Macro Matters

The U.S. November CPI was on target with what was expected

The annual inflation rate in the US rose for a 2nd consecutive month to 2.7% in November 2024 from 2.6% in October, in line with expectations. The rise is partly influenced by low base effects from last year. Energy costs declined less (-3.2% vs -4.9% in October), mainly due to gasoline (-8.1% vs -12.2%) and fuel oil (-19.5% vs -20.8%) while natural gas prices rose 1.8%, compared to 2%. Also, inflation accelerated for food (2.4% vs 2.1%) and prices fell much less for new vehicles (-0.7% vs -1.3%). On the other hand, inflation slowed for shelter (4.7% vs 4.9%) and transportation (7.1% vs 8.2%) and prices continued to decline for used cars and trucks (-3.4%, the same as in October). On a monthly basis, the CPI rose by 0.3%, the most since April, slightly above October's 0.2%, and also matching forecasts. The index for shelter rose 0.3%, accounting for nearly 40% of increase. The core CPI rose 3.3% on the year and 0.3% on the month, the same as in October and in line with forecasts.

The U.S. November PPI exceeded forecasts

Producer prices in the US increased 3% year-on-year in November 2024, the biggest rise since February 2023, compared to an upwardly revised 2.6% gain in October and above forecasts of 2.6%. Producer Prices Change in the United States averaged 3.07 percent from 1950 until 2024, reaching an all-time high of 19.57 percent in November of 1974 and a record low of -6.86 percent in July of 2009.

The Chinese government announced a more proactive fiscal policy and a "moderately loose" monetary policy.

The meeting proposed an even more proactive fiscal policy than the moderately enhanced proactive fiscal policy put forward at the 2023 Politburo meeting, indicating a higher stance and greater intensity. This suggests that, based on the introduction of "incremental fiscal policies," there is considerable room for anticipation regarding the intensity of fiscal policy in 2025, particularly in terms of the scale and ratio of the deficit.

The monetary policy statement is the most straightforward. Following the 2008 financial tsunami, the Political Bureau of the CPC Central Committee announced the promotion of a "moderately loose" monetary policy, which was then changed to prudent in 2010. Now, after a 14-year interval, the policy has shifted back to a moderately loose monetary policy.

Smart Money Flow

U.S. Equity ETFs saw an inflow of $149 Billion in November, the largest monthly inflow in history.

The S&P 500 has made new highs in December, but every day of the month so far has seen more stocks down than up.

China bought the dip in gold for the first time since April， China increased its Gold Reserves.

Top Corporate News

Google has launched the Willow quantum chip, sparking a surge in quantum computing stocks!

On Wednesday, Alphabet shares (GOOGL) closed up 5.46%, with the stock price rising to $196.71. The company has unveiled its latest quantum computing chip, Willow, which is causing a significant stir in the global tech community. According to Google, this tiny chip can perform calculations that would take supercomputers billions of years to complete in just five minutes! An increasing number of tech giants are joining in the commercialization of quantum computing chips, vying for future market share in areas such as artificial intelligence, drug development, energy, and the acceleration of Bitcoin mining. IonQ predicts that the quantum computing market will grow to $65 billion by 2030 and soar to $850 billion by 2040. However, the market remains volatile because many quantum computing applications are still in the developmental stage. Given the emerging nature of this technology and the market's unpredictability, investing in quantum computing stocks involves inherent risks.

Tesla Stock Hits Record High, Affordable Model Expected in 2025, Analysts Raise Targets

On Wednesday, Tesla's stock price soared to a three-year high, closing at $424.77. Prior to this, Chief Investor Relations Officer Travis Axelrod announced plans to launch an affordable model, the Model Q, next year. It is expected that after subsidies, the price will be below $30,000. The overseas price is estimated to be around $25,000, and the models produced at the Shanghai factory may be priced at approximately 140,000 yuan, which is nearly 40% lower than the current starting price of China's "entry-level" Model 3, which is 231,900 yuan. Several major banks have also raised their target prices for Tesla.

Morgan Stanley analyst Adam Jonas recently raised Tesla's price target from $310 to $400, calling it a "top pick." According to Jonas, this adjustment reflects excitement about Tesla's role in emerging industries like artificial intelligence (AI), renewable energy, robotics, and on-shoring production. These sectors are key drivers for the company's growth in a world increasingly focused on green energy and advanced technology.

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