On January 7th (Tuesday), in Pre-Market Trading, the three major Equity Index futures in the USA showed mixed results. As of the time of writing, Dow futures rose by 0.08%, S&P 500 Index futures increased by 0.05%, and Nasdaq futures decreased by 0.01%.

As of the time of writing, the DEGUODAXZHISHU rose by 0.32%, the UK FTSE100 Index fell by 0.24%, the France CAC40 Index increased by 0.70%, and the Europe STOXX 50 Index rose by 0.58%.

As of the time of writing, Crude Oil rose by 0.49%, priced at $73.92 per barrel. Brent crude oil increased by 0.68%, priced at $76.82 per barrel.

Market News

The Federal Reserve issued a rare direct warning regarding the US stock market, with Governor Cook stating that market valuations are too high and may face a significant correction. Federal Reserve Governor Lisa Cook issued a rare direct warning to the stock market on Monday. Cook stated: "Valuations in multiple asset classes are high, including the stock and corporate bond markets, with risk premium valuations nearing historical distribution lows, indicating that the market may have priced itself to the extreme. Therefore, these markets may face a substantial risk of decline due to adverse economic news or shifts in investor sentiment." Fed Chair Powell rarely speaks so plainly about the market, and Cook's remarks evoke former Fed Chair Alan Greenspan's warning of "irrational exuberance" in 1996. However, unlike Greenspan's comments that resulted in market volatility, Cook's warning was largely ignored by the market. The S&P 500 Index climbed back above 6000 points on Monday, approaching historical highs.

The Forex market turned upside down within 24 hours, all because of Trump! In 2025, "high volatility" will be the key word in the currency market. On Monday, the Forex options market, worth over 300 billion dollars, started off quietly until political headlines from Canada and the USA triggered the busiest Forex options trading day in nearly two months — the trading volume in the Forex options market rapidly surged, indicating that political factors in 2025, especially those related to Trump himself, will dictate the trading trends in the Forex market.

Tariff threats and strike worries lead to a surge in Asia-US container shipping rates. In the past month, spot container shipping rates for goods shipped from Asia to the USA soared as companies seek to avoid higher tariffs and replenish inventories before potential strikes could shut down ports responsible for about half of US marine transportation trade. According to data from Oslo-based freight platform Xeneta, as of January 1, the price for booking a 40-foot container from Asia to the US West Coast was 6,000 dollars, up 50% from 4,004 dollars a month ago. The East Coast freight rate was 7,100 dollars, an increase of 31%. Xeneta's senior shipping analyst Emily Stausbøll stated that the market is tightening due to "many uncertainties." "2024 will be a challenging year for shippers, and life will not get any easier as we enter 2025."

US AI startups secured extraordinary funding in 2024, reaching a record 97 billion dollars. Last year, investments from venture capitalists into US artificial intelligence startups soared, totaling a record 97 billion dollars, with companies like Elon Musk's xAI, OpenAI, and Anthropic receiving billions in significant investments. According to the latest data released by PitchBook on Tuesday, this trend has led to AI investment accounting for an increasing share of all startup investments, nearly half of the total 209 billion dollars raised by US startups last year. Although the total funding for startups has slightly increased this year, rising by about one-third from 2023, there is a noticeable divergence within the venture capital industry. Specifically, large, mature companies and some of the biggest and hottest startups find it easier to raise funds.

Wall Street's bond bears: the yield on the ten-year US Treasury will rise to 5.5% by the end of the year. One of Wall Street's largest bond bears has had a good start this year, as US Treasury yields are nearing his forecast. Padhraic Garvey, global debt and rates strategy leader at ING Groep, anticipates that the yield on the ten-year US Treasury will rise to 5.5% by the end of 2025, while that yield closed around 4.63% on Monday. His prediction for the ten-year US Treasury yield exceeds the second most pessimistic forecast by about 40 basis points. Padhraic Garvey's forecast is based on the expectation that the Federal Reserve will maintain restrictive rates to offset the risks posed by President Trump's tariff and tax policies, which will put pressure on prices, as well as the risk that investors will be deterred by the Federal Reserve.

Stock News

"Tech Spring Festival" heats up! Huang Renxun debuts multiple new products, decoding NVIDIA's (NVDA.US) ambitions in AI strategy. On Tuesday Beijing time, NVIDIA (NVDA.US) CEO Huang Renxun delivered a keynote speech at the International Consumer Electronics Show (CES), known as the "Tech Spring Festival." He unveiled a series of new products, including a new type of GeForce graphics processing unit (GPU) for gaming computers, which uses the same Blackwell design as NVIDIA's AI accelerators. NVIDIA was initially known for manufacturing graphics cards for video games. However, these products now pale in comparison to its accelerator chips for datacenters. Nevertheless, gamers still crave machines equipped with GeForce, a sector that brings in about 10 billion dollars in annual revenue. NVIDIA also launched the Cosmos foundational model platform, which covers generative models, aimed at accelerating the development of physical AI systems such as self-driving cars and robots.

Qualcomm (QCOM.US) showcased its new AI Chip at the "Tech Spring Festival," with PCs priced as low as $600. Qualcomm launched a new chip designed to power personal computers (PCs) that can run the latest Artificial Intelligence (AI) software, with PCs equipped with the new chip expected to start at $600. Qualcomm announced at the International Consumer Electronics Show (CES 2025), known as the "Tech Spring Festival," that the Snapdragon X platform consists of an 8-core Oryon central processing unit, graphic components, and a dedicated AI chip, and will run Microsoft (MSFT.US)'s Copilot+ software. Qualcomm also stated that PC manufacturers like Dell (DELL.US) will release laptops based on this new product in early 2025.

Aurora (AUR.US), NVIDIA, and Continental are collaborating to develop self-driving trucks. Autonomous driving technology company Aurora, automotive supplier Continental, and NVIDIA have formed a long-term strategic partnership to deploy self-driving trucks at scale. This collaboration will utilize NVIDIA's next-generation DRIVE Thor system-on-chip and DriveOS, which will be integrated into the SAE Level 4 autonomous driving system Aurora Driver. The mass production plan for these self-driving trucks is set for 2027, with initial services planned to launch in Texas in April 2025.

Indonesian officials will meet with Apple (AAPL.US) regarding a $1 billion investment, which may affect the ability of the iPhone 16 to be launched in Indonesia. The Indonesian Ministry of Industry is scheduled to have a crucial meeting with Apple this Tuesday, focusing on Apple's investment plans in Indonesia, a necessary step for the launch of the new iPhone 16 in the Indonesian market. Last year, Apple faced a sales ban in Indonesia after failing to meet the government's requirement of at least 40% local smartphone components. Although Apple has not yet established a manufacturing plant in Indonesia, a country with a population of 0.28 billion, it has laid out plans for a developer academy since 2018, indicating its commitment to long-term development in the region.

United States Steel (X.US) and Nippon Steel are suing Biden, potentially gaining more time to negotiate with Trump. United States Steel and Nippon Steel are unlikely to persuade the court to overturn President Biden's decision to block their $14.9 billion merger, but their lawsuit may allow them more time to reach an agreement with the incoming President Trump. In the lawsuit announced Monday, the two companies argued that Biden's blocking of the merger through a false national security review deprived them of their rights to due process, violating the constitution. Although the lawsuit itself may be destined to fail, if the two companies can convince Trump to change his opposition, it might breathe new life into the deal.

Toyota Motor (TM.US) will invest over $44 million in the Japanese space startup Interstellar. Japanese space startup Interstellar Technologies, which develops satellite launch vehicles, announced on Tuesday that Toyota Motor will invest 7 billion yen (approximately $44.4 million) through its mobility technology subsidiary, Woven by Toyota. Interstellar Technologies aims to mass-produce lightweight rockets and compete with large companies in the growing commercial space industry one day. Toyota stated that the company hopes to leverage its experience in mass-producing automobiles to collaborate with Interstellar Technologies on rocket production.

Important economic data and event forecasts.

Beijing time 21:30: USA November trade balance (in billions of dollars).

Beijing time 21:55: USA Redbook commercial retail sales year-on-year rate for the week ending December 30 (%).

At 23:00 Beijing time: USA's ISM Non-Manufacturing PMI for December, USA's JOLTs Job Openings for November (ten thousand).

The next day at 5:30 AM Beijing time: USA's API Crude Oil Inventory Change for the week ending January 3 (ten thousand barrels).

At 21:00 Beijing time: 2027 FOMC voting member and Richmond Fed President Barkin will give a speech.