Morning News

# Source: Wall Street Insights

## Market Overview

A shift in the frontrunner for the Federal Reserve chair dampened market expectations of an interest rate cut, triggering intraday declines across the three major U.S. stock indices, a deeper slump in U.S. Treasury prices, a sharp rally in the U.S. dollar, and a plunge in gold and silver prices.

All three major U.S. stock indices posted weekly losses. The small-cap Russell 2000 hit a series of record closing highs in consecutive sessions, surging over 2% for the week and outperforming the S&P 500 for 11 straight trading days. Chip stocks generally outperformed the broader market, with the semiconductor index rising more than 1%. Micron Technology jumped nearly 8% after its CEO emphasized AI-driven memory demand, while NVIDIA edged down nearly 0.5%. For the week, the Magnificent Seven tech giants underperformed the other 493 constituents of the S&P 500, and the financial sector tumbled over 2%.

After Donald Trump undermined the prospect of Kevin Hassett leading the Federal Reserve, the yield on the 10-year U.S. Treasury note climbed to a four-month high. The U.S. Dollar Index neared a six-week peak. Gold fell nearly 2% intraday and silver futures plunged over 6%, yet both still logged two consecutive weeks of gains.

The offshore yuan briefly approached 6.96, hitting a fresh 20-month high before reversing course into negative territory. Bitcoin dipped over 1% intraday but rebounded above the $95,000 mark, registering a weekly gain of nearly 6%. Crude oil staged an intraday rebound of nearly 2%; despite a sharp drop of over 4% on Thursday, it extended its winning streak to four weeks. LME tin shed nearly 8% but still rose over 5% for the week, while LME copper fell more than 2%, snapping a four-week rally.

During the Asian trading session, the Shanghai Composite Index narrowly held the 4,100-point mark. Trading volume of ETFs across both markets set a new all-time high. Power grid equipment stocks strengthened, the semiconductor industry chain rallied sharply, and lithium carbonate futures plunged by the daily limit.

## Top News

1. Joint Statement on the Meeting between Chinese and Canadian Leaders. Canadian Prime Minister Mark Carney announced the import of 49,000 Chinese electric vehicles, with the tariff rate slashed from 100% to 6.1%.

2. China Securities Regulatory Commission (CSRC): Adhere to the principle of prioritizing stability, conduct timely counter-cyclical adjustments, severely crack down on illegal and irregular activities, and prevent drastic fluctuations in the market.

3. Tax authorities reminded taxpayers to conduct self-inspections on their overseas income over the past three years.

4. A First for China's Commercial Aerospace: Successful verification of landing buffer technology for manned spacecraft.

5. Frontrunner for Fed Chair shifts: Donald Trump stated that he hopes Kevin Hassett will continue to serve as a White House advisor. Reports indicated that BlackRock's Rick Rieder is gaining momentum in the race for the Fed chairmanship, and his meeting with Trump on Thursday went smoothly. Kevin Hassett: If he leads the Federal Reserve, he will resolutely defend its independence; Trump's decision not to nominate him as Fed chair may be the right one. Federal Reserve Governor Michelle Bowman called on the Fed to be prepared to cut interest rates, noting that the U.S. job market remains fragile.

6. The U.S. Supreme Court set next Tuesday as the next opinion day; if no tariff-related opinion is issued, it will be at least another month's wait.

7. Donald Trump said he will impose additional tariffs on eight European countries starting February 1 until Greenland is "fully acquired". Karine Jean-Pierre: The tariff hike is aimed at avoiding a national emergency, as Europe is too weak to safeguard its own security. Kevin Hassett: Trump is still prepared to reach an agreement on the Greenland issue. Joint statement from the eight European countries: The threat of tariff hikes undermines transatlantic relations. Emmanuel Macron: Does not rule out activating the EU's toughest trade retaliation tools. Reports: Multiple EU countries are considering imposing retaliatory tariffs on $93 billion worth of U.S. goods imported into the EU; Canada is considering deploying troops to Greenland.

8. Donald Trump: Suspended the decision to take military action against Iran and is deploying additional troops to the Middle East; it will take a week for the aircraft carrier to be fully deployed. China called on the U.S. to abandon its obsession with force. Donald Trump stated that he "talked himself out of" taking military action against Iran. Iranian President: Attacking the Supreme Leader is equivalent to "launching a full-scale war".

9. ByteDance released its next-generation folding model SeedFold, whose performance surpasses Google's AlphaFold 3.

10. China Securities Regulatory Commission (CSRC) opened an investigation into Ronbay Technology over suspected misleading statements in its major contract announcement. Ronbay Technology: The "total contract amount of 120 billion yuan" signed with Contemporary Amperex Technology Co., Limited (CATL) is an estimate made by the company and is subject to uncertainty.

11. Photovoltaic giants Tongwei and LONGi forecast nearly 10 billion yuan in losses; the industry's in-depth adjustment shows no signs of a turnaround.

12. OpenAI will test ChatGPT ads in the U.S., with the $8 Go subscription launching simultaneously.

13. Elon Musk announced that xAI's Colossus 2 has been put into operation, becoming the world's first GW-level computing cluster, less than a year after construction started. Elon Musk filed a lawsuit against OpenAI and Microsoft claiming up to $134 billion in damages. Musk's "first human with brain-computer interface" made its debut: non-invasive online upgrades are available, and the "immortality code" has been written.

14. Anthropic's Claude Code gained immense popularity, making programming no longer a barrier—its impact is comparable to the "sudden emergence of ChatGPT".

## Market Closing Quotes

### European and U.S. Stock Markets

- S&P 500: Down 0.06% to close at 6,940.01 points; weekly decline of 0.38%.

- Dow Jones Industrial Average: Down 0.17% to close at 49,359.33 points; weekly decline of 0.29%.

- Nasdaq Composite: Down 0.06% to close at 23,515.388 points; weekly decline of 0.66%.

- Europe STOXX 600 Index: Down 0.03% to close at 614.38 points; weekly gain of 0.77%.

### A-Share Market

- Shanghai Composite Index: Closed at 4,101.91 points, down 0.26%.

- Shenzhen Component Index: Closed at 14,281.08 points, down 0.18%.

- ChiNext Index: Closed at 3,361.02 points, down 0.20%.

### Bond Market

By the end of the bond trading session:

- Yield on the 10-year benchmark U.S. Treasury note stood at around 4.22%, up about 5 basis points intraday and 5 basis points for the week.

- Yield on the 2-year U.S. Treasury note was around 3.59%, up about 3 basis points intraday and 6 basis points for the week.

### Commodities

- WTI Crude Oil Futures (January contract): Up 0.42% to close at $59.44 per barrel; weekly gain of approximately 0.5%.

- Brent Crude Oil Futures (March contract): Up 0.58% to close at $64.13 per barrel; weekly gain of approximately 1.2%.

- COMEX Gold Futures (February contract): Down about 0.6% to close at $4,595.4 per ounce; weekly gain of approximately 2.1%.

- COMEX Silver Futures (March contract): Down about 4.1% to close at $88.537 per ounce; weekly gain of approximately 11.4%.

- LME Copper Futures: Down about 2.3% to close at $12,803 per ton; weekly decline of 1.5%.

- LME Tin Futures: Down about 7.8% to close at $47,982 per ton; weekly gain of approximately 5.3%.

# Details of Top News

## Global Highlights

**Joint Statement on the Meeting Between Chinese and Canadian Leaders**

The leaders of the two countries reaffirmed the guiding principles and policies for China-Canada relations. The Canadian side reaffirmed its long-standing commitment to the one-China policy. Both sides are committed to advancing the new-type strategic partnership between China and Canada in the spirit of mutual respect, equality and mutual benefit, so as to better benefit the two peoples.

**Canadian PM Carney Announces Import of 49,000 Chinese EVs with Tariff Slashed from 100% to 6.1%**

According to the Global Times, Canadian Prime Minister Mark Carney stated that Canada will import 49,000 Chinese electric vehicles at a preferential tariff rate. Carney told reporters on January 16, "Canada has agreed to allow up to 49,000 Chinese electric vehicles to enter the Canadian market, subject to the most-favored-nation tariff rate of 6.1%, which restores the level prior to trade frictions."

**CSRC: Prioritize Stability, Conduct Timely Counter-Cyclical Adjustments, Crack Down on Illegal Activities, and Prevent Sharp Market Fluctuations**

The meeting pointed out that we should adhere to the principle of prioritizing stability and consolidate the sound momentum of the market. We will comprehensively strengthen market monitoring and early warning, conduct timely counter-cyclical adjustments, intensify trading supervision and information disclosure supervision, further safeguard trading fairness, severely crack down on illegal and irregular activities such as excessive speculation and even market manipulation, and resolutely prevent sharp ups and downs in the market. We will launch and implement the deepening of the ChiNext reform and continue to promote the implementation of the STAR Market reform.

**Record Trading Volume for Multiple Broad-Based ETFs**

According to the Shanghai Securities News, on January 16, the trading volume of several core broad-based ETFs, including the ChinaAMC CSI 300 ETF, Huatai-PineBridge CSI 300 ETF and Southern Asset Management CSI 500 ETF, hit historical or periodic record highs, indicating highly active market trading. However, at the same time, these ETFs also experienced large-scale net redemptions, suggesting significant pressure of profit-taking amid the volume-driven rally.

**Tax Authorities Remind Taxpayers to Conduct Self-Inspections on Overseas Income Over the Past Three Years**

According to Xinhua News Agency, tax authorities have continued to strengthen publicity and guidance on personal income tax for residents with overseas earnings. Since last year, taxpayers have been reminded to conduct self-inspections on income obtained from overseas between 2022 and 2024. In accordance with the provisions of the Tax Collection Administration Law and other laws and regulations, if a taxpayer fails to file a tax return or underpays taxes due to calculation errors, the tax authorities may recover the unpaid taxes and late fees within three years; in cases of tax evasion, penalties shall be imposed in accordance with the law.

**A First for China's Commercial Aerospace: Successful Verification of Manned Spacecraft Landing Buffer Technology**

On January 18, the CYZ-1 manned spacecraft test capsule independently developed by Beijing Transcender Manned Space Technology Co., Ltd. completed the comprehensive verification test of its landing buffer system. This success marks that Transcender has become the third commercial aerospace enterprise in the world to develop and verify the landing buffer technology for manned spacecraft.

**Two Launch Vehicle Missions End in Failure: Long March 3B and Ceres-2 Missions Unsuccessful**

**Frontrunner for Fed Chair Shifts; Trump Says He Wants Hassett to Remain White House Advisor**

Trump stated that if Hassett leaves his position as Director of the White House National Economic Council, the administration will lose one of the most influential "spokespersons" on economic issues. Analysts speculate that Kevin Warsh has become the leading candidate for the next Federal Reserve chair. Following Trump's remarks, the U.S. dollar quickly rebounded from its intraday low to turn higher, while the S&P 500 and Nasdaq reversed course to trade lower.

**Rising Star: Reports Indicate BlackRock's Rieder Gaining Momentum in Fed Chair Race, with Smooth Meeting with Trump on Thursday**

On monetary policy, Rieder advocates that as the economy evolves, the Federal Reserve should lower interest rates to a "neutral level" of around 3%. On fiscal issues, Rieder has repeatedly downplayed market concerns about the U.S. massive government deficit. On inflation, he proposed that inflation slightly above the target is acceptable if it helps stabilize debt dynamics and maintain employment.

**Backfire from DOJ Subpoena? Powell's Tenure Dilemma Risks Dragging Fed into "Shadow Chair" Era**

Trump's "legal pressure" has backfired; the DOJ subpoena may force Powell to remain as a Fed governor after his term as chair ends in 2026 to defend the central bank's independence. This move risks creating a "dual papacy" power structure at the Fed, triggering market confusion over "who is in charge" and plunging Trump's nomination of a new chair and future monetary policy into an unprecedented political quagmire.

**New Fedwire: Powell's Criminal Investigation Makes Succession Landscape More "Uncertain"**

Nick Timiraos noted that the criminal investigation into Powell has become the biggest obstacle to Trump's nomination of a successor. Key Republican senators have issued an "ultimatum": no nomination approval until the investigation is concluded. This turn of events has turned "loyalty", which Trump values most, into a "liability" in the eyes of Congress. Frontrunner Kevin Hassett has lost ground for supporting the investigation, while the relatively distant Kevin Warsh or Christopher Waller have instead become the key to breaking the impasse due to their "independence".

**Hassett: If Leading the Fed, He Will Resolutely Defend Its Independence**

Hassett emphasized the importance of Fed independence for economic stability and pledged to firmly uphold this principle if he leads the central bank. He stated that he expects the DOJ investigation to "find no major issues", and also revealed that he will accompany Trump to the Davos Forum next week, where a new policy allowing 401(k) funds to be used for housing down payments will be announced. Hassett also confirmed that he is advancing the "Trump Card" financial innovation and expressed approval of several potential candidates for the Fed chair.

**Hassett: Trump May Be Right Not to Nominate Him as Fed Chair**

Hassett said that Trump will most likely keep him as a White House economic advisor. He added that there are many excellent candidates, and the president's decision that the White House is the best fit for him at present is probably correct. Media believe that Hassett's statement means he will miss out on the Fed chair position.

**Fed Governor Bowman Calls on Fed to Be Prepared to Cut Rates, Citing Fragile U.S. Job Market**

Bowman pointed out that if there is no significant and sustained improvement in U.S. labor market conditions, the Fed should stand ready to adjust policies to move them closer to neutrality. She said the Fed should also avoid sending signals of pausing rate cuts, as doing so would indicate that we are not paying enough attention to or responding to the recent and expected path of the labor market.

**U.S. Supreme Court Sets Tuesday as Next Opinion Day; No Tariff Ruling Means Wait of at Least Another Month**

Justices typically only enter the courtroom when issuing opinions on heard cases, and Wednesday will be the last court conference before the next session, after which the court will adjourn until February 20. Trump said on Friday that it would be a shame for the United States if the Supreme Court rules against him in the lawsuit.

**To Seize Greenland, U.S. Wields Tariff Stick Again; Eight European Countries Counter Collectively**

Trump posted that starting February 1, 2026, a 10% tariff will be imposed on eight European countries that oppose his bid to seize Greenland, which will be raised to 25% starting June 1 until an agreement is reached on the "complete and total purchase of Greenland". In response, the eight European countries issued a joint statement, calling the U.S. tariff threat "unacceptable". French President Emmanuel Macron stated that if these threats are confirmed, European countries will respond in a united and coordinated manner.

**Trump Mentions for the First Time: May Impose Tariffs on Countries Not Supporting U.S. Greenland Acquisition Plan**

According to Xinhua News Agency, Trump stated that he may impose tariffs on European allies that do not support the U.S. acquisition of Greenland, just as he previously threatened to impose tariffs on European pharmaceutical companies. He said the U.S. claim for Greenland is based on national security considerations. This is the first time Trump has mentioned the possibility of using tariffs to obtain Greenland. According to CCTV News, a U.S. congressional delegation visited Denmark, hinting that the U.S. Congress will oppose the government's plan to "purchase" Greenland.

**Joint Statement from Eight European Countries: Tariff Threat Undermines Transatlantic Relations and Risks Triggering a Dangerous Vicious Cycle**

Macron: Does not rule out activating the EU's toughest trade retaliation tools.

**Report: Multiple EU Countries Considering Retaliatory Tariffs on $93 Billion Worth of U.S. Goods to Counter Trump**

According to media reports, multiple EU countries are also considering restricting U.S. companies' access to the EU market. A senior EU diplomat revealed on Sunday that if the EU fails to reach an agreement with the U.S., retaliatory tariffs will take effect automatically starting February 6.

**Canada Considering Deploying Troops to Greenland**

Canadian officials revealed on Sunday that in response to Trump's threat to purchase Greenland, Canada has formulated a plan to send a small contingent of troops to Greenland for military exercises with other NATO allies.

**U.S. Treasury Secretary Yellen: Tariff Hikes Aim to Avoid National Emergency**

Yellen said this is a geopolitical decision, and Trump can use U.S. economic strength to avoid a hot war. She reaffirmed the message conveyed by Trump that the U.S. will not back down on the issue of acquiring Greenland. When asked whether Trump's stance on Europe is a negotiating tactic, Yellen hinted that Trump will not change his mind. She said the European continent is too weak to safeguard its own security, and Trump believes that "it is impossible to enhance security unless Greenland becomes part of the United States."

**Hassett: Trump Still Prepared to Reach an Agreement on Greenland**

He said, "Now is the best time to stay calm, abandon inflammatory remarks, sit down and negotiate to see if we can reach an agreement that benefits everyone."

**Trump Says He "Talked Himself Out of" Delaying Military Action Against Iran**

On Friday, January 16, a reporter asked whether the persuasion of the leaders of Saudi Arabia, Qatar and Oman led him to abandon the strike on Iran. Trump replied, "No one talked me out of it; I talked myself out of it."

**Trump: Suspended Decision to Take Military Action Against Iran, Sending Additional Troops to Middle East; Aircraft Carrier Deployment to Be Completed in a Week; China Calls on U.S. to Abandon Obsession with Force**

According to CCTV News, as tensions with Iran escalate, the U.S. is deploying additional troops to the Middle East, including at least one aircraft carrier. U.S. military sources said that the U.S. is expected to increase land, sea and air forces in the Middle East in the coming days and weeks. On the same day, CCTV reporters learned that Trump has suspended the decision on whether to launch military strikes against Iran. The military option remains on the table, but uncertainty has increased significantly.

**Iranian President: Attacking the Supreme Leader Equivalent to "Launching a Full-Scale War"**

Iranian Foreign Ministry: U.S. Interference Should Be Held Responsible for Tensions in U.S.-Iran Relations.

**OpenAI to Test ChatGPT Ads in U.S., Launch $8 Go Subscription Simultaneously**

OpenAI ads will first appear for free users and subscribers to the $8-per-month ChatGPT Go plan, while the higher-priced Plus and Pro versions will remain ad-free. Analysts believe this is an important step for OpenAI to diversify its revenue streams and pave the way for a potential IPO amid the pressure of high computing power investment. The company emphasized that ads will be clearly distinguished from AI responses, will not affect ChatGPT's reply content, and will not share user conversation data with advertisers.

**Anthropic's Claude Code Gains Immense Popularity, Making Programming Accessible to All; Impact Comparable to "The Sudden Emergence of ChatGPT"**

Claude Opus 4.5, the latest version of Claude Code, has demonstrated amazing capabilities. Some users pointed out that they used this tool to complete complex projects that originally took a year in just one week. Many users shared their experiences on social media of successfully developing their first software without ever learning programming. Users are using Claude Code to analyze health data, organize expense reports, restore damaged wedding photos, and even monitor the growth of tomato plants.

**As "AI Programming" Becomes Easier, a New Wave Emerges: "Micro-Apps" for Everyone and "Super Programmers" Who Can Replace a Team**

For the general public, the right to software development is being decentralized, and programming has become as simple as sending a WeChat message; for practitioners, the mediocre middle layer is disappearing, and only those "super individuals" who can control AI and replace a team alone can stand at the forefront of the trend.

**Musk Announces Launch of xAI's Colossus 2, World's First GW-Level Computing Cluster, Less Than a Year After Construction Started**

Musk also revealed that the cluster will be further upgraded to 1.5 GW in April this year. According to public data, a continuous power load of 1 GW has exceeded the peak power consumption of San Francisco, equivalent to the energy consumption level of a large power plant or a large industrial manufacturing base.

**AI Giants Head to Court: Musk Sues OpenAI and Microsoft for Up to $134 Billion in Damages**

Musk accused OpenAI of violating its non-profit original intention and forming a fraudulent alliance with Microsoft. The case will open in California in April. OpenAI called the lawsuit "groundless", emphasizing that it is still controlled by a non-profit organization after transferring 27% of its equity to Microsoft.

**Musk's "First Human with Brain-Computer Interface" Makes Debut: Non-Invasive Online Upgrades Available, "Immortality Code" Written**

Noland Arbaugh, the first Neuralink implant recipient, revealed that the brain-computer interface has achieved wireless upgrades, which can continue to evolve through three methods: application updates, firmware OTA and hardware iteration, and even fix problems without secondary surgery. Musk confirmed that a "dual-chip" solution may be launched in the future to help paralyzed patients stand up. Meanwhile, Merge Labs, co-founded by OpenAI CEO Sam Altman, has received huge financing, challenging Neuralink with a non-invasive ultrasonic technology route, and competition in the brain-computer interface track is becoming increasingly fierce.

**TSMC: To Build "Super Large Wafer Fab Cluster" in U.S., Buying Additional 900 Acres as Existing Land Insufficient**

TSMC originally purchased 1,100 acres of land in Arizona to build six wafer fabs, two advanced packaging facilities and a research and development center. However, with the upgrade of the expansion plan, this land has become insufficient, prompting the company to purchase an additional 900 acres. TSMC stated that it has strong confidence in the AI megatrend, which is the reason for its increased capital expenditure and expansion in Taiwan, China and the United States.

**Is TSMC's New "Golden Cycle" Coming? Goldman Sachs: Advanced Packaging Becomes Second Growth Engine; 60% Gross Margin May Be the "New Normal"**

Goldman Sachs believes that TSMC has launched an AI-driven multi-year growth cycle and raised its target price to NT$2,600. TSMC revised up the compound annual growth rate of AI and overall revenue; advanced packaging has become the second growth engine, accounting for more than 10% in 2026 as expected. The gross profit margin is stable above 60%, and capital expenditure has accelerated to US$56 billion. Goldman Sachs maintained its buy rating, emphasizing that supply-demand tightness will continue until 2027.

**ByteDance Releases Next-Generation Folding Model SeedFold, Outperforming Google's AlphaFold 3**

In the FoldBench benchmark test, SeedFold set new SOTA records in multiple tasks such as protein monomers and antibody-antigen complexes. The research revealed three major scaling strategies: widening the model is more effective than deepening it, expanding the pairwise representation dimension to 512; introducing a linear triangular attention mechanism to reduce computational complexity from cubic to quadratic; building a 26.5 million-sample training set through knowledge distillation.

**China Securities Regulatory Commission Opens Investigation into Ronbay Technology Over Suspected Misleading Statements in Major Contract Announcement**

**Ronbay Technology: "Total Contract Amount of 120 Billion Yuan" Signed with CATL Is an Estimate by the Company, Subject to Uncertainty**

Ronbay Technology announced in response to the Inquiry Letter issued by the STAR Market that the agreement signed with CATL does not stipulate the procurement amount. The "total contract amount of 120 billion yuan" is an estimate made by the company. The final actual sales scale will be determined based on the raw material prices and quantities at the time of signing the actual orders, and the sales amount is subject to uncertainty.

**PV Giants Tongwei and LONGi Forecast Net Losses of Nearly 10 Billion Yuan; No Turning Point in Industry's In-Depth Adjustment**

Tongwei Co., Ltd. and LONGi Green Energy Technology Co., Ltd. successively disclosed their annual performance forecasts, expecting net losses of 9-10 billion yuan and 6-6.5 billion yuan respectively, indicating that the in-depth adjustment of the industry is still continuing.

## Selected Research Reports

**Morgan Stanley 2026 Global Outlook: Strong U.S. Economy Delays Rate Cuts; BOJ to Stand Pat Throughout the Year; China's Exports to Expand Continuously**

Morgan Stanley believes that the policy paths of major global economies will diverge significantly: strong U.S. consumer data and inflationary pressures transmitted by tariffs will force the Fed to postpone rate cuts to the middle of the year, while the Bank of Japan may keep interest rates unchanged throughout the year due to falling inflation and political uncertainty. The report also emphasized that China's share in global exports is expected to continue to expand, becoming a stable cornerstone of its economic growth.

**Bank of America Merrill Lynch's Top 10 Grey Swans for 2026: Uranium Prices Surge 50%; England Wins World Cup**

Bank of America Merrill Lynch predicts that U.S. economic growth will reach 2.6%, equal-weighted U.S. stock indexes will outperform the market, a weaker U.S. dollar will trigger a "rebalancing" in the global foreign exchange market, uranium prices will surge more than 50% to a record high, unmanned military systems will drive the upgrading of the defense sector, emerging market bonds will become the best global assets with declining default rates, CLO ETFs may outperform U.S. Treasuries, ETF assets will surpass the market capitalization of G7 countries (excluding the U.S.), ample liquidity will support a bumper year for closed-end fund issuance, and England will win the World Cup.

**"Emerging Markets Guru" Mark Mobius: Will Never Buy Gold Now Unless It Plunges 20%; Bullish on Chinese Market**

Mark Mobius, the "guru of emerging markets", issued a warning amid record high gold prices, stating that he will never buy gold at present unless it corrects 20% from its peak. He believes that a potential rebound in the U.S. dollar may weaken the price of precious metals. This view is in sharp contrast to most investors who are still bullish on gold prices. In addition, he continues to be optimistic about Asian stock markets, especially believing that China's breakthroughs in the technology sector will support stock market gains.

**Goldman Sachs' Next Round of Construction Boom: Data Centers, Power and Healthcare to Lead in 2026**

Goldman Sachs stated that driven by demand for data centers, power infrastructure and healthcare, U.S. private non-residential construction spending is expected to resume growth in 2026, with growth rate rising to 5% in 2027. Leading indicators such as the Dodge Index show that structural forces are replacing traditional cycles, leading the construction industry to usher in a new round of prosperity after adjustments in 2025.

# Domestic Macroeconomy

**State Council Executive Meeting**: Accelerate the cultivation of new growth drivers in service consumption and implement the paid vacation system. According to Xinhua News Agency, the meeting pointed out that efforts should be made to accelerate the development of new growth areas in service consumption, support the flourishing emergence of new business forms, models and scenarios, and increase the supply of high-quality services. It is necessary to improve the long-term mechanism for boosting consumption, formulate and implement the 15th Five-Year Plan for expanding consumption and the income increase plan for urban and rural residents, speed up the cleanup of unreasonable restrictions in the consumption sector, implement the paid vacation system, and promote the steady improvement of consumption capacity and willingness, as well as the interactive upgrading of consumption structure and industrial structure.

The China Securities Regulatory Commission (CSRC) publicly solicited opinions on the first departmental regulation for the derivatives market, encouraging the use of the derivatives market for hedging purposes.

**Deciphering 2025 Financial Closing Data**: The rebound of M2 stemmed from the return of wealth management funds; the slowdown of social financing was affected by the base effect; the credit structure continued the pattern of "strong corporate sector, weak household sector". New social financing in December reached 2.21 trillion yuan, a year-on-year decrease of 645.7 billion yuan. CICC stated that this was due to the base effect — in the same period of 2024, the concentrated issuance of 2 trillion yuan of refinancing bonds pushed up the base, leading to a "rhythm mismatch" this year. In terms of credit, the structural feature of "strong corporate loans, weak household loans" remained prominent. Corporate credit showed unexpectedly strong resilience, significantly higher than the same period in previous years. The rebound of M2 mainly came from the structural adjustment on the liability side of banks. The yield advantage of wealth management products and negotiable certificates of deposit narrowed, leading to the return of non-bank funds to the bank balance sheet and their conversion into deposits. Although the M1 reading was not high, signs of "household deposit migration" did not stop.

**Analysis of December Forex Settlement and Sales Data**: China's forex settlement surplus reached a record high of 99.9 billion US dollars in December. Contrary to the depreciation of the Japanese yen and South Korean won caused by capital outflows, China's robust exports, coupled with overseas capital inflows driven by the strong performance of A-shares, pushed the RMB to strengthen against the trend, with the CFETS RMB Index breaking through the 99 mark.

**State Grid's 15th Five-Year Plan Investment to Reach 4 Trillion Yuan**: State Grid announced that its investment scale during the 15th Five-Year Plan period will hit a record high of 4 trillion yuan, a 40% increase compared with the 14th Five-Year Plan. The investment plan covers new power systems, ultra-high voltage power grids, distribution network construction in remote areas, and consolidation of digital and intelligent infrastructure. Chairman Zhang Zhigang stated that the company will give full play to the basic supporting and investment-driven role of power grids, and help expand domestic demand and stabilize growth with greater efforts and more concrete measures.

# Domestic Companies

**Booming AI Demand Drives Montage Technology's Expected 2025 Net Profit Growth of 52.29%-66.46% with Surge in Interconnect Chip Shipments**: Benefiting from the strong industry demand brought by the AI industry trend, Montage Technology expects to achieve a net profit attributable to shareholders of 2.15 billion to 2.35 billion yuan in 2025, a year-on-year increase of 52.29% to 66.46%. The company plans to raise 900 million US dollars in its Hong Kong IPO and has locked in heavyweight cornerstone investors such as Alibaba and JPMorgan Chase.

**Shenghong Technology's 2025 Performance Expected to Surge 260.35%-295.00% as AI Computing Demand Boosts PCB Business**: Shenghong Technology forecasts its net profit attributable to listed company shareholders to reach 4.16 billion to 4.56 billion yuan in 2025, a year-on-year increase of 260.35% to 295%. In key fields such as AI computing power, data centers and high-performance computing, the company has mass-produced a variety of high-end products, driving the product structure to upgrade towards high value and high technical complexity. The proportion of high-end products has increased significantly, fueling the company's high-speed performance growth.

**Ford in Talks with BYD to Purchase Batteries, Including Plans to "Ship to Factories Outside the U.S."**: Reports indicate that Ford is in advanced negotiations to procure batteries from BYD for some of its hybrid models. The two sides are discussing plans including shipping the batteries to Ford's factories outside the United States, but the deal has not yet been finalized. As Ford scales back its pure electric vehicle business and increases investment in hybrid models, the company is in urgent need of high-quality battery suppliers, a field where BYD boasts mature manufacturing capabilities.

**Northern Rare Earth: 2025 Net Profit Expected to Jump 116.67% to 134.60% YoY**: Northern Rare Earth expects its 2025 performance to double, driven mainly by the first-ever annual "sales exceeding production" of lanthanum-cerium products, which significantly eased inventory pressure. Meanwhile, the company effectively reduced production costs through the "Five Unifications" management model. The company is accelerating the extension from resource mining to downstream high-value-added sectors, with multiple deep-processing projects put into production, verifying the strategic effectiveness of its full industrial chain layout.

**Silver Price Surge Hits Photovoltaic Industry Hard**: Data from BloombergNEF shows that the proportion of silver paste in the total cost of photovoltaic modules has soared from 3.4% in 2023 to the current 29%. Silver paste has officially replaced silicon materials as the largest cost component of photovoltaic modules. Amid the silver price surge, photovoltaic manufacturers are raising prices and accelerating plans to replace silver with cheaper materials such as copper. The industry's silver usage is expected to decrease by about 17% this year.

# Overseas Macroeconomy

**U.S. to Impose Taxes on Global Sovereign Wealth Funds**: The U.S. Internal Revenue Service (IRS) plans to revise Section 892 of the tax code, significantly expanding the definition of "commercial activities", which will directly impact global sovereign wealth funds and public pension funds. Once the new regulations take effect, sovereign funds' direct lending, private equity co-investments and other activities will lose tax exemptions, and even face the risk of retroactive taxation. This may force hundreds of billions of US dollars to abandon direct investment models, shift to passive strategies or withdraw from the U.S. market.

**Trump Plans Emergency Intervention in Power Market: Force AI Giants to Sign 15-Year Long-Term Contracts to Fund 15 Billion US Dollar New Power Plants**: Reports suggest that the Trump administration intends to announce an emergency intervention plan, mandating tech giants to participate in special wholesale auctions and sign 15-year long-term power contracts to provide revenue guarantees for new power plants worth approximately 15 billion US dollars. The move aims to "contain" the soaring costs of data centers within tech companies and safeguard residential electricity prices, preventing high electricity bills from becoming a "political bomb" for the Republican Party in the midterm elections.

**Major Overhaul by PJM, the Largest U.S. Power Grid: Crack Down on Data Center "Load Inflation", Rarely Cut Short-Term Load Forecasts**: PJM lowered its 2028 summer peak demand forecast by 2.6%, mainly due to stricter scrutiny on large loads such as data centers. Analysts point out that this adjustment reflects project delays rather than weak demand. In the long run, PJM raised its 2036 annual load growth rate to 3.6%, indicating a continued tight power market, where capacity auction prices may still hit the ceiling in the future.

**RBI Support Fades and US Dollar Rebounds, Indian Rupee Faces "Perfect Storm"**: On Friday, the rupee fell as much as 0.6% to 90.8438 against the US dollar, hitting its lowest level since December 17 last year. A combination of factors including continued foreign capital outflows from the stock market, a strong US dollar, limited RBI support and a trade impasse with the US pushed this Asia's weakest currency to a one-month low.

**"Father of HBM": High-Bandwidth Flash (HBF) Commercialization Progress Exceeds Expectations, to Be Integrated into GPUs in 2-3 Years with Market Size Surpassing HBM**: Kim Joungho's latest forecast shows that HBF technology is expected to be integrated into GPU products of NVIDIA, AMD and other companies within the next 2-3 years. Leveraging the 10-fold capacity advantage brought by NAND stacking, HBF will fill the storage gap of HBM in AI inference scenarios. The market expects large-scale application of HBF to be achieved in the HBM6 phase, with its market size potentially surpassing HBM by 2038, becoming a key force in next-generation high-bandwidth storage.

# Overseas Companies

**Anthropic Releases "AI Job Displacement Report": Higher Education Equals Higher Displacement Risk**: The Anthropic report points out that AI has a significant acceleration effect on complex tasks, especially in jobs requiring higher education backgrounds, with efficiency gains of up to 12 times, which may trigger the risk of "deskilling". However, the key lies in human-AI collaboration — through effective guidance, humans can extend the effective duration of AI processing complex tasks by nearly 10 times, highlighting that the ability to control AI is more important than simply relying on AI in future work.

**Huang "Takes the Lead": While Everyone Competes for TSMC Capacity, NVIDIA Is "Grabbing Land"**: While tech giants are scrambling for TSMC's production capacity, NVIDIA CEO Jensen Huang has taken an early lead in "land grabbing". TF International Securities analyst Ming-Chi Kuo revealed that during Huang's visit to Tainan last November, he proposed to pay to secure the reserved P10 and P11 plots adjacent to the Fab 18 plant, with targets even including the P12 plot. Meanwhile, NVIDIA may have surpassed Apple to become TSMC's largest customer in some quarters of 2025.

**Old Technology Revival: Memory Economics May Force NVIDIA to Restart Production of Older GPUs to Fill Market Gaps**: Faced with memory shortages, NVIDIA is optimizing product supply based on the "profit per GB of memory" model, prioritizing the production capacity of 8GB and flagship models. This move has led to supply constraints for mid-range large-memory models such as the RTX 5060 Ti 16GB. To fill the market gap, NVIDIA may restart production of older GPUs such as the RTX 3060 and use outdated memory like GDDR5 to maintain the consumer-grade product line, whose strategic priority has been downgraded amid AI demand.

**CoreWeave Investor Meeting: AI Demand "Unsolvable", Customers Willing to Sign Long-Term Contracts 12 Months in Advance**: JPMorgan Chase believes CoreWeave is at the center of the AI computing power demand boom, and the company's execution capabilities and financing innovations have made it a market leader. However, its growth is supported by extremely high customer concentration, huge capital expenditures and macroeconomic sensitivity. The report gives a "Neutral" rating, suggesting that it may provide a "bumpy and volatile" journey, suitable only for investors with specific risk appetites.

**Insider Buying Spree: Micron Technology Director Buys 7.8 Million US Dollars Worth of Shares**: Micron Technology director and former TSMC chairman Teyin Liu spent approximately 7.8 million US dollars to increase his holdings in the company, marking the first insider purchase since 2022 and sending a strong signal of confidence. Although the move boosted the stock price, market divergence remains — Citigroup has removed Micron from its focus list, indicating capital rotation within the semiconductor sector.

**ASML's "Prime Time": Morgan Stanley Expects Strongest Profit Growth in 2027 Amid Advanced Process Capacity Expansion Wave**: Morgan Stanley stated that driven by the AI wave, ASML's sales are expected to reach 46.8 billion euros in 2027, with earnings per share surging 57% year-on-year to a record high. This is mainly due to strong demand from logic foundries such as TSMC and capacity expansion of DRAM memory. Morgan Stanley sharply raised its target price to 1,400 euros and maintained its "Top Pick" status.

**OpenAI Invests Heavily in Brain-Computer Interface, Altman to Compete with Musk Again**: Merge Labs, a brain-computer interface company co-founded by Sam Altman, completed a 252 million US dollar financing round, with OpenAI as the largest investor. Among major brain-computer interface companies, only Neuralink has a larger single-round financing scale than Merge. Unlike competitors such as Neuralink, Merge aims to develop non-invasive brain-computer interface devices. The company plans to first launch medical products and then roll out consumer-oriented devices.

**After Over Two Years of Suspension, Maersk Resumes Red Sea Navigation; Analysts Say "If Red Sea Route Reopens, 6%-8% of Global Container Fleet Will Be Unnecessary"**: A.P. Moller - Maersk announced the official resumption of its Middle East-India to U.S. East Coast route via the Suez Canal, becoming another shipping giant to return to the Red Sea route after CMA CGM. The move is based on improved stability in the Red Sea region, which will shorten Asia-Europe shipping time by two weeks. However, analysts warn that increased shipping capacity may lead to lower freight rates, with Maersk ADR shares falling more than 5% on Thursday.

# Industry/Concepts

1.  **Semiconductors**: ASML, the global leader in lithography machines, closed up 2.03% on the 16th, with its stock price hitting a new all-time high and market capitalization reaching 526.3 billion US dollars (approximately 3.69 trillion yuan), making it the third European stock in history to exceed a market value of 500 billion US dollars. In its latest research report, Morgan Stanley's semiconductor team stated that in the most optimistic scenario, as chipmakers increase spending to meet surging AI demand, ASML's stock price is expected to rise a further 70%.

2.  **Nuclear Fusion**: The 2026 Nuclear Fusion Energy Technology and Industry Conference was held in Hefei on the 16th, with 10 major nuclear fusion energy procurement projects and 4 fusion joint laboratory projects signed on-site. According to the 2026 procurement plan of the Fusion Industry Federation, more than 120 procurement projects will be carried out in 2026 around tasks such as EAST upgrade, CRAFT and BEST, with a total budget of nearly 10 billion yuan.

3.  **Charging Piles**: The National Energy Administration announced on the 17th that China's total social electricity consumption hit a historic high of 10.4 trillion kilowatt-hours in 2025, a year-on-year increase of 5%. This figure is the first for a single country globally, equivalent to more than twice the annual electricity consumption of the United States, and exceeding the combined annual electricity consumption of the European Union, Russia, India and Japan. The tertiary industry and urban-rural residential electricity consumption contributed 50% to the growth of electricity consumption. The electricity consumption of charging and swapping services, as well as the information transmission, software and information technology services industry, increased by 48.8% and 17.0% respectively, which are important drivers for the growth of electricity consumption in the tertiary industry.

4.  **Robotics**: On January 17, the first rehearsal of the **2026 CCTV Spring Festival Gala** was successfully completed. It was reported that the Year of the Horse Spring Festival Gala represents the further upgrading of "technology + art", integrating "technological intelligent manufacturing" into stage design and content creation to enrich people's colorful imagination of the Chinese New Year atmosphere. Following the intelligent robots performing yangko dance that became "top-tier stars" in the Year of the Snake Spring Festival Gala, robots will once again take the stage, demonstrating the new atmosphere of China's scientific and technological progress with creative sparks of technology and novelty.

5.  **Commercial Aerospace**: On January 17, data from the CSRC's public offering tutoring and disclosure system showed that CAS Space, a commercial aerospace enterprise, recently completed its tutoring work and entered the tutoring acceptance stage. This makes CAS Space another commercial aerospace company that has achieved key IPO progress after LandSpace. CAS Space is a high-tech enterprise incubated by the Institute of Mechanics, Chinese Academy of Sciences, mainly engaged in the development of a series of medium and large rockets, customized aerospace launches, suborbital scientific experiments and space tourism. The Lijian series of rockets are the key projects of CAS Space. Among them, Lijian-1 has taken the lead in entering a mature stage of large-scale mass production, batch delivery and normalized operation. The Lijian-2 rocket, whose theoretical cost is approaching the world's top level, has entered the final sprint stage before its maiden flight.

6.  **Liquid Metals**: According to the Securities Times, a research team including the Technical Institute of Physics and Chemistry of the Chinese Academy of Sciences has recently made a series of progress in the field of liquid metal flexible electronic manufacturing, providing a number of innovative technical solutions for the high-performance, green and large-scale application of flexible electronics. The non-destructive etching patterning technology proposed by the team breaks the inherent bottlenecks of traditional additive and subtractive manufacturing processes, realizing circuit patterning preparation without material loss, with a resolution of 5μm, and is compatible with 8 types of rigid and flexible substrates such as PDMS, paper and biological tissue skin. The team also proposed a shape-adaptive conformal electronics preparation technology, overcoming the difficulty of manufacturing three-dimensional curved surface electronic devices.

# Upcoming News Preview

- China's Q4 GDP

- China's December industrial added value above designated size, December total retail sales of consumer goods, January-December fixed asset investment, December unemployment rate

- December housing prices in 70 large and medium-sized cities in China

- From January 19 to March 4, the Ministry of Commerce of China, together with relevant units, will hold the 2026 National Online Spring Festival Shopping Festival

- World Economic Forum – Winter Davos, held from January 19 to 23

- U.S. stock markets closed for Martin Luther King Jr. Day holiday

- The Federal Reserve enters the quiet period before the month-end interest rate meeting

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