion dollars. Companies like Chevron may become the biggest beneficiaries.

Focus on Friday's non-farm payrolls, key factor for Fed's January rate cut: Unemployment rate rises to 4.7%. Citigroup predicts that the U.S. unemployment rate may rise to 4.7% in December, prompting the Federal Reserve to cut rates by 25 basis points this month. With the labor market weakening and inflation cooling, the baseline forecast for actual rate cuts this year is 75 basis points, with the possibility of exceeding 100 basis points not ruled out AI Creates the Strongest Moat in History? JP Morgan Asset Management: Two Mid-term Risks Hide a Liquidation Crisis. JP Morgan Asset Management warns that the prosperity of the US stock market is entirely dominated by generative AI, with its earnings and growth highly concentrated among a few giants, showing unprecedented levels of concentration and dependency. However, the trillion-dollar capital expenditure supporting this prosperity is facing two major "hard constraints": uncertainty in profit returns and bottlenecks in US power infrastructure. If expectations fall short, the market will face severe liquidation risks.

UBS: Volatility Soars, Beware of Short-term Corrections in Gold, Recently Riding the Coattails of "Platinum, Silver, and Palladium". UBS warns of short-term correction risks in gold, with gold volatility soaring to levels seen during the Russia-Ukraine conflict, breaking its relationship with real interest rates and weakening its safe-haven appeal. The gold-silver ratio has dropped to around 65, with historical data showing weak subsequent performance. However, UBS maintains a long-term bullish outlook, supported by central banks' continued gold purchases, stable ETF inflows, diversified demand, and undervaluation of gold mining stocks.

Overseas Companies

The World's First 1.8nm Chip is Here! Intel has released the world's first 1.8nm AI PC chip, boosting edge AI computing power to 180 TOPS, achieving breakthroughs in performance and energy efficiency. This chip not only redefines the AI PC experience but also opens a new phase of large-scale commercial applications for intelligent agents by expanding into edge scenarios such as robotics.

Hyundai Launches New Humanoid Robot, Plans to Produce 30,000 Units Annually and Start Car Manufacturing in 2028. Boston Dynamics, a subsidiary of Hyundai, has released the latest version of the Atlas humanoid robot, planning to produce 30,000 units annually starting in 2028 in its US factory, gradually putting them into use, which drove the stock price to soar 8.4%, reaching a historical high. The robot can lift 50 kg and operate in temperature ranges from -4°F to 104°F. The company states that it will initially undertake repetitive tasks and will participate in complex assembly by 2030.

AI Enters the "Monetization Era"! Google's Latest Report: Enterprise AI Bids Farewell to the Experimental Phase, 88% of Intelligent Agent Pioneers Achieve Positive Returns. Global AI applications have entered a monetization era centered around "intelligent agents," with commercial value becoming the core focus of the market. A report from Google Cloud shows that companies willing to invest heavily in AI intelligent agents have gained substantial returns through efficiency and revenue improvements and are leading a new round of capital reallocation and market competition dynamics

Today's News Preview

China's foreign exchange reserves for December.

Eurozone's CPI for December.

U.S. ADP employment change for December.

U.S. JOLTS job openings for November.

U.S. ISM non-manufacturing index for December.

U.S. factory orders and durable goods orders for October.

U.S. EIA crude oil inventory change for last week