Pre-market market trends

1. On January 3 (Friday), the futures of the three major US stock indexes rose sharply before the US stock market. As of press release, Dow futures were up 0.14%, S&P 500 futures were up 0.24%, and NASDAQ futures were up 0.40%.

2. As of press release, the German DAX index fell 0.22%, the UK FTSE 100 index fell 0.08%, the French CAC40 index fell 0.73%, and the European Stoxx 50 index fell 0.39%.

3. As of press release, WTI crude oil fell 0.33% to $72.89 per barrel. Brent crude oil fell 0.34% to $75.67 per barrel.

Market news

Damo: The dominance of big tech stocks will be shaken in 2025. Last year, the S&P 500 surged 23%, and more than half of that increase was created by brisk tech giants. As profit growth slows, it is likely that it will be difficult for these giants to dominate the market again in 2025. Lisa Shalett, chief investment officer of Morgan Stanley's wealth management division, said in an interview that the slowdown in profits “may surprise some die-hard players who bet on high double-digit returns” and that “the idea that they can trade together and lead the market as a group may be shaken in 2025.” She said some earnings expectations in the stock price “may be too ambitious.” Notably, among Wall Street professionals, Lisa Shalett is not the only one who thinks that the “Big Seven” dominance will eventually end. At Bank of America, Savita Subramanian warned that growth expectations for giants are close to record highs, and this is exactly when their profits will slow down. Companies from Goldman Sachs to Citi are urging customers to diversify their investments outside of tech giants.

KITU Macro: US stocks will complete a “hat-trick” of 20% increase in 2025. According to KITU's macro strategist, the US stock market is likely to grow by more than 20% for the third year in a row in 2025. If this forecast becomes a reality, this will be the only second time in US stock history that it has grown on this scale for three consecutive years. The last time US stocks achieved annual growth of 20% or more was during the internet bubble in the late 1990s. At that time, the S&P 500 index rose 31% in 1997, 27% in 1998, and 20% in 1999. The S&P 500 index returned about 24% and 23% in 2023 and 2024, respectively. The report points out that the two major drivers that will continue to drive the bull market this year are similar to last year: investors' enthusiasm for artificial intelligence (AI) and US exceptionalism. Diana Iovanel, senior market economist at KITU Macro, said, “We believe that enthusiasm around AI will further boost the prices of large US technology stocks, particularly through higher valuations.” Iovanel stressed that compared to the Internet bubble period, the current price-earnings ratio of US stocks is still far below its peak, which suggests that there is room for further growth in US stocks. Another reason for the good performance of the US stock market is that the US economy is firmly rooted. Iovanel said that the US economy should continue to outperform major developed economies in 2025, which will help raise corporate profit expectations.

US bond yields have risen and investors' profits have come to an end, and global equity fund capital inflows have shrunk sharply. In the week ending January 1, investors' demand for global equity funds shrunk due to rising US bond yields leading to cautious investor sentiment and the end of a period of weak trading at the end of the year. According to LSEG Lipper's data, in the week ending January 1, global equity funds attracted a net inflow of 4.93 billion US dollars, a decrease of 86% compared to the previous week's net inflow of about 35.1 billion US dollars. The MSCI Global Index had a cumulative increase of more than 15% in 2024, but fell 1.5% in the week ending January 1 because investors chose to make a profit after the stock market surged last year. Meanwhile, rising US bond yields have dampened investors' interest in stocks. According to the data, the 10-year US Treasury yield rose to 4.641% last week, the highest level since May 2, 2024.

Individual stock news

Behind Apple's (AAPL.US) stock price approaching a new high, the product fell short of expectations, and weak growth is now worrying. Apple was close to a record high at the close of 2024, but at the same time there were more signs that its products were disappointing. According to a new survey, Apple intelligence is important to iPhone users, but the initial features didn't provide much value; 47.6% of iPhone users wanted artificial intelligence features, but in the SellCell survey, 73% of respondents were not satisfied with the current Apple smart options. Stone Fox Capital said it is still extremely bearish on Apple stock, saying there are signs that Apple Intelligence does not have the expected growth momentum.

Demand is hot in China! Tesla (TSLA.US) held the title of “King of Pure Electric” with record sales in China in 2024. According to data released by Tesla on Friday, its cumulative sales volume in the Chinese market increased by 8.8% in 2024, setting a record high of sales volume in the Chinese market of over 0.657 million vehicles. Although its annual global delivery scale declined for the first time, strong demand in the Chinese market still helped Tesla rank first in the world in terms of “pure electric vehicle” (BEV) sales in 2024, slightly ahead of BYD.

It is rumored that Biden has decided to officially block Nippon Steel's acquisition of American Steel (X.US). According to three people familiar with the matter, US President Joe Biden has decided to officially block Nippon Steel's $14.9 billion deal to buy US Steel. People familiar with the matter added that the White House plans to announce the decision on Friday. Biden has long voiced opposition to the proposed takeover, arguing that US Steel should continue to be owned and operated by Americans, although the White House has never made it clear before that he will block the deal. However, both Nippon Steel and American Steel have previously stated that they plan to take legal action if Biden officially blocks this deal. The outcome of the failed deal will challenge American Steel's next steps. The company may have to restart the sale process, and it may be difficult to find buyers for the entire company. As of press release, US Steel's US stocks fell more than 8% in the premarket on Friday.

Amazon (AMZN.US) may acquire Lyft (LYFT.US), can it disrupt the taxi market in the future? Anita Ramaswamy of The Information believes that Lyft may be an attractive acquisition target for Amazonson, which could help the e-commerce giant expand its robot taxi business and better compete with Tesla and Alphabet's Waymo. With a ride-hailing network of 24 million active users, Lyft will be the “key” to helping Amazon commercialize its autonomous driving ambitions. Obviously, Amazon is already subtly laying out the future transportation market. Through Lyft, Amazon can not only obtain a mature service, but also coordinate the development of more efficient transportation solutions in line with Zoox's technical advantages. This potential acquisition will most likely trigger a ripple effect in the future field of intelligent transportation, as it will naturally have a more disruptive impact on the market.

The US government locked in clean energy supply for ten years: nuclear power giant Constellation (CEG.US) received a 1 billion dollar order. Constellation Energy announced on Thursday that it has received a contract worth 1 billion dollars to supply nuclear power to the US government over the next ten years. This record contract marks one of the largest energy purchases in the history of the US General Services Administration and is also one of the first major climate-focused energy agreements to cover electricity from existing nuclear reactors by the US government. Under the agreement, Constellation will deliver electricity to more than 13 federal agencies. It is estimated that from April 25, the total generation capacity will exceed 10 million megawatt-hours over 10 years, enough to power more than 1 million households each year. After closing up more than 8% on Thursday, as of press release, Constellation's US stocks rose nearly 2% before the market on Friday.

Key economic data and event forecasts

Beijing time 23:00 US ISM manufacturing PMI for December

Beijing time at 00:00 the next day, 2027 FOMC voting committee and Richmond Federal Reserve Chairman Barkin delivered a speech