Preview of US Stock Market | Three major stock index futures rise together, storage chip stocks generally rise before the market opens, and Nvidia significantly lowers copper demand for data centers.

Pre-market market trends 1. On January 16 (Friday), pre-market, the futures of the three major US stock indexes rose together. As of the time of publication, Dow Jones futures rose by 0.08%, S&P 500 index futures rose by 0.31%, and Nasdaq futures rose by 0.61%. 2. As of the time of publication, the Germany DAX index fell by 0.25%, the UK FTSE 100 index rose by 0.01%, the France CAC 40 index fell by 0.56%, and the Europe Stoxx 50 index fell by 0.32%. 3. As of the time of publication, WTI crude oil rose by 1.35% to $59.99 per barrel. Brent crude oil rose by 1.30% to $64.59 per barrel. Market News The hottest credit market since 2019 is surging! The debt frenzy of AI giants may trigger a stock and bond pullback storm. The global credit market, focusing on high-grade corporate bonds and high-yield corporate bonds (also known as junk bonds), is currently at its hottest state in the past 19 years. This has led to warnings from global asset management companies, including Aberdeen Investment and The Pacific Investment Management Company (Pimco), reminding investors not to underestimate the hot credit market and the recent record-breaking stock market - as the peak of the credit market often leads to sudden widening of credit spreads, resulting in a sharp drop in corporate bond prices and a correction in risk assets (stocks). This logic is a standard path for risk reassessment in the market framework, based on the reasonable concern about the historical relationship between the bond market and the stock market. The market is in a "hibernation" state! The volatility of the 10-year US Treasury yield hits a record low, and investors are anxious about the "breaking point" moment. The 10-year US Treasury yield is moving towards maintaining a slight fluctuation for the fifth consecutive week, approaching the longest "inertial period" in the past twenty years. Since 2006, the median weekly volatility range of the 10-year US Treasury yield has been 16 basis points. In the past five weeks, this range has been less than 10 basis points each time, marking the longest such period since 2020. This trend is mainly driven by the market's expectation of the stability of US monetary policy, but it is causing anxiety among bond market investors because the previous narrow fluctuations in yields often lead to sell-offs. Data center copper demand is likely to be reassessed! Copper prices drop below $13,000 as Goldman Sachs Group, Inc. warns of a potential 15% decline this year. As of the time of publication, LME copper futures prices fell by over 1% to $12,900 per ton. NVIDIA Corporation has reportedly revised its data center copper demand data in a technical paper, reducing the amount of copper busbars used per gigawatt from "500,000 tons" to 200 tons. The adjustment could lead to a downward revision in market expectations for future copper demand. Analysts at Goldman Sachs Group, Inc. anticipate further declines in the future and predict that by the end of 2026, LME copper prices will drop to $11,000 per ton, as the copper market's fundamentals have been deteriorating for months with global inventories continuing to rise, increased scrap copper supply, and underperforming demand. Goldman Sachs Group, Inc. stated: "We maintain that most of the copper price gains have already been realized, and the current price of copper is increasingly susceptible to a pullback driven by speculative fund inflows." "The emerging market guru" refuses to chase gold at higher prices: only considering buying if it drops by 20%. Mark Mobius, a senior investor known as "the emerging market guru," stated that gold has lost its appeal after a historic surge. He warned that most investors in the current market are still bullish on precious metals, but a possible rebound in the US dollar could suppress its price. Mobius said that he definitely would not buy gold at current prices, only considering allocating this asset when the price drops by 20% from the current level. He further pointed out that economic forecasts suggest a potential turnaround in the US economy, which could strengthen the US dollar from current levels, potentially weakening the attractiveness of precious metals. As silver continues to hit new highs, BMO sounds the alarm: the relative rise of silver may be excessive. Silver prices have been hitting historic highs recently, pushing the gold-silver ratio to 50, the lowest level since March 2012. Analysts at BMO Capital Markets warned that changes in supply and demand dynamics may mean that the current trend in the gold-silver ratio may not be sustainable. The bank stated in a research report: "While political uncertainties and demand as a 'meme investment' may further depress the gold-silver ratio in the short term, we predict that the oversupply of physical silver will gradually expand, which will drive the gold-silver ratio back up over the next few years, continuing the long-term trend since the 1970s." As of the time of publication, spot silver fell by nearly 2% to $90.73 per ounce. Stock News Industries with high prosperity prospects are expected to continue! Storage chip stocks rise in pre-market trading. As of the time of publication, on Friday, pre-market trading in the US, Micron Technology, Inc. (MU.US), SanDisk (SNDK.US) rose by over 5%, Seagate Technology Holdings PLC (STX.US), and Western Digital Corporation (WDC.US) rose by over 4%. Divya Mathur, a portfolio manager for emerging market stocks at ClearBridge Investments, stated that storage chip stocks and stocks of high-end storage products are the most attractive areas for global stock market investment. Analysts at Citigroup believe that driven by the popularization of AI intelligent agents and the surge in demand for AI CPU memory, storage chip prices will experience a runaway rise in 2026. Analysts at Nomura predict that the current "super cycle in the storage industry" that began in the second half of 2025 will continue until at least 2027. As of the time of publication, Micron Technology, Inc. rose by 6% in pre-market trading on Friday. Strong demand for AI + trade agreements drive Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) to increase investment in the US. The chip giant Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR is preparing to accelerate its expansion plans in Arizona. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR had previously pledged to invest $165 billion in the US to support the US government's efforts to rebuild the domestic chip manufacturing industry. However, executives at Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR hinted that with the company expanding its capacity to meet the demand for AI chips, the investment in the US would increase further. In its recent quarterly earnings report, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR stated that capital spending in 2026 is expected to significantly increase from $40.9 billion in 2025 to $52-56 billion. The company also stated that capital expenditure for the next three years would increase significantly. Meanwhile, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR plans to accelerate its expansion in Arizona just as the US and Taiwan signed a trade agreement. Under this agreement, tariffs on goods from Taiwan to the US will be reduced to 15%, and Taiwanese chip companies will invest at least $250 billion in the US to expand chip production. Merger and acquisition activities are expected to have a "harvest year"! JP Morgan's investment banking team is recruiting for the European market. Wall Street giant JPMorgan Chase is seeking to increase trade matching personnel in Europe, as the bank expects 2026 to be a "bumper year" for mergers and acquisitions. Filippo Gori, Joint Head of Global Banking at JPMorgan, said, "We are hiring in almost every country in Europe." Dorothy Blaise, Head of Global Investment Banking at the bank, said, "We have the funds ready to deploy, the question is just where is the most appropriate place to deploy them." The two executives stated that clients at meetings across Europe in the initial weeks of this year expressed optimism. These two executives expect this year to be one of the best years in history for mergers and acquisitions, driven by lower interest rates, stable credit conditions, and the backlog of delayed transactions. Streaming media arms race intensifies! Netflix (NFLX.US) splashes $7 billion to secure global rights for Sony Pictures. Netflix has obtained the global streaming rights for Sony Pictures films following their release in theaters and the pay-per-view window, bringing one of Hollywood's largest studios' releases under its banner. This new multi-year agreement expands on the partnership the two companies reached in 2021. Both companies stated that as the rights gradually become available in various regions, Sony films will start to be gradually released on the Netflix platform later this year and are expected to be fully deployed by early 2029. As part of the deal, Netflix will also have licensing rights to certain films and TV shows from Sony's library. Sources revealed that the deal is valued at around $7 billion and will be valid until 2032. Coterra Energy (CTRA.US) in talks to merge with Devon Energy Corporation (DVN.US), brewing a super merger in the oil and gas industry. Coterra Energy is reportedly exploring the possibility of merging with Devon Energy Corporation. If these two shale oil and gas explorers successfully join forces, it will be one of the largest oil and gas transactions in recent years. Both companies hold significant assets in the oil and gas-rich Permian Basin. Sources indicated that the two companies are still in negotiations over the potential deal terms and structure. It is currently uncertain whether an agreement will be reached, and the possibility of other bidders emerging in the future cannot be ruled out. This negotiation highlights that after a relatively quiet period for mergers and acquisitions in 2025, oil and gas industry giants are urgently driving the industry consolidation process. Important Economic Data and Events Announcement The day after at 00:00 Beijing time - Federal Reserve Governor Bowman speaks on the economic outlook and monetary policy. The day after at 04:30 Beijing time - Federal Reserve Vice Chairman Jefferson speaks.