Breakfast | Quantum computing concept stocks rebound significantly! NVIDIA experiences five consecutive declines, with a total drop of 12%

Overnight Market Overview

U.S. stocks experienced a "roller coaster" market, with PPI data initially driving a surge in early trading, followed by a decline before noon, and then several fluctuations. Panic buying before the close pushed small-cap stocks to lead gains, while large tech stocks performed weakly, with NVIDIA falling for five consecutive days, accumulating a decline of 12%. Investors shifted towards sectors such as utilities, finance, and materials, with regional bank ETFs and banking ETFs both rising over 3%.

The "Tech Seven Sisters" all fell. Meta dropped 2.31%, Tesla fell 1.72%, Alphabet A declined 0.71%, Apple decreased 0.48%, Microsoft fell 0.36%, and Amazon dropped 0.32%.

The quantum computing "meme stocks" that plunged on Monday rebounded significantly. D-Wave Quantum rose 23.5%, Rigetti Computing increased 47.93%, Quantum Computing gained 13.96%, Quantum Corporation rose 7.22%, IonQ increased 5.92%, Kingsoft Cloud ADR rose 3.93%, and the Quantum ETF - Defiance ETFs increased by 1.98%.

Eli Lilly fell 6.6%, marking its worst single-day performance since March 2021, due to lower-than-expected demand for weight loss drugs and insufficient inventory levels by year-end. Q4 revenue forecasts fell short of market expectations, dragging down weight loss stocks, with Novo Nordisk down 4% and Viking Therapeutics down nearly 13%.

Key Focus Today

Tonight's release of the U.S. CPI has become the market's focal point, with expectations for a year-on-year increase of 2.9%, higher than November's 2.7%, and a month-on-month increase of 0.3%. Analysts state that if the CPI data exceeds expectations, it will undoubtedly be unfavorable for U.S. stocks, as it indicates that the Federal Reserve will indeed delay interest rate cuts.

However, some analysts believe that the market is unlikely to reprice solely based on tomorrow's CPI report, as everyone will be focused on Trump and the new administration. President-elect Trump will return to the White House on January 20 and has vowed to impose trade tariffs. Analysts expect this will trigger a trade war and reignite inflation.

SEC Sues Musk: Failed to Disclose Twitter Stock Purchase as Required, Saved $150 Million

The U.S. Securities and Exchange Commission (SEC) filed a lawsuit in federal court in Washington, D.C. on Tuesday, accusing Musk of violating securities regulations.

The SEC stated that Musk purchased over 9% of Twitter's common stock in March 2022 but failed to disclose the information in a timely manner, violating federal securities laws. It was not until 11 days later, on April 4, 2022, that Musk publicly disclosed his beneficial ownership in a report submitted to the SEC.

This delay allowed Musk to continue purchasing Twitter shares at artificially depressed prices, saving at least $150 million. On April 4, 2022, Twitter's stock price rose more than 27% compared to the previous day's closing price.

Musk's lawyer responded that Musk did nothing wrong, calling the lawsuit "a farce."

Tianfeng Securities Guo Mingqi: Beware of Short-term Risks from NVIDIA

Guo Mingqi stated that the shipment volume of GB200 NVL72 may be significantly lower than expected, currently estimated at about 25,000–35,000 units. More seriously, repeated delays have led to insufficient market confidence, with stock prices reacting positively in advance but lacking market confidence, making related market rumors easily exaggerated or over-interpreted.

Demand for Weight Loss Drugs Drags Eli Lilly's Q4 Performance Below Expectations, Lowers Full-Year 2024 Revenue Guidance, Stock Price Drops Nearly 9%

Eli Lilly's earnings report shows that Q4 revenue forecast fell short of expectations. The company explained that the demand for weight loss drugs grew less than expected, and insufficient inventory levels at the end of the year affected performance. This marks the second consecutive quarter where sales did not meet targets due to forecasting errors. However, Eli Lilly is optimistic about achieving revenue of $58 billion to $61 billion in 2025, exceeding market expectations. Analysts say the market has extremely high growth expectations for the company, leaving little room for error.

Reports Indicate Meta Plans to Lay Off 5%

An internal memo from Meta shows that the company plans to eliminate about 5% of its workforce through performance evaluations, affecting approximately 3,600 positions, and will fill vacant positions within this year. CEO Mark Zuckerberg stated that performance management standards will be raised, the pace of layoffs will be accelerated, and a broader range of layoffs will be implemented in this round of evaluations, with "generous severance packages" offered to departing employees.

Fannie Mae Soars 29% Intraday, Achieves Largest Increase Since 2008

On Tuesday, Fannie Mae's stock rose over 30% intraday, with both Fannie Mae and Freddie Mac seeing increases of over 60% and 50% respectively in the last five trading days. This surge for the two government-sponsored enterprises began after the U.S. government announced a "orderly" framework for exiting conservatorship, allowing both companies to potentially end the government conservatorship that has lasted since the 2008 financial crisis.

China's New Social Financing in December Reaches 2.86 Trillion Yuan, New RMB Loans at 990 Billion Yuan, M2-M1 Scissors Gap Narrows

The total social financing scale for the entire year of 2024 reached 32.26 trillion yuan, compared to the previous value of 29.4 trillion yuan, which is 3.32 trillion yuan less than the previous year. RMB loans increased by 18.09 trillion yuan for the year, compared to the previous value of 17.1 trillion yuan. By the end of December, M2 grew by 7.3% year-on-year, while M1 decreased by 1.4% year-on-year.

U.S. December PPI Growth Below Expectations

The U.S. December PPI unexpectedly cooled, with a month-on-month increase of 0.2%, while economists expected the growth rate to remain steady at November's 0.4%. The December PPI and core PPI increased by 3.3% and 3.5% year-on-year, respectively, both marking the highest growth rates since February 2023, and both exceeding their respective growth rates in November, but still falling short of economists' expected growth rates.

Wall Street Bets on Significant Market Volatility on U.S. CPI Release Day

Options traders are preparing for the busiest CPI release day for the S&P 500 index since March 2023. Citigroup stated that the S&P 500 index could rise by 1% or fall by 1% on the day the CPI data is released. This represents the largest implied volatility before the CPI data release since the collapse of Silicon Valley Bank in March 2023, which triggered a regional banking crisis in the U.S. Some major banks have adjusted their interest rate cut expectations, with Bank of America even stating that they now expect the Federal Reserve will not cut rates this year

A new round of strong winds ravages, fire intensity in Los Angeles escalates, rent skyrockets, and insurance losses expand to $30 billion

The fire situation in California remains severe, with Wells Fargo estimating insurance losses could reach as high as $30 billion, setting a new record in modern American history, far exceeding JP Morgan's prediction of $20 billion last week. Meanwhile, a new round of dry strong winds has swept through Los Angeles and surrounding areas in Southern California since Tuesday, potentially exacerbating the fire situation, with gusts reaching speeds of 97 kilometers per hour, putting approximately 2 million people at extreme fire risk. Additionally, post-disaster rent surges are adding to the burden on residents, with some property rents increasing by as much as 81%