Core Insights - February has shown increased volatility compared to January, with investors adopting a "sell first, ask questions later" strategy due to AI-driven disruption fears [1] - The U.S. Consumer Price Index (CPI) release provided some relief by easing inflation concerns, leading to expectations that the Federal Reserve may start cutting rates around mid-year [1] Inflation Data - Consumer inflation rose 2.4% year-over-year in January, down from 2.7% in December, returning to its April 2025 level [2] - Core CPI increased 2.5% annually, marking its lowest reading since April 2021, while economists had anticipated both headline and core inflation to be at 2.5% [2] Federal Reserve Rate Expectations - Following the softer-than-expected January inflation data, U.S. interest rate futures increased the probability of a June rate cut to approximately 70%, up from 64% prior to the report [4] - The CME FedWatch tool indicates a 50.7% likelihood of interest rates being lowered to 3.25-3.5% in June 2026, an increase from 44.5% a month earlier, with expectations for July strengthening to an 80.4% likelihood of a rate cut [5] Investment Opportunities in ETFs - Small-cap stocks, which are heavily reliant on external borrowings, could significantly benefit from lower interest rates, enhancing capital availability and allowing for refinancing of existing debt [7] - Suggested small-cap ETFs include iShares Core S&P Small-Cap ETF (IJR), iShares Russell 2000 ETF (IWM), and Vanguard Small Cap ETF (VB), all rated Zacks ETF Rank 2 (Buy) [8] - Financial ETFs are expected to gain from anticipated Fed interest rate cuts, which could lower capital costs for banks and boost loan activity [9] - Recommended financial ETFs include State Street Financial Select Sector SPDR ETF (XLF), Vanguard Financials ETF (VFH), and iShares U.S. Financials ETF (IYF), with XLF and VFH rated Zacks ETF Rank 1 (Strong Buy) [12] - The utilities sector, being capital-intensive, will also benefit from reduced financing costs, making utility ETFs like Utilities Select Sector SPDR Fund (XLU), Vanguard Utilities ETF (VPU), and iShares U.S. Utilities ETF (IDU) attractive options [13][14]

Market Overview - US futures showed modest positivity in early morning trading, with the Dow Jones futures up 0.1%, indicating potential further record territory [1] - S&P 500 futures also increased by 0.1%, while Nasdaq 100 futures rose by 0.2% [2] Previous Market Performance - The Dow achieved its third consecutive record close, finishing up 52 points or 0.1% at 50,188 [3] - In contrast, the S&P 500 fell by 0.3% to 6,942, the Nasdaq decreased by 0.6% to 23,102, and the Russell 2000 lost 0.4% to close at 2,679 [3] Economic Indicators - The market is awaiting the delayed January non-farm payrolls (NFP) report, expected to show an increase of 66,000 jobs, up from 50,000 in December [7] - The dollar index (DXY) was down 0.1% at 96.72, reflecting a softer dollar ahead of the jobs report [5] Commodity Prices - Crude oil prices strengthened, rising by 2.1% to $65.32 per barrel of West Texas Intermediate [6] - Precious metals such as gold, silver, and copper also saw price increases [6] Analyst Insights - Market analysts suggest that a weak jobs report could influence Federal Reserve policy, with a 40% chance of an interest rate cut in March or April being priced in by the markets [7] - There is a noted divergence between the strong GDP growth rate of 4.4% for Q3 and the weakness in the jobs market, indicating potential economic concerns [8] - A weak NFP report followed by weak inflation data could push the Fed closer to a rate cut [9]

Last week, XAUUSD settled at $4964.62, up $69.18 or +1.41%Technical Setup: Support TighteningThis week, the wide support zone comes in at $4744.34 to $4427.82, just like last week. However, the uptrend line from the $3886.46 main bottom, moving at a rate of $43.06 per week, comes in at $4532.39. This creates a relatively tight support cluster at $4532.39 to $4427.82. Relatively tight that is, given the current elevated volatility.Pattern, Price, and Time Still IntactMarkets follow three elements, in my opin ...

Market Overview - The A-share market experienced a collective decline, with the Shanghai Composite Index down by 0.64%, Shenzhen Component Index down by 1.44%, and ChiNext Index down by 1.55% [1] - The total trading volume across the three markets was 21,943 billion yuan, a decrease of 3,090 billion yuan compared to the previous day, with over 3,700 stocks declining [1] Sector Performance - "Old economy stocks" showed a strong recovery, with sectors such as banking, tourism, and medical beauty performing well, while "new economy stocks" faced significant declines, particularly in solar energy and AI hardware [1] - The beauty care, banking, and food and beverage sectors exhibited strong performance, while non-ferrous metals, power equipment, and communication sectors showed weakness [1] Investment Trends - Micro-cap stocks continued to lead the market, with large-cap stocks outperforming small-cap stocks, indicating a shift in market sentiment towards more stable investments [1] - The market is witnessing a rotation in investment style, with large-cap and value stocks beginning to replace small-cap and growth stocks, suggesting a comprehensive rebound [1] Traditional Sector Outlook - The traditional sectors are expected to maintain strength leading up to the Spring Festival, driven by increased risk aversion and a seasonal uptick in demand for products like liquor and tourism [5] - Historical trends indicate that funds often position themselves in traditional sectors ahead of the Spring Festival to capitalize on post-holiday demand [5] Long-term Investment Logic - The long-term investment logic for technology and cyclical sectors remains intact, with opportunities for low-cost entry still available [5] - The main themes for the A-share market in the coming year are expected to revolve around technology, including AI and robotics, and cyclical sectors such as non-ferrous metals and coal, benefiting from anticipated global economic recovery and domestic policy improvements [5]

Jeffrey Rosenberg, portfolio manager of the systematic multi-strategy fund at BlackRock, says the removal of the balance of risks from the Federal Reserve's labor market assessment is the biggest takeaway from Chair Jerome Powell's news conference after the central bank's decision to leave interest rates unchanged. ...

Summary of Aluminum Corporation of China (Chalco) 2026 Business Outlook Call Company Overview - **Company**: Aluminum Corporation of China (Chalco) - **Stock Code**: 2600.HK Key Industry Insights - **Alumina and Aluminum Prices**: - Alumina prices have been weak since Q4 2025 due to surplus supply and increased bauxite supply [2][4] - Aluminum prices have remained strong since Q4 2025, benefiting from China's capacity cap policy and rising demand [2][5] Core Business Strategies - **Focus on Aluminum Business**: - In 2026, Chalco will concentrate on its aluminum business, aiming for a 100% utilization ratio [3] - The output of metallurgical alumina is expected to align closely with aluminum consumption, with profitable sales of chemical alumina anticipated [3] - **Bauxite Production**: - Chalco plans to increase its bauxite output from Guinea year-over-year in 2026 [3] Financial Performance and Projections - **Cost Management**: - Imported bauxite prices decreased quarter-over-quarter in Q1 2026, while domestic prices remained stable [4] - Labor costs increased in Q4 2025 due to salary and bonus recognition [4] - **Profitability Outlook**: - The profit from the alumina segment is expected to be lower quarter-over-quarter, while the aluminum segment is projected to be higher in Q4 2025E [2] - Chalco's expected net profit for Q4 2025 is estimated at RMB 2.9 billion, with an impairment loss of approximately RMB 2 billion anticipated [8] Market Valuation - **Target Price**: - The target price for Chalco's H-share is set at HK$15.94, based on a price-to-book ratio of 2.81x for 2026E, reflecting stronger-than-historical-average return on equity [9] Risks and Challenges - **Downside Risks**: - Potential risks include lower-than-expected aluminum and alumina prices, higher-than-expected costs, and increased impairment losses [10] Investment Recommendation - **Rating**: - Maintain a "Buy" rating, with Chalco identified as a top pick in the coverage [1][6] Additional Information - **Market Capitalization**: - Approximately HK$256.03 billion (US$32.83 billion) [6] - **Expected Total Return**: - 23.1%, with an expected dividend yield of 4.6% [6] This summary encapsulates the critical insights and projections from the 2026 Business Outlook Call for Aluminum Corporation of China, highlighting the company's strategic focus, financial outlook, and market positioning.

Economic Indicators - The December consumer price index (CPI) report showed core CPI rose 0.2% month-over-month and 2.6% year-over-year, both below pre-market estimates of 0.3% and 2.8% respectively [1] - The monthly headline CPI increased by 0.3% in December, resulting in an annual rate of 2.7%, which was in line with economists' forecasts [1][2] Federal Reserve Outlook - The steady inflation and a stable jobs market are likely to lead the Federal Reserve to maintain interest rates during their first meeting of the year on January 28-29 [2] - Fed funds futures are currently pricing in two quarter-point cuts starting in June 2024 [2] Earnings Season - The earnings season commenced with JPMorgan Chase reporting better-than-expected results for the December quarter, although the stock did not show significant movement [3] - Delta Airlines experienced a 4% decline in premarket trading due to mixed earnings results [3][4] Sector Performance - Defense stocks, particularly L3Harris Technologies, surged 13% after announcing plans for an IPO of its missile solutions business in partnership with the U.S. Defense Department [5] - Chip manufacturers Intel and AMD saw stock increases following an upgrade to overweight by KeyBanc, citing a potential upside of over 30% due to a memory supercycle and strong data center demand [5] - Health sciences company Revvity reported better-than-expected preliminary results, contributing to its stock strength early in the session [5]

Group 1: Dollar and Gold Market - A sharp decline in the U.S. Dollar is contributing to a rally in gold prices, with the dollar experiencing its largest drop in three weeks due to escalating tensions between the Federal Reserve and the Trump administration [1] - The political risk surrounding the Fed's independence is threatening stability in both the Treasury market and the dollar [1] Group 2: Fed Rate Cut Expectations - Traders are now betting on a 95% chance that the Fed will keep interest rates unchanged at its January meeting, an increase from 86% prior to the jobs report [3] - Goldman Sachs and Barclays have revised their forecasts, now expecting a 25 basis point reduction in September and December, following a cut in June [4] - Morgan Stanley has also adjusted its predictions, moving expected rate cuts from January and April to June and September [4] Group 3: Labor Market Insights - The state of the labor market is a critical factor influencing Fed rate cut timing, with Goldman Sachs suggesting that stabilization in the labor market could lead the FOMC to shift to normalization mode [5] - Bank of America posits that the labor market may be weakening more rapidly than the Fed acknowledges, which could lead to earlier or more frequent cuts than currently indicated [5] - Both Goldman and Bank of America agree that the labor market is the key driver for Fed decisions, but they differ in their outlook on its stability [5]

Economic Indicators - The markets are pricing in a 5% chance of a -25 basis point rate cut at the FOMC's next meeting on January 27-28 [1] - The University of Michigan's January 1-year inflation expectations remained unchanged at 4.2%, while the 5-10 year expectations increased to 3.4% from 3.2% in December [1] - The University of Michigan's January consumer sentiment index rose by 1.1 to 54.0, exceeding expectations of 53.5 [2] - US October housing starts fell by 4.6% month-over-month to a 5.5-year low of 1.246 million, below expectations of 1.330 million [2] - US December nonfarm payrolls increased by 50,000, lower than the expected 70,000, while the unemployment rate fell by 0.1 to 4.4% [2] Currency Market - The dollar index rallied to a 1-month high, finishing up by 0.20%, supported by mixed US payroll data and a rise in consumer sentiment [3] - The dollar is under pressure due to the Fed's liquidity boost, with $40 billion monthly purchases of T-bills starting in mid-December [5] - The euro (EUR/USD) fell to a 1-month low, down by 0.21%, influenced by dollar strength but supported by better-than-expected Eurozone retail sales and German industrial production [6][7] Precious Metals - Gold and silver prices increased sharply after President Trump directed Fannie Mae and Freddie Mac to purchase $200 billion in mortgage bonds, seen as a form of quantitative easing [13] - Precious metals are supported by safe-haven demand amid geopolitical risks and expectations of easier monetary policy from the Fed [14] - Strong central bank demand for gold is evident, with China's PBOC reserves increasing by 30,000 ounces to 74.15 million troy ounces in December [16] - Fund demand for precious metals remains robust, with long holdings in gold and silver ETFs reaching multi-year highs [17]

Market Overview - Major market indexes are mixed in pre-market trading, with the Dow down 46 points, S&P 500 up 14 points, Nasdaq up 144 points, and Russell 2000 up 1 point [1] - Over the past month, the Dow and S&P 500 have increased by 1.2% and 0.55% respectively, while the Nasdaq has decreased by 0.7% and Russell 2000 is nearly flat at -0.02% [1] Upcoming Earnings - Q4 earnings season is set to begin next week with major banks like JPMorgan and Citigroup, along with early reporters such as Delta Air Lines [2] - These earnings reports will provide insights into the performance of the U.S. economy in the final quarter of 2025 [2] Employment Data - The first full week of the month is referred to as "Jobs Week," which will include monthly employment data from both private and overall non-farm sectors [3] - ADP's private-sector payrolls reported a loss of 32,000 jobs last month, the worst figure in nearly three years, with forecasts predicting a gain of 45,000 jobs for December [4][3] - The Job Openings and Labor Turnover Survey (JOLTS) will also be released, showing a recovery in job openings from summer lows, with October's openings at 7.67 million [5] - Weekly Jobless Claims report indicates a significant drop to 199,000, marking only the second time in two years that claims fell below 200,000 [6] - Continuing Claims have decreased to below 1.9 million, suggesting a perceived strength in the labor market despite notable layoffs at companies like Amazon and Nestlé [7] Employment Situation Report - The Employment Situation report on Friday is expected to show an unemployment rate of 4.7%, the highest since September 2021, with non-farm payrolls projected to increase by 54,000 for December [9][10] - A positive surprise in the employment data could be beneficial for the market, while a disappointing report may increase the likelihood of a Federal Reserve rate cut [10] Commodity Market - Oil prices are rising, along with gold and silver, as a hedge against risks to stock market equities, amid geopolitical tensions such as the U.S. invasion of Venezuela [11] - Bond yields remain stable, with the 10-year yield currently below 4.18% [11] Manufacturing Data - ISM Manufacturing numbers for December are expected to rise by 10 basis points to 48.3%, still indicating contraction as it remains below the 50 level [12] - ISM Services data is anticipated to reach 52.1%, reflecting growth in that sector [12]