Breakfast | The U.S. government shutdown crisis is over! Buffett is bottom-fishing Occidental Petroleum at the end of the year

Market Overview Last Week

The U.S. PCE data eased inflation concerns, leading to a major rebound in U.S. stocks on "Triple Witching Day," with the Dow Jones Industrial Average rebounding over 1,000 points at one point, but the Super Central Bank Week still saw three consecutive weeks of declines. The three major U.S. stock indices rose over 1%, marking the first time they all increased in a week, despite cumulative declines throughout the week. Nvidia rose over 3%, making a thrilling turnaround for the week. Tesla fell over 3% against the trend, marking three consecutive days of decline.

Key Focus This Week

The 13th meeting of the Standing Committee of the 14th National People's Congress has concluded, and the European and American markets will be closed for the Christmas holiday.

China will announce the profits of industrial enterprises above designated size for November, the Governor of the Bank of Japan, Kazuo Ueda, will give a speech, and the U.S. will release the preliminary value of durable goods orders for November.

Why Did U.S. Stocks Rebound Significantly Last Friday? Partly Due to a Key Statement from a Dovish Federal Reserve Official

Chicago Federal Reserve President Austan Goolsbee had previously hinted at a possible slowdown in interest rate cuts this year, which led the market to lower its expectations for rate cuts next year. After seeing the latest inflation data, he stated on Friday that there is still "considerable" room for rate cuts in the next 12 to 18 months. His latest remarks reaffirmed his support for rate cuts, undoubtedly injecting confidence into the market.

U.S. Republicans Make a Last-Ditch Effort to Avoid Government Shutdown

On Friday after U.S. stock trading, the House of Representatives voted overwhelmingly in favor of a short-term government spending bill with 366 votes for and 34 against, which will ensure continued funding for the U.S. federal government, extending the funding period from this Friday night to mid-March next year.

In the early hours of Saturday Eastern Time, the bill passed in the Senate with a significant majority of 85 votes for and 11 against, and it was sent to President Biden for signing.

Musk's "Chaos on Capitol Hill," Twitter's Strong Intervention in U.S. Politics

Musk launched a furious attack on Twitter against the short-term agreement reached by the U.S. House of Representatives and the Democrats regarding government spending.

Analysts believe that Musk's explosive political move may be a rehearsal for the Trump 2.0 era's action model, aimed at pressuring Congress. Some also claim that the consensus at Mar-a-Lago is that Musk is an effective weapon for pressuring Congress and a scapegoat for any backlash.

Latest Weight Loss Drug Phase III Trial Falls Short of Expectations, Novo Nordisk Plummets 27%, Setting Record for Largest Decline

Trial results showed that patients receiving the CagriSema therapy lost an average of 22.7% of their weight after 68 weeks. If volunteers who dropped out of the trial are included, the average weight loss effect drops to 20.4%, both below the company's previous expectation of 25%. Novo Nordisk closed down nearly 21%, and Nordic stock indices plummeted over 5%.

Buffett's Year-End Stock Purchases: Increasing Holdings in Occidental Petroleum and Other Companies

Buffett took advantage of the three consecutive days of declines in U.S. stocks this week to increase his holdings in several companies. According to regulatory filings, Berkshire Hathaway increased its holdings by 8.9 million shares of Occidental Petroleum (worth $405 million), 5 million shares of Sirius XM (worth $113 million), and $45 million in VeriSign stock from Tuesday to Thursday. Overall, Berkshire invested over $560 million in three days

Reports say Google will add "AI mode" option to its search engine to compete with ChatGPT

According to reports, the "AI mode" interface of Google Search is almost identical to Google's Gemini AI chatbot. Analysts point out that Google's move to introduce a "switch to AI mode" is actually expanding the audience for Gemini, which also reflects the pressure Google faces from chatbots like ChatGPT and Perplexity.

Broadcom CEO: Expects the investment boom in artificial intelligence by major tech companies to last until 2030

The CEO of Broadcom also stated that the company's clients are formulating AI infrastructure investment plans for the next three to five years, with rapid progress. By 2027, Broadcom's clients are expected to deploy up to 1 million chips in AI chip clusters, which could bring hundreds of billions of dollars in annual revenue growth for Broadcom's AI chips.

China's LPR remains unchanged for two consecutive months in December

The one-year LPR remains at 3.1%, and the five-year LPR remains at 3.6%. Wen Bin, chief economist at Minsheng Bank, expects that the intensity of monetary policy regulation will continue to increase next year, with room for further cuts in reserve requirement ratios and interest rates, which will also drive LPR quotes further down. CITIC Securities expects a reduction of 40 to 50 basis points in the reverse repurchase rate next year, with potentially larger reductions in LPR and loan rates.

The Federal Reserve's favorite inflation indicator falls short of expectations, with the U.S. core PCE growth rate in November at its lowest in six months

The U.S. PCE price index in November rose 2.4% year-on-year, below the expected 2.5%, but the highest since July; excluding the volatile food and energy sectors, the core PCE price index in November rose 2.8% year-on-year, unchanged from the previous value, and increased 0.1% month-on-month, marking the lowest since May. The "New Federal Reserve News Agency" stated that both the overall PCE and core PCE showed moderate performance in November; however, the data will not constitute news for the Federal Reserve, as knowing the PPI, CPI, and import prices for a given month allows for fairly reliable predictions of PCE