Breakfast | Three major indices fell, most large tech stocks adjusted, Tesla dropped over 3%

Market Overview

On Monday, both the previously surging precious metals and U.S. stocks experienced a pullback. As traders reduced their bets on tech giants ahead of the year-end, major tech stocks like Tesla, Nvidia, and Meta all saw declines. Tesla fell 3.27%, leading the drop among the seven tech giants, as its supply contract with South Korea's L&F shrank by 99%.

U.S. Treasuries saw moderate buying, with the 10-year Treasury yield falling 1.75 basis points to 4.11%. The dollar traded sideways, while the offshore yuan depreciated before rising again, returning below 7.0.

Cryptocurrencies also experienced significant volatility within 12 hours. Bitcoin once again surged and then retreated, briefly surpassing $90,000 before quickly dropping back below $87,000. Ethereum similarly saw a V-shaped reversal, dropping nearly 5% from its daily high.

Silver faced a "stampede-style" pullback on Monday after breaking through $80, plummeting over 8% in a single day, briefly falling below $71; spot gold dropped about 4.5%, marking the largest single-day decline since late October, nearing $4,300. WTI crude oil rose 1.6%.

During the Asian session, the Shanghai Composite Index recorded a nine-day winning streak before pulling back, with commercial spaceflight and humanoid robots surging. The Guotou Silver LOF experienced significant volatility, with Shanghai silver's gains retreating to 5.7%, while Hong Kong stocks turned lower.

Key News

Vice Governor of the Central Bank Lu Lei: The new generation digital RMB measurement framework, management system, operational mechanism, and ecological system will officially launch on January 1, 2026.

Silver plunged, raising suspicions, with rumors suggesting that a systemically important bank faced a short squeeze in silver futures, speculations point to a major European bank.

Trump: Is considering suing Powell for "serious misconduct," with an announcement on the next Federal Reserve Chair expected in January.

Russia claims 91 drones attacked Putin's residence, while Zelensky denies it, and Trump is "very angry."

Did the U.S. military strike land targets in Venezuela for the first time? Trump claims the military destroyed a "large facility."

Trump met with Netanyahu, issuing threats regarding Iran's nuclear issue once again.

Wall Street unanimously expects U.S. stocks to continue rising in 2026, with no one bearish, but seasoned strategists express concerns about the consensus.

"The first stock of large models" Zhiyu: Hong Kong IPO priced at HKD 116.2, planning to issue over 37 million shares.

Reports: Meta to acquire Manus for billions, with Xiao Hong set to become Meta's vice president.

"I might be early, but I'm not wrong!" Big short Burry once again goes against the market, shorting AI giants Nvidia and Palantir.

Market Closing Report

U.S. and European stock markets: The S&P 500 fell 0.35%, closing at 6,905.74 points. The Dow Jones dropped 0.51%, closing at 48,461.93 points. The Nasdaq declined 0.50%, closing at 23,474.349 points The European STOXX 600 index closed up 0.09% at 589.25 points, reaching a new closing historical high after one trading day.

A-shares: The Shanghai Composite Index closed at 3965.28 points, up 0.04%. The Shenzhen Component Index closed at 13537.10 points, down 0.49%. The ChiNext Index closed at 3222.61 points, down 0.66%.

Bond Market: The yield on the 10-year U.S. Treasury fell by 1.56 basis points to 4.1121%. The yield on the 2-year U.S. Treasury fell by 1.63 basis points to 3.4627%.

Commodities: COMEX gold futures fell by 4.47% to $4349.20 per ounce. COMEX silver futures fell by 7.41% to $71.475 per ounce. COMEX copper futures fell by 4.62% to $5.5695 per pound. WTI February crude oil futures closed up 1.84% at $58.08 per barrel.

News Details

Global Highlights

Vice Governor of the Central Bank Lu Lei: The new generation digital RMB measurement framework, management system, operational mechanism, and ecosystem will officially start implementation on January 1, 2026. Lu Lei, Vice Governor of the People's Bank of China, stated that the "Action Plan for Further Strengthening the Management and Service System of Digital RMB and Related Financial Infrastructure Construction" clarifies that digital RMB will transition from the digital cash era to the digital deposit money era. The future digital RMB will be a modern digital payment and circulation means issued and circulated within the financial system, supported by the central bank's technical assurance and supervision, possessing the liability attributes of commercial banks, based on accounts, and compatible with the characteristics of distributed ledger technology, with functions of monetary value measurement, value storage, and cross-border payment.

• Digital RMB: A new type of bank deposit. Wang Jian from Guosen Securities stated that the digital RMB has transitioned from cash-type version 1.0 to deposit currency-type digital RMB version 2.0, representing a new type of bank account. This means that users have "deposited back" their held digital RMB into a bank account, and into a new type of deposit account. This new account can enjoy the high efficiency of past account payments while also benefiting from new features such as smart contracts.

Silver plummets, suspicions arise, have major Wall Street banks reached their limit? Spot silver experienced a rollercoaster in early trading on Monday, amid rumors on overseas social platforms that a systemically important bank faced a short squeeze in silver futures Unable to pay the additional margin of $2.3 billion and was forcibly liquidated, the Federal Reserve urgently injected $34 billion to stabilize the market. There are speculations that the parties involved are major European banks. Analysis shows that even if the rumors are true, with a liquidity reserve of $330 billion at a certain European bank, the pressure of $7.75 billion in expenditures is manageable, "not likely to trigger bankruptcy," but caution is needed as the market may follow a panic logic of "sell first, ask questions later."

Guotou Silver LOF experiences huge fluctuations during trading, with the limit down price soaring to over 9% increase. Guotou Silver LOF announced on Monday that investors who blindly invest in high premium rate fund shares may face significant losses. The net asset value increase of Guotou Silver LOF has lagged behind the silver futures index trend. However, on-site trading investors used the silver futures trend as a benchmark to participate in Guotou Silver LOF trading, pushing the secondary market price of Guotou Silver LOF significantly higher, greatly deviating from the net asset value of the fund shares, resulting in further expansion of the premium.

Why did silver suddenly plunge? Hedge fund veteran warns of five short-term risks. Hedge fund veteran Campbell warned that silver faces short-term risks such as tax-driven year-end selling, pressure from a stronger dollar, margin increases reducing leverage, technical overbought conditions, and threats from copper as a substitute. Additionally, the Bloomberg Commodity Index's rebalancing in January will force passive funds to sell positions equivalent to 9% of the open contracts in the silver futures market.

Trump: Considering suing Powell for "gross incompetence," may announce next Fed chair candidate in January. Trump hinted that he already has a candidate in mind for the next Federal Reserve chair, but is not in a hurry to announce it, possibly doing so in January. He also mentioned again that he might fire current Fed Chair Powell and is considering suing Powell over a renovation project being undertaken by the Fed, citing "gross incompetence."

Russia claims 91 drones attacked Putin's residence, Zelensky denies, Trump "very angry" . The Russian Foreign Minister stated that Russia has identified the targets for retaliation, and Russia does not intend to withdraw from the negotiation process, but will adjust its negotiating position considering the Ukrainian government's shift towards state terrorism. The Russian side claimed that during a call between Trump and Putin, Trump suggested to Zelensky not to seek a breather during their meeting, and stated that the attack on Putin's residence would affect how the U.S. works with Zelensky; Russia agreed with Trump's assertion that negotiations for a Russia-Ukraine peace agreement have entered the final stage. Trump stated that achieving peace in Ukraine still presents some very tricky challenges. Zelensky stated that Trump confirmed the provision of security guarantees to Ukraine and an economic aid plan after the conflict ends

• After communicating separately with Putin and Zelensky over the weekend, Trump stated that "the territorial issue of Ukraine has not been settled yet". Trump stated after the meeting that both Russia and Ukraine are interested in ending the conflict, and relevant negotiations have entered the "final stage," with negotiations concerning territorial issues "about 90% completed." He revealed that the U.S. and Ukraine will reach a "very strong" security agreement. However, core differences still exist. Trump acknowledged that the territorial issue of Ukraine has actually "not been settled yet," and "thorny" issues such as the demilitarization of the Donbas region remain to be resolved.

Is this the first attack by the U.S. military on land targets in Venezuela? Trump claims the U.S. military destroyed a "large facility". Trump did not provide further details about the attack, only stating that a "large factory or large facility" related to ships was destroyed "two days ago"; some U.S. officials indicated he was referring to a drug facility; the White House did not respond to requests for comment. Following the report, crude oil hit a daily high, with U.S. oil rising nearly 3%.

Trump meets with Netanyahu, threatening again over Iran's nuclear issue. Trump threatened that if Iran continues to develop ballistic missiles, he supports strikes against Iran; if Iran develops nuclear weapons, he supports a rapid strike against Iran.

Wall Street unanimously expects U.S. stocks to continue rising in 2026, with no one bearish; senior strategists express concern over the consensus. According to a Bloomberg survey, none of the 21 strategists are bearish, predicting that the S&P 500 index will average a 9% increase in 2026, achieving a fourth consecutive year of gains, creating the longest winning streak in nearly twenty years. Previously bearish institutions like JP Morgan have completely reversed their stance, raising their target to 7,500 points. However, senior strategists warn: when everyone is optimistic, it is concerning, and a few cautious voices point out risks such as overvaluation, Federal Reserve policy, and tariffs.

"The first stock of large models," Zhizhu: Hong Kong IPO priced at HKD 116.2, plans to issue over 37 million shares. Zhizhu Huazhang Technology Co., Ltd. has applied to issue over 37 million shares through a Hong Kong IPO, with an issue price of HKD 116.20 per share, and the stock is expected to start trading on January 8.

Report: Meta acquires Manus for billions, Xiao Hong to serve as Meta Vice President. It is reported that Meta has acquired the company Butterfly Effect, which develops AI applications Manus, for billions of dollars. This is Meta's third-largest acquisition since its establishment, second only to WhatsApp and Scale AI. Before Meta's acquisition, Manus was raising funds in a new round at a valuation of USD 2 billion. "I even doubted whether this was a fake offer." Liu Yuan, a partner at ZhenFund and an angel investor in Butterfly Effect, said that the acquisition negotiations were completed in a very short time, taking only a little over ten days “I might be early, but I'm not wrong!” Big short Burry bets against AI giants Nvidia and Palantir. Michael Burry, the prototype of "The Big Short," is once again betting against Nvidia and Palantir, insisting that the AI craze is a repeat of the internet bubble. He criticizes Nvidia for masking the future asset impairment risks of its clients through accounting logic, pointing out that its official response logic is misleading. Despite often being questioned for "predicting too early," Burry remains steadfast in his bearish logic, stating, "I might be early, but I'm not wrong!"

• Next week CES opens, Nvidia and others need to prove AI can sell. The upcoming CES in Las Vegas will be a key validation for whether AI hardware can open up to the mass market. Tech giants like Nvidia, Samsung, and Lenovo need to prove to consumers that AI is not just a technical demonstration but has actual purchasing value. The focus of the exhibition will be on categories such as AI smart glasses, humanoid robots, and health wearables.

Research Report Highlights

Lyn Alden: Silver may hit $100 in 2026, but it is no longer a “low-risk high-reward” opportunity. Macro strategist Lyn Alden points out that driven by fiscal dominance and currency devaluation, silver is expected to challenge the $100 mark in 2026, but its era of “low-risk high-reward” asymmetric trading has ended. As valuations gradually repair, silver has now entered a “symmetric phase” where the probabilities of price increases and decreases are more balanced. She emphasizes that whether silver rises to $100 or pulls back to $40 next year, it would not be surprising.

New logic for silver price at $200? Financial writer John Rubino predicts tech giants will trigger a “mining acquisition wave”. John Rubino reveals a new logic behind the surge in silver prices: tech giants like Tesla and Google are turning to direct acquisitions of physical silver mines to lock in resources in response to supply risks, “maybe Tesla will buy First Majestic Silver Corp.” Driven by demand for solid-state batteries from Samsung, silver is facing a “non-obtainable” shortage crisis. Rubino predicts a reset target for silver prices at $200 and warns of significant volatility this week.

One ounce of silver is rarely more expensive than a barrel of oil! Is the “new dominant force” in the commodity market here? Silver prices have broken a 45-year record in 2025, with the price of one ounce of silver now higher than that of a barrel of crude oil. Since the launch of WTI crude oil futures trading in 1983, it has been extremely rare for silver prices to consistently exceed those of crude oil, only briefly occurring twice during the pandemic in 2020 Silver has shown strong performance driven by both industrial and investment demand, while the oil market continues to face pressure from oversupply and energy transition.

Review and Outlook

The nine major AI giants in 2025 are in chaos: OpenAI partners with Amazon, while Microsoft is buying the Anthropic model. The AI industry in 2025 enters a year of "full-stack" integration, with nine giants expanding their humanoid robot and hardware landscape while becoming entangled in more complex interdependencies. Google becomes a core supplier with TPU and Gemini 3; OpenAI breaks free from Microsoft dependence through multi-cloud collaboration; Meta leads in devices but struggles with models; xAI and Anthropic are rapidly catching up. This deep restructuring of the industrial chain forces all parties to redefine competitive boundaries in the pursuit of independence and mutual checks and balances.

2025's top ten business events in China: DeepSeek explodes overnight, Labubu ignites global buying spree, "epic" food delivery war. In 2025, China's business landscape reshapes its logic amid dramatic changes, with DeepSeek igniting a global AI cost revolution through extreme cost performance, and the national team launching a "stabilization fund" to steady the financial market. The business battlefield is filled with smoke, as JD.com makes a surprise attack in the food delivery red sea, Alibaba bets on C-end AI, and Pop Mart conquers the globe with Labubu. The hard technology sector also sees frequent good news: L3 autonomous driving officially hits the road, domestic GPUs collectively IPO, and breakthroughs in nuclear fusion and commercial aerospace are achieved.

Jinglin Asset speaks at year-end: 2026 will be another year for AI, and international funds are flowing back to Chinese assets.

Domestic Companies

Semiconductor Manufacturing International Corporation: Plans to issue 547 million shares to five shareholders to acquire 49.00% equity in SMIC North, with a transaction price of 40.6 billion yuan.

EHang's VT35 completed its first public flight in Hefei.

Overseas Macro

The new chairman of the Federal Reserve will take office in May, "good news is all out"? Nomura: The U.S. market from July to November next year "needs special vigilance". Nomura expects the new chairman of the Federal Reserve to lead a rate cut in June, but as the U.S. economy recovers, there may be strong internal opposition within the FOMC to further rate cuts. This policy divergence could not only weaken market confidence in the new chairman but also trigger tensions between the Federal Reserve and the Trump administration. This uncertainty is expected to peak from July to November next year, when there may be a trend of "fleeing from U.S. assets."

The Bank of Japan's December meeting minutes indicate "real interest rates remain very low," hinting at more rate hikes. The minutes clearly show that the Bank of Japan's policy rate has not yet reached a neutral level A committee member pointed out that there is still a considerable distance from the neutral interest rate level. Economists expect the Bank of Japan to raise interest rates again in about six months, with most believing that the terminal rate for this round of rate hikes will be 1.25%.

Overseas Companies

Nomura: AI demand unexpectedly strong, memory supercycle expected to last at least until 2027. Nomura predicts that the memory "supercycle" will continue until 2027, primarily due to the unexpected surge in demand for AI servers and enterprise-grade SSDs. As large-scale capacity release is not expected until 2028, the supply-demand gap will drive DRAM prices significantly higher. Nomura has raised its earnings forecasts for Samsung and SK Hynix, believing that the profitability of general storage has reached or even surpassed that of HBM.

NVIDIA's Jim Fan: The robotics field is still in chaos, and even the development direction may be wrong. Jim Fan stated that the reliability of robotic hardware has become the biggest obstacle to software iteration, and the lack of industry standards has led to a chaotic evaluation system. The current mainstream visual-language-action model (VLA) technology route "feels wrong," as its pre-training method based on visual language models (VLM) fundamentally misaligns with the actual needs of robotics. He mentioned that he is betting on video world models as an alternative solution.

Is it paving the way for "Interstellar Gate"? SoftBank plans to acquire DigitalBridge, locking in trillion-level data center assets. SoftBank is in deep negotiations to acquire the private equity firm DigitalBridge, with no final agreement reached yet. Following this news, DigitalBridge's stock price surged 45% in pre-market trading. If the acquisition is successful, SoftBank will directly control over $100 billion in data center assets. This move is seen as a key strategic initiative for SoftBank to advance the "Interstellar Gate" AI computing power project and strengthen its data infrastructure layout.

After repeated delays of Cybertruck, Tesla drastically cuts high-nickel battery material orders, with South Korea's L&F supply contract shrinking by 99%. Due to the delay of the Cybertruck project and adjustments in Tesla's production strategy, the contract for high-nickel cathode materials signed with supplier South Korea's L&F has been reduced from 3.83 trillion won to only 973 million won, a decrease of about 99%. This material was originally planned for the Cybertruck battery, but delays in the model and shifts in consumer preferences have led to a sharp decline in actual demand. Additionally, policy changes such as the Inflation Reduction Act have also impacted Tesla's procurement plans.

The rise of Indonesia's "Nickel King" Arif: In less than a decade, from a small trader to controlling one-third of the country's nickel mine trade. He is the most secretive power holder in the world's largest nickel-producing country, holding 71,000 hectares of mining rights and controlling one-third of Indonesia's nickel ore trade Annual trading volume exceeds 3 billion USD. Ali Fu has risen from a regular trader at Glencore to an industry giant over the past decade. However, with Indonesia's new president Prabowo initiating a restructuring of the mining industry and power dynamics, this "invisible nickel king" is facing severe challenges brought about by policy shifts.

Today's News Preview

Shanghai Futures Exchange: Starting from the market close on December 30, the price fluctuation limits for gold and silver futures contracts will be adjusted to 15%, along with adjustments to the margin ratio.

The Federal Reserve will release the minutes of its monetary policy meeting.

U.S. housing prices in 20 major cities for October.

Wuyi Vision and Lin Qingxuan are expected to be listed on the Hong Kong Stock Exchange on December 30