This material is neither intended to be distributed to Mainland China investors nor to provide securities investment consultancy services within the territory of Mainland China. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. Equity Thematic Strategy Tariffs, Affordability and the Low-End Consumer With incremental news of trade de-escalation around Greenland, investor focus on tariffs will likely revert to the pending decision by th ...

分组1: Federal Reserve and Economic Outlook - The Federal Reserve is expected to hold interest rates steady this week, with no new projections anticipated [37][38] - There is significant interest in the press conference for insights on the Fed's future rate decisions and potential dissents among policymakers [40][41] - The current economic environment is described as being in a "plausible range of neutral," indicating a balanced approach to monetary policy [39] 分组2: Earnings Reports and Market Reactions - Major tech companies including Microsoft, Meta, Tesla, and Apple are set to report earnings this week, with a focus on AI impacts and spending plans [19][30][26] - Microsoft is expected to report a revenue of approximately $25.1 billion for Q4, with analysts looking for insights on Azure growth and capacity constraints [32][23] - Meta is anticipated to provide updates on its spending plans and the performance of its Reality Labs division, which has seen layoffs and a shift in focus [28][29] 分组3: Precious Metals Market - Gold prices have surged above $5,000 per ounce for the first time, indicating potential market concerns and geopolitical tensions [42][44] - The silver market is also experiencing significant movements, suggesting a shift in inflation expectations from disinflation to potential hyperinflation [45] - The decline of the dollar is contributing to the rise in precious metals, raising questions about future economic stability and purchasing power [46][48] 分组4: Impact of Winter Storm on Industries - A severe winter storm has affected 17 states, leading to widespread power outages and significant disruptions in travel, with approximately 823,000 people without power and over 10,000 flight cancellations [9][10] - Retailers like Home Depot and Lowe's are expected to see increased demand for supplies due to the storm, while delivery services like DoorDash have paused operations in affected areas [13][16] - The storm's impact on consumer behavior and supply chains may influence Q1 earnings for companies in the retail and utility sectors [14][11]

Core Viewpoint - The individual investor adopts a contrarian investment style, focusing on deep value opportunities, particularly in stocks that have recently experienced sell-offs due to non-recurrent events, while also considering insider buying as a positive signal [1] Investment Strategy - The investment portfolio is split approximately 50%-50% between shares and call options, indicating a balanced approach to risk and potential returns [1] - The investor's timeframe for holding positions typically ranges from 3 to 24 months, suggesting a medium-term investment horizon [1] - Fundamental analysis is employed to assess the health of companies, including their leverage and financial ratios compared to sector and industry averages [1] Stock Selection Criteria - The investor screens thousands of stocks, primarily in the US, looking for those that have undergone recent sell-offs, particularly when insiders are buying shares at lower prices [1] - Professional background checks are conducted on insiders who purchase shares post-sell-off, adding a layer of due diligence to the investment process [1] Technical Analysis - Technical analysis is utilized to optimize entry and exit points, with a focus on support and resistance levels on weekly charts, employing multicolor lines for clarity [1] - Trend lines are drawn in multicolor patterns, indicating a systematic approach to technical analysis [1]

而究其金融创新本质，车企集体加码长期低息政策，是对当前市场低迷态势的主动应对。乘联分会秘书 长崔东树日前表示，新能源车辆购置税免税政策年末到期本应催生抢购潮，但全国多数省市以旧换新补 贴资金池告罄，形成政策优惠的对冲效应；加之多地置换更新补贴政策密集调整，进一步强化了消费者 的观望情绪，使得2025年12月车市未能呈现传统"翘尾效应"。 乘联分会数据显示，2025年12月全国乘用车零售226.1万辆，同比下降14.0%。而2026年开年市场依旧疲 软，1月1至18日零售量仅67.9万辆，同比降幅扩大至28%，较上月同期下降37%。其中新能源车市场同 样承压，同期零售31.2万辆，同比下降16%，较上月同期大幅下滑52%。 不过，这一促销模式背后也暗藏多重行业隐忧。有车企人士指出，长期低息本质是车企通过贴息让利， 以25万级车型为例，七年低息政策的累计贴息成本可能达到3至6万元，对于利润微薄的中小车企而言， 相当于吞噬10%至15%的单车利润，且长期贷款模式会占用企业大量现金流，仅具备规模效应与直营体 系的头部品牌能够有效摊薄成本。而从市场影响来看，超长期分期可能透支未来消费需求，导致后续市 场出现阶段性回落， ...

Investment Rating - The report maintains a "Recommendation" rating for the automotive industry, indicating a positive outlook for the sector's fundamentals and an expectation that the industry index will outperform the benchmark index [8]. Core Insights - The transition to a subscription model for Tesla's Full Self-Driving (FSD) is seen as a significant shift, with the potential for increased penetration rates and confidence in the business model [2][4]. - The introduction of real-time mileage insurance discounts by Lemonade for FSD users highlights the recognized safety benefits of FSD compared to human drivers, which could further enhance the commercial viability of the FSD subscription model [3][4]. - The testing of Robotaxi without safety drivers in Austin marks a pivotal moment for the industry, with expectations for increased deployment throughout the year [5][6]. - The potential approval of FSD in Europe and China is viewed optimistically, with implications for broader market acceptance and growth in 2026 [7][12]. Summary by Sections Event 1: FSD Subscription Model - Tesla has shifted to a subscription-only model for FSD, with a current penetration rate of approximately 22% in the U.S. This is expected to rise significantly following the cancellation of the buyout option and the end of free trials [2]. - The anticipated price increase for FSD subscriptions reflects a shift in strategy, moving away from price reductions to enhance penetration [2]. Event 2: Insurance Model - Lemonade's new car insurance policy offers a 50% discount on premiums when FSD is activated, indicating a recognition of FSD's safety advantages [3][4]. - The average accident rate for FSD is reported to be significantly lower than the national average, further supporting the case for its adoption [4]. Event 3: Robotaxi Testing - The initial testing of Robotaxi without safety drivers is underway, although most vehicles still have safety drivers. This is seen as a starting point for future developments in autonomous driving [5][6]. Event 4: Regulatory Approvals - Optimism surrounds the potential approval of FSD in Europe, with a possibility of broader EU acceptance based on mutual recognition mechanisms [7][12]. - Caution is advised regarding the timeline for FSD approval in China, with the market currently showing limited sensitivity to this development [12].

Core Insights - In 2025, only two of the Magnificent 7 tech stocks, Alphabet and Nvidia, outperformed the S&P 500, while the other five (Amazon, Apple, Meta Platforms, Microsoft, and Tesla) lagged behind [1][2] - The Bloomberg Magnificent 7 Index rose by 25% in 2025, compared to a 16% increase for the S&P 500, primarily driven by the strong performance of Alphabet and Nvidia [2] - As of January 23, 2026, the CNBC Magnificent 7 Index is slightly down, contrasting with a 1% increase in the S&P 500, indicating potential ongoing challenges for the Magnificent 7 stocks [3] Performance Analysis - The majority of the Magnificent 7 stocks underperformed the S&P 500 for the first time since 2022, highlighting a shift in market dynamics [2] - Experts suggest that the sluggish performance may continue due to slowing profit growth and concerns regarding heavy investments in artificial intelligence [3] Investment Strategy - Investors are cautioned against viewing the Magnificent 7 as a single investment entity, as this approach may lead to concentrated risks rather than diversification [5] - Nvidia and Microsoft are identified as the best positioned for potential growth in 2026, contingent on sustained enterprise AI spending [6]

Macro Research - The report highlights a "double hit" moment for US dollar assets due to Trump's comments on Greenland and tariff threats, alongside the early dissolution of the Japanese House of Representatives leading to a sell-off in Japanese bonds [3][4][22] - The US dollar's credit breakdown is re-emerging, with significant impacts on US stocks, bonds, and currencies, resulting in a strong performance of safe-haven assets like gold and silver, while cryptocurrencies face pressure [3][4][22] Strategy Research - In Q4 2025, active funds significantly reduced their holdings in A-shares and Hong Kong stocks, with a focus on increasing allocations to cyclical and financial value stocks, while reducing exposure to technology and healthcare sectors [7][26] - The report indicates a clear rotation in fund styles, with a notable shift towards large-cap cyclical and financial stocks, while growth and consumer sectors saw reductions in allocations [26][27] Fixed Income Research - The appreciation of the RMB and increased foreign exchange settlements may tighten interbank liquidity, depending on whether the central bank will actively increase the supply of base currency [11][14] Industry Research: Photovoltaic Equipment - The report anticipates a new cycle for the photovoltaic equipment industry driven by SpaceX and Tesla's plans to deploy a combined 200GW of solar capacity, with key equipment manufacturers expected to benefit [15][16] - The demand for solar expansion is expected to rise due to the increasing need for low-orbit satellites and the commercialization of space computing, which will drive the demand for core equipment [15][16] Fund Allocation Insights - The report notes a significant increase in allocations to cyclical and financial sectors, particularly in upstream industries like metals and chemicals, driven by improved supply-demand dynamics and geopolitical tensions [27][28] - The technology sector shows a marked divergence, with communication equipment receiving substantial increases due to AI infrastructure investments, while many tech segments faced reductions [27][28]

Investment Rating - The report does not provide specific investment ratings for the industry sectors mentioned [2]. Core Insights - The overall industry strategy focuses on the simultaneous rise in energy storage volume and price, with ongoing themes in space and AI [3]. - The new energy vehicle supply chain is entering an upward cycle, benefiting companies like CATL and EVE Energy due to the electrification upgrade and optimization of energy storage patterns [3]. - By the end of December 2025, China's electric vehicle charging infrastructure is expected to reach 20.092 million units, a year-on-year increase of 49.7% [3]. - Global energy storage battery shipments are projected to reach 640 GWh in 2025, a year-on-year increase of 82.9%, with CATL maintaining a leading position [3][25]. - The solid-state battery sector is entering a critical phase of engineering and industrialization, with companies like Xiamen Tungsten and Peking University Technology benefiting [4]. Summary by Sections Energy Storage and New Energy - The energy storage trend continues to improve, with companies like Sungrow Power and Huaneng Power benefiting from a significant increase in domestic procurement, which exceeded 100 GWh for the first time [5]. - The average price of lithium battery storage systems has rebounded by 6.39% to 0.5226 yuan/Wh [5]. - AI expansion and global grid upgrades are driving demand for power equipment, benefiting companies like TBEA and Sanyuan Electric [5]. Lithium Carbonate and Battery Materials - The supply and demand for lithium carbonate are exceeding expectations, with companies like Salt Lake Potash and Hunan Youneng benefiting from favorable market conditions [4]. - The cost of phosphoric iron lithium cathode materials has increased, with processing fees rising by 318.7 yuan/ton compared to November averages [4][27]. AI and Robotics in New Energy - The integration of AI and humanoid robots in the new energy sector is gaining traction, with companies like Zhejiang Rongtai and Keda Li benefiting from advancements in robotics [7]. - Tesla's shift towards becoming a robotics company is expected to create new growth cycles, with significant implications for the automotive industry [7][26]. Market Trends and Projections - The report highlights that the global energy storage battery shipment is expected to reach 1,090 GWh in 2026, a year-on-year increase of 70% [25]. - The market for commercial energy storage products is evolving, with larger capacity batteries becoming mainstream and driving innovation in the sector [29].

Core Insights - Lemonade has announced a new insurance policy for self-driving cars, starting with Tesla's Full Self-Driving (FSD) system, leading to a significant stock market reaction with LMND shares increasing by 9% on January 21 and 13% on January 22 [1] - The company promises to reduce per-mile insurance rates by approximately 50% with FSD enabled, based on data showing a substantial decrease in accident rates when FSD is engaged [2] - Lemonade expects its insurance premiums to continue decreasing as Tesla enhances its FSD software, betting that improved autonomy will lead to lower risk assessments for policyholders [2] Company Overview - Lemonade is a tech-enabled insurance company that offers various insurance products, including auto insurance, and utilizes AI, automation, and behavioral economics to differentiate itself from traditional insurers [4] - The company has a market capitalization of around $7 billion and is based in New York [4] - LMND stock has risen by 181% over the past year, trading around $93 per share, close to its high of $99.90, significantly outperforming the S&P 500 Index [5] Valuation Insights - Despite the impressive stock performance, Lemonade remains unprofitable, trading at 10.35 times sales and over 13 times book value, which are valuations that exceed those of traditional insurance companies [6] - The unique business model of Lemonade, powered by AI underwriting and a rising loss ratio, presents a different case compared to conventional insurers [6]

Core Viewpoint - Tesla's admission of a slow rollout for Cybercab and Optimus presents a significant opportunity for competitors like Waymo, which is already operational in multiple cities, potentially leading to a market share transfer [1][13] Group 1: Competitors' Positioning - Waymo, owned by Alphabet, is currently operating robotaxis in San Francisco, Phoenix, Los Angeles, and Austin, leveraging lidar technology and established regulatory relationships [2][3] - Uber partners with Waymo to offer autonomous rides through its platform, maintaining marketplace dominance without the technology risk [6][10] - Lyft is pursuing a similar partnership strategy but lacks the scale of Uber, making it more vulnerable in the competitive landscape [7][12] - General Motors' Cruise is attempting a relaunch after a safety incident in 2023, but faces public skepticism and must prove its operational safety [8][12] Group 2: Market Dynamics - Waymo's first-mover advantage allows it to generate revenue from paying customers, creating a data moat that enhances its algorithm with every mile driven [5][11] - Uber's model allows it to benefit from the autonomous vehicle trend without taking on technology development risks, relying on its existing human driver network for profitability [10][12] - Lyft's position is weaker due to its smaller scale and reliance on human drivers, which may prolong its viability but limits growth potential [7][12] Group 3: Financial Implications - Alphabet's financial strength provides Waymo with the ability to absorb losses while scaling its technology, although this value is not currently reflected in Alphabet's stock price [9][11] - Uber's market capitalization stands at $172 billion, trading at 21 times forward earnings, with strong free cash flow from its core ride-sharing business [10] - The delay in Tesla's autonomous rollout creates opportunities for Waymo and Uber to solidify their positions in the market [13]