Morning News

**Source**: Wall Street Insights

**Market Overview**

U.S. nonfarm payrolls in November exceeded expectations, but the unemployment rate unexpectedly surged to a four-year high. Traders did not increase bets on a Federal Reserve rate cut. The Dow Jones Industrial Average and S&P 500 fell for three consecutive sessions, while technology stocks rebounded after a losing streak, propping up the Nasdaq to close higher.

Tesla rallied over 3% to hit a record high. NVIDIA rebounded 0.8%. Among the Magnificent Seven tech giants, Alphabet was the sole decliner, dropping 0.54% and extending losses to four straight trading days. Circle jumped approximately 10%. The energy sector slid 3% dragged by crude oil weakness. Pfizer fell 3.4% after issuing a gloomy earnings outlook, weighing on the healthcare sector.

U.S. Treasury yields declined across the board, with the 10-year yield plunging over 3 basis points. The U.S. dollar was little changed from late Tuesday, having dipped as much as 0.43% intraday. The offshore renminbi extended its Tuesday strength, briefly climbing to around 7.03, a 14-month high. Bitcoin rose 1.8%, touching an intraday peak of $88,000.

Gold swung wildly, rallying nearly 1.5% from the intraday low before pulling back to hold above the $4,300 level. Silver ended slightly lower by 0.5%. U.S. crude oil briefly broke below $55 a barrel, hitting its lowest level since early 2021.

During the Asian trading session, A-shares and H-shares fluctuated in a correction mode. The ChiNext Index dropped over 2%, while consumer and intelligent driving stocks bucked the trend. Commercial aerospace stocks retreated. The Hang Seng Index and Hang Seng Tech Index both fell more than 2%. Gold-related stocks weakened, while platinum and palladium futures continued to climb.

**Top News**

- Central Financial and Economic Affairs Commission: Investment and consumption growth are expected to recover next year. For the real estate sector, strict control should be imposed on new supply while existing inventory should be revitalized.

- U.S. employment continues to cool: Nonfarm payrolls edged up in November, but the unemployment rate hit a four-year high. Traders now price in two Fed rate cuts next year. The "Fed Whisperer" commented that the nonfarm data is unlikely to significantly alter the Fed's assessment when weighing another rate cut.

- U.S. retail sales were flat overall in October, but a stronger-than-expected core reading supported Q4 economic growth.

- The U.S. Markit Composite PMI fell to a six-month low in December, with price indicators surging and employment metrics weakening. The Eurozone manufacturing PMI contracted at a faster pace in December; Germany posted its worst performance in 10 months, while France unexpectedly returned to expansion territory.

- At 10:00 a.m. Thursday, Donald Trump will deliver a nationwide address to recap a "great" year and preview new policies for 2025.

- Karen Dynan expects inflation to drop sharply in the first half of next year. She noted that the Fed Chair nominee may be announced in early January and should have an "open mind".

- Kevin Hassett emphasized that Fed independence is crucial, and candidates should not be disqualified simply for being friends with Trump. The Wall Street Journal reported that Trump is scheduled to interview Fed Governor Christopher Waller on Wednesday as part of the Fed Chair selection process.

- The Trump administration threatened to use "all tools" to retaliate against the EU's digital tax, and unusually named potential targets including European companies such as SAP and Siemens.

- Tesla's share price hit an intraday record high amid growing optimism about its autonomous driving technology. Xpeng Motors obtained an L3 autonomous driving road test license, becoming the third domestic automaker to do so, intensifying competition with Tesla's Full Self-Driving (FSD) system.

- The EU may abandon its 2035 full ban on internal combustion engine vehicles, lowering the emission reduction target to 90% and allowing sales of plug-in hybrid vehicles.

- Foldable iPhones to launch next year! Apple's product roadmap for the next two years was leaked, expanding its flagship smartphone lineup from five models to seven.

- Vanke proposed a 12-month extension on principal repayment of its medium-term notes, with the issuer providing corresponding credit enhancement measures.

**Market Closing Quotes**

- **U.S. & European Equities**: The S&P 500 fell 0.24% to 6,800.26, extending losses to a third consecutive session. The Dow Jones Industrial Average declined 0.62% to 48,114.26. The Nasdaq Composite rose 0.23% to 23,111.462. Europe's STOXX 600 closed 0.47% lower at 579.80.

- **A-shares**: The Shanghai Composite Index closed down 1.11% at 3,824.81. The Shenzhen Component Index fell 1.51% to 12,914.67. The ChiNext Index dropped 2.10% to 3,071.76.

- **Bond Market**: The yield on the 10-year U.S. Treasury note fell 2.54 basis points to 4.1470%. The 2-year U.S. Treasury yield declined 2.28 basis points to 3.4786%.

- **Commodities**: COMEX gold futures edged down 0.03% to settle at $4,333.70 per ounce. WTI January crude oil futures fell 2.73% to $55.27 a barrel. Brent February crude oil futures dropped 2.71% to $58.92 a barrel.

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# Details of Key News

## Global Heavyweight News

### Office of the Central Commission for Financial and Economic Affairs: Investment and Consumption Growth Expected to Recover Next Year; Strict Control on New Real Estate Supply and Activation of Existing Inventory

According to Xinhua News Agency, a responsible person from the Office of the Central Commission for Financial and Economic Affairs stated that expanding domestic demand will be the top priority task next year. A moderately loose monetary policy will continue to be implemented in the coming year, and efforts will be made on both the supply and demand sides to stabilize the market. On the supply side, it is necessary to strictly control new supply and revitalize existing inventory, encourage the purchase of existing commercial housing for reasonable purposes such as affordable housing, accelerate inventory digestion, and steadily promote the construction of "high-quality housing".

### U.S. Employment Continues to Cool Down: November Nonfarm Payrolls Edge Up, but Unemployment Hits a Four-Year High; Traders Expect Two Rate Cuts Next Year

The U.S. Bureau of Labor Statistics released the nonfarm payroll data for October and November simultaneously on Tuesday. The data showed that nonfarm payrolls increased by 64,000 in November, slightly exceeding market expectations. However, the unemployment rate unexpectedly rose to 4.6%, a new high since September 2021, indicating a sustained cooling of the labor market. Employment figures plummeted by 105,000 in October, mainly dragged down by a sharp decline in federal government employment. The report revealed a significant deterioration in the employment structure, with a substantial loss of full-time jobs and a surge in the number of part-time workers and those holding multiple jobs, highlighting a decline in the "quality" of employment.

### The "Fed Whisperer" Comments on Nonfarm Data: Unlikely to Significantly Alter the Fed's Judgment in Weighing Another Rate Cut

Timiraos pointed out that by November, the private sector had added an average of 44,000 jobs per month over the past six months, marking the slowest six-month hiring pace since the post-pandemic U.S. economic recovery cycle. The unemployment rate rose from 4.44% in September to 4.56%, close to the year-end unemployment forecast released by several Federal Reserve officials last week. The current weak hiring situation is sufficient to support Powell's stance of promoting rate cuts at the past three FOMC meetings, but not severe enough to necessitate another rate cut in January.

### U.S. October Retail Sales Flat Overall, but Strong Core Indicators Exceed Expectations to Support Q4 Growth

U.S. retail sales in October were dragged down by falling auto sales and lower gasoline prices, remaining flat month-on-month, slightly below market expectations. However, after excluding volatile items such as automobiles and gasoline, the core retail indicators performed significantly better than expected, reflecting accelerating consumer spending at the start of the holiday shopping season. The retail sales control group, which is used in GDP calculations, soared by 0.8% month-on-month, the largest increase since June.

### U.S. December Markit Composite PMI Hits a Six-Month Low; Price Indicators Surge, Employment Indicators Weaken

Data released by S&P Global on Tuesday showed that the preliminary composite output index for December dropped by 1.2 points to 53. The composite input price index rose sharply by nearly 3 points to 64.1, while the composite employment index fell by 1.4 points, moving closer to a state of stagnation. Both the manufacturing and services PMI surveys came in below expectations.

### Euro Zone December Manufacturing PMI Contracts Faster; Germany Records Its Worst Performance in 10 Months, France Unexpectedly Returns to Expansion

Germany's manufacturing sector became a drag, with the output index falling to 49.4, ending nine consecutive months of growth. Its manufacturing PMI dropped to 47.7, staying in the contraction zone for the second consecutive month. In contrast, France's manufacturing sector showed positive signs: its PMI rose to 50.6, a 40-month high, and the manufacturing output index rebounded sharply from 45.0 in November to 49.7, a four-month peak.

### Trump to Deliver National Address at 10:00 a.m. Thursday: Recapping a "Great" Year and Previewing New Policies for Next Year

Trump announced on social media that he will deliver a nationwide address from the White House at 9:00 p.m. EST on Wednesday (10:00 a.m. Beijing Time on Thursday). In his post, he wrote, "This has been a great year for our country, and the best is yet to come." White House Press Secretary Karoline Leavitt stated, "The President will detail the historic achievements of the past year and preview several upcoming policies for the new year."

### Karen Dynan: Inflation Expected to Plummet in H1 Next Year; Fed Chair Nominee May Be Announced in Early January with an "Open Mind"

Karen Dynan said that there may be one or two more interviews for the Federal Reserve Chair position this week and next. She dismissed doubts about the independence of the incoming chair, noting that candidates Warsh and Hassett are highly qualified. She emphasized that the new chair should have an "open mind", especially to break the Fed's traditional notion that growth leads to inflation, and refuted the claim that Hassett would lack influence at the Fed. She predicted that the Supreme Court will issue a ruling on the tariff case in January, warning that overturning the tariffs would endanger national security. A massive tax rebate of 100 billion to 150 billion US dollars is expected in Q1, with an average of 1,000 to 2,000 US dollars per household.

### Hassett: Fed Independence Is Crucial; Candidates Should Not Be Disqualified for Being Trump's Friends

As U.S. President Trump enters the final stage of selecting a successor to Federal Reserve Chair Powell, Kevin Hassett, a top candidate for the position and Director of the National Economic Council, stated on Tuesday that he supports the central bank's independence. He added that his relationship with Trump should not hinder the mass production of models whose software and hardware meet L4-level autonomous driving standards. With the accelerating commercialization of intelligent driving, the direct competition between Xpeng and Tesla in the field of autonomous driving will intensify further.

### EU May Abandon the 2035 Full Ban on Combustion Engine Vehicles, Lower Emission Reduction Target to 90% and Allow Sales of Plug-in Hybrids

This adjustment plan is expected to be officially announced on Tuesday, followed by a review process by the European Parliament and the Council of the European Union. If ultimately implemented, it will be regarded as a key concession by the EU on its path to full electrification.

### Foldable iPhone to Launch Next Year! Apple's Launch Roadmap for the Next Two Years Leaked, Expanding Flagship Phone Lineup from 5 to 7 Models

It is reported that Apple will launch its first foldable iPhone with a truly crease-free display, which is set to debut next autumn. When unfolded, the screen will be 7.7 inches. To reduce the device's thickness, it will adopt side-mounted Touch ID instead of 3D facial recognition, featuring a "highly robust" hinge design. In the autumn of 2027, Apple will release a 20th-anniversary edition of the iPhone, equipped with front and rear curved glass casings and a bezel-less full-screen display. The company plans to launch the iPhone 18 Pro and Pro Max next autumn, the iPhone 18 and 18e in the spring of the following year, while the release of the iPhone Air 2 will be postponed to the same spring.

### Vanke Proposes a 12-Month Extension on Medium-Term Note Principal Repayment with Corresponding Credit Enhancement Measures

Vanke has proposed revising the repayment date of the current medium-term notes to December 15, 2026, when the full principal will be repaid. The 60 million yuan of interest due on the notes on December 15, 2025, will be paid within a grace period ending on December 22, 2025, with the issuer providing corresponding credit enhancement measures.

## Selected Research Reports

### "Hold Fast to AI Winners, Avoid Rotation!" JPMorgan's Hardware Team: "Network" Growth to Outpace "Computing Power" in 2026

JPMorgan pointed out that the valuation premium of U.S. AI-related stocks currently stands at only 26%, while AI is expected to drive a 60%-80% increase in profits. Therefore, investors should hold onto stocks of leading AI companies. The bank predicts that the network infrastructure sector will outperform the computing power sector next year, with AI switch revenue projected to grow by 48% in 2026, significantly higher than the 23% growth of the overall data center switch industry.

### Goldman Sachs Asia Survey: The Real Gap in the Supply Chain Amid AI Frenzy

Goldman Sachs' survey results indicate that demand for AI servers is expected to maintain strong growth in 2026, along with robust demand for optical network equipment. Supply growth in the DRAM market remains moderate, resulting in demand consistently exceeding supply by a wide margin. In contrast, traditional terminal markets such as PCs and smartphones are experiencing sluggish growth, with some niche segments even facing downward pressure.

### Goldman Sachs Raises 2026 Copper Price Forecast, Citing "Delayed U.S. Copper Tariffs Worsening Supply Shortages Outside the U.S."

Goldman Sachs has raised its 2026 copper price forecast to 11,400 US dollars per ton. The core logic is that the U.S. copper tariffs are expected to be delayed until 2027. This means the U.S. will continue to stockpile copper at a premium in 2026, exacerbating supply shortages in non-U.S. markets and dominating pricing. However, the current copper price already factors in extremely crowded speculative long positions and excessive optimism around the AI data center concept. If tariffs are imposed earlier than expected or market sentiment reverses, copper prices will face significant correction risks.

### Going Global 2.0! UBS: Chinese Automakers Poised to Capture 1/3 of the Global Market by 2030 with Technological and Supply Chain Advantages

UBS predicts that leveraging their advantages in electric vehicle technology, improving distribution networks, and growing brand recognition, Chinese automakers are expected to capture one-third of the global automotive market by 2030, a significant increase from the current one-quarter share. Leading enterprises like BYD have achieved an overseas gross profit margin of 27.3%, far exceeding the 17.7% in the domestic market, demonstrating strong profitability in overseas markets.

## Domestic Macroeconomics

### Was the Recent Market Weakness Unexpected?

Liu Gang from China International Capital Corporation (CICC) believes that the recent sharp correction in the A-share and H-share markets is not unexpected. As early as September, it was warned that the credit cycle would take a downward turn in Q4, which would limit the market's upside potential. Currently, the market faces multiple pressures: fiscal policy has not been strongly expanded, the Central Economic Work Conference has not introduced additional supportive measures, the Fed's hawkish rate cuts have had limited effects, and the impact of capital inflows into the market has been overestimated. The year-end policy lull combined with liquidity disturbances has led to the current weak market performance, which is a normal phenomenon.

### Qiushi Journal: How to Promote Positive Interaction Between Consumption and Investment?

An article published on Qiushi Journal stated that the recently held Central Economic Work Conference, closely aligned with the current development situation, has prioritized "adhering to domestic demand-driven growth and building a strong domestic market" as the top economic task for next year. Consumption and investment are the two pillars of domestic demand. Effectively promoting their positive interaction is essential to enhancing the endogenous momentum and stability of the domestic economic cycle, and is of great significance for accelerating the establishment of a new development pattern. To expand new space for domestic demand growth now and in the future, it is necessary to continuously stimulate potential consumption, expand effective investment, and identify the key areas to promote positive interaction between the two.

# Domestic Companies

KunlunXin to Complete Share Restructuring Soon: Accelerating IPO Drive with 2025 Revenue Surpassing RMB 2 Billion

KunlunXin is on the verge of completing its share restructuring, ramping up efforts to push for an initial public offering (IPO). An informed source revealed, "This has drawn widespread attention and can no longer be kept under wraps, but the specific timeline is yet to be confirmed." It is understood that prior to this round of restructuring, KunlunXin consulted with multiple securities firms and decided to switch its listing destination to Hong Kong. Subsequently, Baidu, its major shareholder, announced that it is currently evaluating a proposed spin-off and listing. Baidu emphasized that any spin-off and listing would be subject to relevant regulatory approval procedures, and the company does not guarantee that the spin-off and listing will proceed.

**Historic Turning Point! BNEF Warns: Global New PV Installations May See First Decline in Two Decades in 2026**

BloombergNEF has warned that due to tightening policies and market saturation, global new photovoltaic (PV) installations may drop to 649GW in 2026, marking the first contraction on record. Weak demand, coupled with overcapacity and high inventories, is expected to keep pressure on industrial chain prices in the long term. After a period of in-depth adjustment, the industry may return to moderate growth in 2027 driven by the expansion of new markets.

**World’s First Implantable Brain-Computer Interface for Drug Addiction Treatment Approved in China**

On December 15, China’s National Medical Products Administration approved an implantable brain-computer interface (BCI) product developed by Jingyu Medical, making it the world’s first such product approved for the treatment of addictive mental disorders. The product adopts deep brain stimulation (DBS) technology, regulating the brain’s reward system through implanted electrodes and pulse generators, and is mainly indicated for the treatment of severe opioid dependence. Clinical data shows that the 6-month abstinence rate of patients reached 80%, with a 10-year follow-up abstinence rate of 69%, and no significant adverse side effects were observed.

# Overseas Macroeconomy

**Change in the Race for Next Fed Chair! Kevin Warsh’s Policy Stance: Rate Cuts + Balance Sheet Reduction**

Although Kevin Warsh has recently advocated for interest rate cuts, he holds a more hawkish stance on the issue of balance sheet reduction. However, Deutsche Bank believes that the prerequisite for implementing "rate cuts alongside balance sheet reduction" is regulatory reforms to lower banks’ reserve requirements, which is questionable in the short term. The market needs to closely monitor whether the new Fed chair can maintain independence under pressure from Trump to slash interest rates significantly, as well as the process of establishing his policy credibility.

**An Interview That Best Reflects Warsh’s Policy Views: Inflation Is a Choice of the Fed**

In an in-depth interview, Warsh bluntly stated that inflation is the Fed’s responsibility and cannot be attributed to external factors. As a top candidate to succeed Jerome Powell, his reform proposal does not seek to dismantle the existing framework, but rather advocates that the Fed needs a "renaissance" rather than a "revolution". Regarding the predicament of high interest rates, Warsh argues that room for lower rates can be created through balance sheet reduction. "If we quiet down the printing press, interest rates can actually be lower."

**U.S. Says "Preliminary Consensus Reached with Ukraine on Multiple Key Issues"; Reports Indicate U.S. Has Offered Security Guarantees**

The U.S.-Ukraine Berlin talks have made "significant progress" on core issues such as security guarantees. The U.S.-proposed plan is close to a "NATO Article 5-style" mechanism, aiming to clear obstacles for a final peace agreement. The negotiations have now entered the final stage of resolving remaining sensitive differences such as territorial issues, and relevant economic reconstruction plans are being discussed simultaneously. If an agreement is reached, it will significantly impact geopolitical risk premiums and investment prospects.

**Japan Finalizes ¥18.3 Trillion Supplementary Budget, Plans Additional Bond Issuance of ¥11.7 Trillion**

Defense spending will account for 2% of GDP. Amid the expansion of fiscal deficits, a rate hike by the Bank of Japan is a foregone conclusion. The divergence between fiscal expansion and monetary tightening may exacerbate market concerns about pressure on Japanese government bonds and fluctuations in the yen.

**Milei "On Schedule" Launches "Peso Depreciation" After Argentina’s Election by Widening Exchange Rate Fluctuation Band**

The Central Bank of Argentina announced that starting next year, the new policy will allow the peso’s trading band to be adjusted based on the monthly inflation rate, which stood at 2.5% in November. Currently, the monthly adjustment rate of the exchange rate band is 1%. Meanwhile, the bank will launch a plan to increase foreign exchange reserves, which may rise by $10 billion to $17 billion next year.

# Overseas Companies

**Top "Second-Generation Rich" Takes the Helm**

NVIDIA founder Jensen Huang has broken Silicon Valley conventions by appointing his children to core business positions at the company. His 35-year-old son, Spencer Huang, currently serves as a product manager for the robotics line, overseeing cutting-edge projects such as GR00T. His 34-year-old daughter, Madison Huang, is a senior marketing director for Omniverse and robotics businesses. Neither has a technical background, but both have been rapidly promoted within NVIDIA’s most strategically significant AI robotics business unit.

**"Foolish to Build Small Nuclear Reactors on Earth" — Musk: The Sun Is the "Free Ultimate Nuclear Reactor"**

"The sun is a huge, free fusion reactor in the sky. Building tiny fusion reactors on Earth is foolish to the extreme." Musk is urging enterprises to stop wasting funds on "trivial" reactor projects. His view stands in stark contrast to the investment boom in Silicon Valley, where tech giants like NVIDIA and Google are leveraging AI technology to accelerate nuclear fusion research and development. Meanwhile, the U.S. government has proposed a roadmap to connect fusion energy to the grid in the early 2030s.

**High-Frequency Trading — The Battle for 3.2 Nanoseconds!**

A fierce controversy has erupted in European high-frequency trading over a 3.2-nanosecond speed advantage. French traders have accused Germany’s Eurex of allowing some companies to front-run orders through "damaged data packets", reaping hundreds of millions of dollars in profits over three years and undermining market fairness. Although the exchange has denied the allegations and announced system upgrades, this high-frequency trading "arms race" shifting from milliseconds to nanoseconds is pushing regulation to new limits.

# Industries/Concepts

1.  **Commercial Aerospace** | According to IT Home, Yushi Space, the only domestic team adopting the "stainless steel rocket + capture arm recovery" solution, announced that it has recently completed China’s first full-scale ground verification test of a 100-ton-class "chopstick-style" capture arm. This marks the official delivery of China’s first full-scale prototype capture arm benchmarking SpaceX’s Starship recovery model, entering the ground joint test phase. Yushi Space’s core product, the AS-1 rocket, features a stainless steel structure, liquid oxygen-methane propulsion, and capture arm recovery, with the goal of reducing launch costs to RMB 20,000 per kilogram (down to RMB 10,000 per kilogram after recovery), only one-sixth the cost of traditional rockets.

   > **Commentary**: Analysts believe that the breakthrough in China’s reusable rocket technology is not only a cost revolution and technological upgrade within the aerospace industry, but also a crucial pillar for national strategic security, high-end manufacturing upgrading, and the reshaping of the global competitive landscape. In the short term, it will benefit related enterprises in the industrial chain such as aerospace manufacturing, new materials, and satellite applications. In the long term, it will drive China’s transformation from an aerospace power to an aerospace superpower, providing important support for seizing opportunities in the new round of technological revolution and industrial transformation.

2.  **Large Models** | According to Sina Finance, China Telecom Research Institute, in collaboration with industry partners including the Institute of Computing Technology of the Chinese Academy of Sciences, Huawei Ascend, and Muxi Technology, has successfully completed the industry’s first cross-architecture large model inference technology verification for domestic computing power, relying on China Telecom’s cloud-network convergence technology test and verification platform. This breakthrough has built a heterogeneous large model inference framework based on Triton, achieving the core goal of "one set of framework code, transparent migration across three chips". It has shortened the large model operator adaptation cycle from "weeks" to "days", with performance reaching 90% of that of native operator libraries.

   > **Commentary**: Analysts believe that this technology addresses a key bottleneck in the commercialization of large models. By enabling seamless operation of the same set of operator source code on three types of chips (NVIDIA, Ascend, and Muxi), it fundamentally solves the multi-architecture adaptation problem, providing intuitive and accurate chip selection decision support for business parties. In the future, technological innovation will drive domestic computing power to move from "usable" to "user-friendly" and "easy to use", injecting strong momentum into the high-quality collaborative development of independent, controllable, and multi-heterogeneous computing infrastructure, and facilitating the localization process of China’s core digital economy industries.

3.  **Tungsten (Non-Ferrous Metals)** | According to the official WeChat account of "China Tungsten Online", the price of tungsten concentrate has exceeded the RMB 400,000 mark, surging 190.2% year-to-date; the price of ammonium paratungstate (APT) has broken through RMB 600,000, rising 189.1% year-to-date; the price of tungsten powder is approaching RMB 1,000 per kilogram, up 202.3% year-to-date. As the year-end approaches, market sentiment is fraught with tension. News of production suspensions and maintenance on the raw material side, combined with reluctance to sell, has heightened market concerns about tight supply, triggering the release of limited stocking demand and driving tungsten prices higher. On the other hand, the continuous sharp price increase has significantly strained market liquidity. Moreover, enterprises are facing pressure from fund recovery and financial settlement at the end of the year, leading to a noticeable decline in market purchasing power and willingness. Transactions are mainly dominated by long-term contracts and sporadic stocking, with overall trading activity remaining cautious.

   > **Commentary**: Industry insiders point out that an accidentally leaked internal analysis document from SK Hynix, one of the world’s top three memory chip manufacturers, has revealed a severe imbalance between supply and demand in the memory market. SK Hynix warns that the DRAM supply shortage will persist until 2028. Earlier, international investment banks including UBS, JPMorgan Chase, and Nomura Securities all predicted that the DRAM shortage would last until 2027. UBS projected last week that the DRAM supply shortage is expected to continue until the first quarter of 2027, with demand for DDR memory expected to grow by 20.7%, far exceeding the supply growth rate. The shortage of NAND flash memory is expected to persist until the third quarter of 2026.

4.  **Memory Chips** | According to Sina Finance, an accidentally leaked internal analysis document from SK Hynix, one of the world’s top three memory chip manufacturers, has revealed a severe imbalance between supply and demand in the memory market.

   > **Commentary**: Research institutions believe that after long-term development, domestic relevant equipment manufacturers have continuously iterated their product performance, optimized the covered manufacturing processes and technology nodes, and have achieved domestic substitution in multiple fields. Driven by the explosive demand for AI memory and the need for independent and controllable supply chains, domestic semiconductor equipment and materials enterprises are expected to continue to benefit from this super cycle, realizing a virtuous circle of technological breakthroughs and market expansion.

5.  **Hydrogen Energy** | On December 16, it was learned from China Energy Engineering Corporation (CEEC) that the first phase of the CEEC Songyuan Hydrogen Energy Industrial Park (Green Hydrogen-Ammonia-Methanol Integration Project), the world’s largest green hydrogen-ammonia-methanol integrated project, was officially put into operation in Songyuan City, Jilin Province. The project plans to be constructed in phases, including 3GW of new energy power generation, 800,000 tons of green synthetic ammonia, and green methanol. After the commissioning of Phase I, it will feature 800MW of new energy power generation (including 750MW of wind power and 50MW of photovoltaic power), with an annual output of 45,000 tons of green hydrogen, 200,000 tons of green ammonia, and green methanol. This is equivalent to reducing crude oil consumption by 460,000 tons and carbon emissions by 300,000 tons annually.

   > **Commentary**: GF Securities believes that driven by policies and technology, green ammonia and green methanol have broad prospects for industrial application. As a basic chemical raw material, green ammonia is expanding its fuel properties. In addition, the dual-carbon policy will boost the development of green ammonia fuel, with significant growth expected in both output and demand. By 2050, the proportion of green ammonia in China is expected to exceed 70%, and the decline in green electricity costs will enhance its economic viability. With the reduction of green electricity costs, green methanol is expected to become an important option for decarbonization in the future.

6.  **Pork** | On the 16th, the Ministry of Commerce issued an announcement releasing the final ruling on the anti-dumping investigation into imported pork and pork by-products originating in the European Union (EU). It was determined that imported pork and pork by-products from the EU are subject to dumping. Starting from December 17, 2025, anti-dumping duties will be imposed on such imports from the EU. A spokesperson for the Ministry of Commerce stated that the domestic pork industry is currently facing operational difficulties, and there are strong calls for protection. Against this backdrop, the Ministry of Commerce has conducted the investigation in accordance with laws and regulations, extensively solicited opinions from all interested parties, fully protected the rights of all parties, and reached an objective, fair, and impartial investigation conclusion.

   > **Commentary**: Guotai Futures believes that in the fourth quarter of 2025, policy incentives and market losses have stimulated capacity reduction, but no panic sentiment has emerged yet. As losses intensify and policies advance, the effect of capacity reduction is expected to initially manifest, with the total supply decreasing year-on-year. On the demand side, the price level will remain low in the first half of 2026, coinciding with the seasonal off-season. During the loss-making phase, the industry’s cash flow will tighten, reducing demand elasticity. If a panic bottom emerges, market sentiment will recover in the second half of 2026, boosting speculative demand for betting on a cycle reversal, and elasticity may then be released.

# Today’s Key News Preview

- Eurozone and UK November CPI data

- Donald Trump’s nationwide address

- Speeches by Fed Governor Christopher Waller, New York Fed President John Williams, and Atlanta Fed President Raphael Bostic

- Expected maiden flight of the Long March 12A rocket

- Official listing of Muxi Technology Co., Ltd.

- Micron Technology’s earnings report release

- U.S. EIA crude oil inventory change for the previous week

**(End of Full Text)**

# Risk Warning and Disclaimer

The market is risky, and investment requires caution. This document does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial situations, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this document are consistent with their specific circumstances. Investment decisions made based on this document shall be at the user’s own risk.