January -- The day of upcoming harvest

Federal Reserve internal disagreements intensify, US stocks continue to be under pressure, and the outlook for the federal funds rate faces new uncertainties **Market Overview: US stocks decline for three days, the dollar rebounds, and government bond yields fluctuate** Wednesday’s market performance shows a clear divergence. The three major US indices all declined: Dow Jones down 0.2%, S&P 500 fell for the third consecutive day with a decline of 0.14%, and Nasdaq dropped 0.24%. The China Golden Dragon Index also came under pressure, down 0.27%. In contrast, European markets generally rose: UK FTSE 100 up 0.75%, France CAC 40 up 0.69%, Germany DAX 30 up 0.57%. The US 10-year Treasury yield saw a slight increase, currently around 4.12%, up 1 basis point from the previous trading day. The US dollar index regained upward momentum, closing at 98.21, up 0.21%. USD/JPY appreciated by 0.24%, while EUR/USD declined by 0.21%. Gold prices rose initially but then softened, currently at $4,338.3 per ounce, up 0.14%. Silver performed relatively strongly, rebounding 5.67%. WTI crude oil increased 0.21% to $57.9 per barrel. In cryptocurrencies, Bitcoin is at $91,260, up 1.40% in 24 hours; Ethereum is at $3,140, up 1.18% in 24 hours. **Federal Reserve policy outlook becomes a focus: officials hold differing views on future rate path** The Fed released the minutes of the December FOMC meeting, revealing significant internal disagreements over monetary policy direction. The FOMC ultimately approved a 25 basis point rate cut with a 9-3 vote, the most dissenting votes since 2019. The minutes show most officials believe that if inflation gradually declines as expected, further rate cuts may be appropriate. However, some officials explicitly stated that rates should remain unchanged for a period after the mid-December meeting. White House representative Milan argued for a larger cut of 50 basis points, while Kansas City Fed President Scheidler and Chicago Fed President Goolsbee opposed. Overall, officials expect the economy to maintain a "moderate" growth pace but expressed concerns about downside risks to the labor market and upside risks to inflation. Fed staff forecast that, compared to the October projections, real GDP growth will slightly accelerate by 2028, mainly due to improved financial market conditions and increased potential output growth expectations. Staff inflation forecasts for 2025 and 2026 are slightly lower than October’s, but projections for 2027 and 2028 remain unchanged. Due to increased policy uncertainty, the MOVE volatility index surged 8.05%, reflecting heightened market concerns about the outlook for the federal funds rate. **Mixed performance in tech stocks: Meta acquires AI startup, tech giants diverge** Top tech stocks showed mixed results. Meta announced the acquisition of Chinese AI startup Manus, reportedly for several billion dollars, making it Meta’s third-largest acquisition to date. Meta stated that it will integrate Manus’s AI agent technology into Meta AI and commercial products to serve billions of users and millions of businesses. Driven by this positive news, Meta’s stock rose 1.1% at close. Alphabet rose 0.1%, Microsoft gained 0.08%, and Amazon increased 0.2%, showing relatively stable performance. However, Nvidia declined 0.36%, and Apple fell 0.25%, indicating divergence among leading tech stocks. **Global tech supply chain developments: US-Korea chip export restrictions show signs of easing** Reports indicate that the US has approved South Korean companies Samsung Electronics and SK Hynix to export US-made chip manufacturing equipment to China in 2026. This decision marks a temporary easing of restrictions on South Korean tech firms after earlier exemptions were revoked earlier this year. Samsung, SK Hynix, and TSMC previously benefited from the US “End-Use Verification” (VEU) exemption, allowing direct import of controlled semiconductor manufacturing equipment. However, in August, the US Department of Commerce revoked the exemption for Samsung and SK Hynix’s Chinese factories, with the measures taking effect in December. Under the new policy, shipments of US chip manufacturing equipment to Chinese factories require separate export licenses. This easing may reflect a new US consideration for industry supply chain stability. **Overseas major events: Ukraine security framework negotiations advance, SoftBank completes OpenAI investment** Ukrainian President Zelensky announced that Kyiv is discussing with the US and European “Volunteer Alliance” countries the possibility of deploying US peacekeeping troops under a security guarantee framework, with the final decision resting with the US. Zelensky expressed that Kyiv welcomes the US’s deployment of peacekeepers. Ukrainian negotiator Umerov has reached consensus with the “Volunteer Alliance” countries, and a national security consultation will be held in Ukraine this Saturday. Next Tuesday, a leader-level meeting will be held in France. French President Macron plans to host a “Volunteer Alliance” summit in early next month in Paris, where participating countries are expected to confirm specific commitments to Ukraine’s security framework. In the tech investment sector, CNBC reports that SoftBank has completed a $40 billion investment commitment to OpenAI. Last week, SoftBank transferred between $22 billion and $22.5 billion to finalize the investment, increasing its stake in OpenAI to over 10%. **Economic risk warning: Top economists warn of credit bubble risks** Top economist Henrik Zeberg recently issued a warning that the global financial markets are approaching a dangerous late-stage blow-off phase. Zeberg pointed out that despite ongoing economic weakening, stocks and other risk assets have reached extreme levels that are difficult to sustain. Zeberg describes the current rally as the final chapter of a credit-driven bull market, emphasizing that this rally is increasingly detached from fundamentals—economic growth slowing while stock prices continue to rise. Historically, such divergence often signals a sharp reversal. The market widely believes central banks will continue to intervene, but Zeberg sees this as a major risk. He warns that a significant portion of apparent wealth is built on credit foundations, making a reversal highly likely. As the business cycle reasserts itself, he expects the long-term consequences of prolonged monetary easing to suddenly surface, exposing market fragility and setting the stage for a severe correction—potentially marking the end of the post-2008 monetary era. **Key Data Summary** | Category | Indicator | Value | Change | |----------|------------|--------|--------| | **US Stocks** | Dow Jones Industrial | — | -0.2% | | | S&P 500 | — | -0.14% | | | Nasdaq | — | -0.24% | | **Fixed Income** | 10-year US Treasury yield | 4.12% | +1bp | | **Forex** | US Dollar Index | 98.21 | +0.21% | | **Commodities** | Gold | 4,338.3 USD/oz | +0.14% | | | WTI Crude Oil | 57.9 USD/barrel | +0.21% | | **Crypto** | Bitcoin | 91,260 USD | +1.40% | | | Ethereum | 3,140 USD | +1.18% | **Summary** Internal disagreements within the Federal Reserve have heightened market uncertainty regarding future rate policies, pushing up the volatility index and putting US stocks under pressure. Meanwhile, the dollar has regained strength, and government bond yields have slightly risen. In the global tech sector, Meta’s acquisition of Manus advances its AI strategy, SoftBank’s substantial investment in OpenAI is completed, and chip export policies show signs of adjustment. However, economists warn of credit bubble risks, suggesting current prosperity may rest on fragile foundations. Investors should closely monitor the Fed’s policy outlook, bond yield trends, and market liquidity changes.