Market Overview

The new U.S. Treasury Secretary is confirmed, and the situation in the Middle East has eased. Capital continues to flow out of technology stocks and rotate into cyclical stocks. The Dow and small-cap stocks hit new highs, with the Dow rising by more than 400 points, the Russell Small-Cap Index once surging by 2.5%, the S&P 500 narrowing its gains after hitting an intraday high, and the Nasdaq Composite rising by 1%, then fluctuated and eventually closed slightly higher. Nvidia fell by more than 4% to a three-week low.

Chinese concept stocks rose slightly, with NIO falling by 3.5% and Alibaba rising by about 3%.

The nomination of the new U.S. Treasury Secretary has calmed the market, with U.S. Treasury yields plunging by double digits, the dollar falling by 1% at one point, detaching from a two-year high, gold falling by more than 3%, ending a five-day rally, and Bitcoin profit-taking, breaking below $94,000.

With the easing of the situation in the Middle East, oil prices plummeted by about 3%.

In the Asian session, the three major A-share indexes closed lower, with small-cap and dividend leaders rising, the Wind Micro-Cap Index rose by 3%, Treasury futures rose collectively, and the container shipping index hit the daily limit down.

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Key News

A U.S. judge said he would dismiss charges against those suspected of interfering in the 2020 election. The team is preparing a large-scale energy plan to promote natural gas exports and oil drilling, which will be launched on the first day of office.

The "U.S. nominated Treasury Secretary" made his first statement: The policy focus will be to fulfill the promise of tax cuts, to focus on advancing tariff policies and reducing spending, while "maintaining the status of the dollar as the global reserve currency."

It was revealed that a company under the future U.S. Commerce Secretary holds shares in Tether and is promoting a Bitcoin loan project.

Bank of America: AI trading has changed, and Nvidia is no longer the focus. Reports say Amazon is deploying 100,000 second-generation self-developed chips, challenging industry monopolies, and targeting Nvidia.

California's electric vehicle purchase subsidy plan excludes Tesla.

MSTR CEO talks about being shorted: Citron doesn't understand where MSTR's premium over Bitcoin comes from. Failing to break through $100,000, Bitcoin fell below $94,000, and MSTR was highly praised by two Wall Street institutions.

Israeli media reported that the Israeli Security Cabinet will hold a meeting to approve a ceasefire agreement with Hezbollah, and gold and oil plummeted.

Market Close

U.S. stocks: The Dow Jones Industrial Average rose by 0.99%, the S&P 500 Index rose by 0.3%, and the Nasdaq Composite rose by 0.27%.

European stocks: The EURO STOXX 600 Index closed up by 0.06%. The German DAX 30 Index closed up by 0.43%. The French CAC 40 Index closed up by 0.03%. The UK FTSE 100 Index closed up by 0.36%.

A-shares: The Shanghai Composite Index fell by 0.1%, the Shenzhen Component Index fell by 0.17%, and the ChiNext Index fell by 0.02%.

Bond market: The U.S. 10-year benchmark Treasury yield fell by 13.09 basis points, reporting 4.2692%. The two-year U.S. Treasury yield fell by 10.66 basis points, hitting a daily low of 4.2664%.

Commodities: WTI January crude oil futures fell by $2.30, a decrease of 3.23%, reporting $68.94 per barrel. Brent January crude oil futures fell by $2.16, a decrease of 2.87%, reporting $73.01 per barrel. COMEX gold futures fell by 3.13%, reporting $2,627.40 per ounce. COMEX silver futures fell by 3.09%, reporting $30.370 per ounce. London zinc closed up by more than 1.8%, and London nickel and aluminum also rose by at least 1.1%.

Key News Details

Global Highlights

The team is preparing a large-scale energy plan to promote natural gas exports and oil drilling, which will be launched on the first day of office! The energy plan includes approving new liquefied natural gas project export licenses, accelerating oil drilling on the U.S. coast and federal lands, and repealing a series of climate legislation and environmental protection regulations implemented by the former president.

The "U.S. nominated Treasury Secretary" made his first statement: The policy focus will be to fulfill the promise of tax cuts, to focus on advancing tariff policies and reducing spending, while "maintaining the status of the dollar as the global reserve currency."

Bessent was nominated for Treasury Secretary, the dollar fell, U.S. Treasury bonds rose, and Bitcoin fell. Analysts believe that Bessent will usher in the "Mnuchin 2.0" era. Mnuchin couldn't stop all tariff policies, but he knew where the red line was and ensured the smooth operation of the U.S. Treasury market. The market expects that the new government's fiscal policy will take a gradual approach, implementing tariff policies in stages, rather than being as aggressive as promised.

It was revealed that a company under the future U.S. Commerce Secretary holds shares in Tether and is promoting a Bitcoin loan project. Cantor, the financial services company founded and served as CEO by Lutnick, reached an agreement last year to hold 5% of Tether's shares, valued at up to $600 million at the time; Tether is facing an investigation by the U.S. Department of Justice for violating sanctions and money laundering regulations, and its boss said that Lutnick will try to use his political influence to resolve the threats faced by Tether; Cantor is also considering accepting Tether's support for an initial $2 billion Bitcoin mortgage loan project.

Bank of America: AI trading has changed, and Nvidia is no longer the focus. Bank of America believes that the market focus has entered the second phase of AI beneficiary trading—software stocks and Agentic AI. As the software "AI moment" arrives, its monetization is expected to start in 2025 and become meaningful in 2026 as enterprise adoption accelerates.

Reports say Amazon is deploying 100,000 second-generation self-developed chips, challenging industry monopolies, and targeting Nvidia! Currently, Amazon's Trainium2 chips have begun to be deployed in data centers and are expected to be fully promoted in several core data centers, including Ohio, soon. Compared to the previous generation, its performance has increased by four times, memory capacity has increased by three times, and it has significant advantages in energy efficiency and cost.

California's electric vehicle purchase subsidy plan excludes Tesla. California plans that if the federal government's subsidies are canceled next year, California will provide state subsidies for local electric vehicle buyers, but the subsidies will exclude Tesla's popular electric vehicle models, creating market conditions for more car manufacturers to take root.

MSTR CEO talks about being shorted: Citron doesn't understand where MSTR's premium over Bitcoin comes from. Michael Saylor said that while the company makes money through volatile trading, it also leverages through ATM operations. Therefore, as long as Bitcoin is still rising, the company can still make money, which is an important profit point that short sellers ignore. "According to an 80% Bitcoin price difference, $3 billion in ATM financing can bring $12.50 per share in earnings over 10 years."

Failing to break through $100,000, Bitcoin fell below $94,000, and MSTR was highly praised by two Wall Street institutions. The sentiment of profit-taking in Bitcoin is strong, continuing the decline over the weekend. In terms of news, Bessent was nominated for U.S. Treasury Secretary, and investors expect that he will prioritize economic and market stability, which has led to the dollar and Bitcoin falling, and U.S. Treasury bonds rising. There is also good news in the currency circle on the same day: Wall Street is preparing to launch a new generation of cryptocurrency-related ETFs to cater to the tastes of various investors. In addition, "Bitcoin's big holder" MSTR was significantly raised by Bernstein and others in target prices, MSTR opened high but eventually closed down by more than 4%.

Overseas Macro

Reenacting 2021, Bitcoin leads the surge in risky assets, and what the U.S. stock market fears is "replicating the 2022 crash next year." Currently, the 10-year U.S. Treasury yield is about 4.43%, much higher than 1.5% in December 2021. Analysts believe that the current higher borrowing costs have increased market risks. If corporate earnings fail to meet expectations or fail to fulfill the commitment to create a national Bitcoin reserve, the stock market and Bitcoin may fall into trouble.

"Buying out" the most cryptocurrency-supporting U.S. Congress in history, how did the currency circle do it? By investing more than $245 million, supporting nearly 300 cryptocurrency supporters to take office in both the Senate and the House of Representatives, and weakening the opposition, cryptocurrencies are quietly expanding their political influence in the coming years.

"2.0" has three scenarios for the U.S. stock market, the dollar, and gold. Bank of America Merrill Lynch believes that in the best-case scenario, U.S. GDP growth exceeds 3%, the dollar is slightly strong, and gold prices are low; in the poor scenario, aggressive tariff policies will impact global trade and increase the risk of a U.S. recession, leading to a significant drop in the U.S. stock market; in the tail risk scenario, the U.S. economy falls into stagflation, the dollar weakens across the board, and gold and cryptocurrencies benefit.

Japan once again proposes a large-scale stimulus plan, raising the income tax threshold, and the market increasingly believes in a rate hike in December. Japan's personal income tax threshold will be significantly increased from the existing $6,640 to $11,500. Analysts believe that this move will inject more disposable income into the Japanese economy, alleviating long-term pressures such as population decline and aging. However, opponents argue that this is a reckless fiscal expansion, which may lead to increased income inequality and may trigger rapid inflation growth, or open the door for a rate hike in December.

Goldman Sachs' major outlook for Japan in 2025: Inflation crosses a key threshold, and the next bull market for Japanese stocks relies on earnings! Goldman Sachs believes that a benign "wage-price spiral" has emerged, and sustainable inflation will support the Bank of Japan in making two 25 basis point rate hikes next year. Next year, Japan's real GDP growth is expected to reach 1.2%, with consumption, exports, and capital expenditure all expected to maintain an expansionary trend. For Japanese stocks, Goldman Sachs expects that under the drive of corporate profit growth, the Topix index still has a 14% upside in the next year,It is expected to reach 3100 points.

UBS: To avoid off-season pressure, OPEC+ is highly likely to announce the extension of the production reduction plan until the end of March next year. UBS predicts that OPEC+ may cancel the production cut in the middle of 2027, when the supply growth of non-OPEC+ (such as the United States and Latin America) may slow down, and the Brent oil price in 2025 is expected to fluctuate around $75. In addition, OPEC+ changed the oil policy meeting on December 1 to an online meeting, which is the organization's third consecutive adjustment to the meeting format.

Overseas Companies

AI Agent welcomes another giant, Google makes a big effort in AI Agent, and the commercial explosion is imminent! Google Cloud will provide a one-stop commercial ecosystem from the development, deployment to the application of AI Agents, and also released the AI Agent market, where users can quickly find the AI Agents they want, greatly simplifying the customer's selection and deployment process. New customers can get a $300 free credit to experience the selected products.

Andrew Ng's latest speech - Four major AI trends. Andrew Ng pointed out four major AI trends: accelerated generative workflows; large models optimized for tools, with the ability to perform operations; the importance of unstructured data engineering is increasing: the processing capabilities of text, image, and video data have become crucial; the image processing revolution is coming: the development of image processing technology will bring new application opportunities for more enterprises.

The government is said to finalize an $8 billion chip bill allocation with Intel. After questioning the subsidy method of the chip bill, the media said that the goal is to complete as much of the allocation agreement as possible; considering Intel's delay in related investments in the Ohio wafer factory, as well as its own technology roadmap and customer needs, the government plans to reduce the originally announced $8.5 billion allocation by $500 million.