Economic Indicators - Core inflation in December was up 1.2% year on year, unchanged from the previous month [1] - Consumer prices rose 0.8% year on year, the highest level since February 2023, following a 0.7% increase in November [2] - Monthly consumer prices grew 0.2%, exceeding the expected 0.1% gain [3] Industrial Performance - Factory-gate prices dipped 1.9% in December, better than the forecasted 2% decline, extending a deflationary streak beyond three years [1] - Industrial production growth is estimated to have edged up to around 4.9%, supported by a pickup in manufacturing activity [5] - The official purchasing managers' index (PMI) rose to 50.1 from 49.2, indicating a return to growth in manufacturing activity after eight months of decline [5] Investment and Consumption - Fixed-asset investment likely contracted by around 11.8% in December, worsening from an 11.1% decline in November [5] - Policymakers are expected to implement measures to boost consumption and stabilize the property market, although past efforts have not yielded significant results [6] - New home sales in floor space are estimated to fall by 7% in 2026 after an 8% decline in 2025 [6] Profitability and Market Dynamics - Industrial firms experienced a profit drop of 13.1% year-on-year in November, marking the steepest decline in over a year [7] - Carmakers have initiated a new round of price cuts and perks due to sluggish demand and the withdrawal of part of a tax incentive for electric vehicles [8]

Group 1: Market Trends and Predictions - Veteran investor Louis Navellier warns against chasing the recent "junk rally" in low-quality stocks, advocating a return to quality stocks with strong earnings growth as the 2026 financial year begins [1] - Navellier predicts a "big flip" in January where quality companies with accelerating sales and earnings will regain market leadership, following a fourth-quarter mean reversion [2] - He highlights an increase in institutional buying pressure in data center stocks as an early sign of this trend [3] Group 2: Company Earnings and Growth Projections - Navellier is positioning his portfolio for the upcoming corporate earnings season, referring to it as "judgment day" for earnings [4] - Nvidia Corp. is identified as a top pick, expected to report a 66.7% increase in sales and a 71% jump in earnings, driven by new chip sales to China [4] - Palantir Technologies is forecasted to see a 64.1% earnings surge due to its role in AI implementation for government contracts [5] - Seagate Technology and Celestica are also highlighted as beneficiaries of the data center boom, with earnings expected to rise 37.6% and 58.1%, respectively [5] Group 3: Economic Outlook - Navellier expresses concern over the broader economy, predicting that deflation will be the primary story for 2026, rather than inflation [6] - He cites falling rental costs, declining condo prices, and low energy prices as indicators that the Federal Reserve should cut rates by at least 100 basis points to prevent a deeper economic slowdown [7] Group 4: Market Performance - In 2025, the S&P 500 increased by 16.65%, while the Nasdaq Composite and Dow Jones gained 20.54% and 13.38%, respectively [8] - The SPDR S&P 500 ETF Trust and Invesco QQQ Trust ETF showed positive premarket movements, with SPY up 0.24% at $684.82 and QQQ up 0.52% to $616.29 [8]

Core Viewpoint - Veteran investor Louis Navellier warns against the recent "junk rally" in low-quality stocks and advises a shift back to quality stocks with strong earnings growth as the 2026 financial year begins [1][2] Group 1: Market Trends - Navellier highlights a fourth-quarter mean reversion where previously underperforming stocks led the market, which he deems unsustainable [2] - He anticipates a "big flip" in January, where quality companies with accelerating sales and earnings will regain market leadership [2] Group 2: Stock Picks - Navellier's top pick is Nvidia Corp. (NASDAQ: NVDA), expecting a 66.7% increase in sales and a 71% jump in earnings due to new chip sales to China [4] - He is also bullish on Palantir Technologies Inc. (NASDAQ: PLTR), forecasting a 64.1% earnings surge as a leading "AI implementer" for government contracts [4] - Seagate Technology Holdings PLC (NASDAQ: STX) and Celestica Inc. (NYSE: CLS) are highlighted as beneficiaries of the data center boom, with earnings expected to rise 37.6% and 58.1%, respectively [5] Group 3: Economic Outlook - Navellier expresses concern over the broader economy, predicting deflation as the primary story for 2026, citing falling rental costs, declining condo prices, and low energy prices [6] - He argues that the Federal Reserve needs to cut rates by at least 100 basis points to prevent a deeper economic slowdown [6] Group 4: Market Performance - In 2025, the S&P 500 increased by 16.65%, while the Nasdaq Composite and Dow Jones gained 20.54% and 13.38%, respectively [7] - The SPDR S&P 500 ETF Trust (NYSE: SPY) was up 0.24% at $684.82, and the Invesco QQQ Trust ETF (NASDAQ: QQQ) advanced 0.52% to $616.29 in premarket trading [7]

Core Viewpoint - China's factory activity showed unexpected growth in December, ending an eight-month decline, driven by pre-holiday orders as officials aim to stimulate the manufacturing sector without exacerbating deflation [1]. Group 1: Economic Indicators - The official purchasing managers' index (PMI) increased to 50.1 in December from 49.2 in November, surpassing the 50-point threshold that indicates growth and exceeding the forecast of 49.2 [2]. - The production sub-index rose to 51.7 from 50.0 in November, while new orders increased to 50.8 from 49.2, marking the strongest performance since March [4]. - Supplier delivery times improved, leading to a rise in the production and activity expectations component to 55.5, the highest since March 2024 [4]. Group 2: Sector Performance - New export orders remained weak, increasing slightly to 49.0 from 47.6 in November, highlighting the necessity for officials to enhance domestic demand and reduce reliance on U.S. demand [5]. - Confidence in the manufacturing sector appears to be improving due to pre-holiday stockpiling, particularly in the agricultural, food processing, and food and beverage sectors [6]. Group 3: Challenges and Outlook - Despite the positive PMI data, experts suggest that the improvement may be short-lived, driven by month-to-month fiscal spending fluctuations rather than a sustained recovery, with structural challenges from the property downturn and industrial overcapacity expected to persist into 2026 [3]. - Domestic demand remains depressed, as indicated by a 13.1% year-on-year decline in profits for Chinese industrial firms in November, the steepest drop in over a year, suggesting that households are not compensating for the shortfall amid a slowing global economy [7].

Group 1 - The expectation of a smaller U.S. trade deficit and a weaker U.S. dollar may benefit commodities in the upcoming year [1][3] - The performance of commodities is more influenced by the dollar than by broad-based industrial demand [2] - Concerns about higher inflation due to the need to restock fully tariffed goods could impact market dynamics [3][4] Group 2 - Commodities have shown strong performance, with the best returns since 2017, driven by the debasement of the U.S. dollar [5] - The bullish outlook on copper miners and energy, particularly oil, is based on their potential despite market skepticism [6] - Earnings are a critical factor for equities, with expectations for continued good earnings supporting market performance [7] Group 3 - There is significant fiscal spending globally, which supports commodities and emerging markets [8] - Emerging market equities are expected to outperform U.S. equities, with a notable shift in global equity leadership [9] - The forecast indicates better earnings growth in the U.S. in 2026 and 2027, suggesting a period of emerging market and non-U.S. equity outperformance [10]

Summary of Japan Outlook Report Industry Overview - **Industry**: Japanese Economy and Financial Markets - **Key Focus**: Macroeconomic outlook, monetary policy, foreign exchange, and equity strategy for Japan in 2026 Key Points Economic Recovery - Japan's economy is expected to continue its recovery in 2026, supported by consumer spending from PM Takaichi's economic package and strong capital expenditures (capex) to address labor shortages [1][6][7] - Core CPI inflation is projected to fall below 2% year-on-year in Q1 2026 and remain there for the year, driven by slower food inflation, stable energy prices, and policy measures like scrapping the provisional gasoline tax [1][25][27] Monetary Policy - The Bank of Japan (BOJ) raised its policy rate by 25 basis points to 0.75% on December 19, 2025, but is expected to keep rates unchanged throughout 2026 [2][34] - Market expectations suggest an 80% probability of a rate hike to 1.0% by July 2026, which may be overestimated [2][34] - Future rate hikes are anticipated in January and July 2027, with a terminal rate of 1.25% expected by mid-2027 [29][30] Foreign Exchange Dynamics - The yen is under downward pressure, with expectations that it will remain weak in H1 2026, potentially stabilizing between 150-160 USD/JPY before correcting to 140-150 in H2 2026 [3][62] - The Takaichi administration's tolerance for a weak yen is a key factor influencing exchange rates, with expectations of increased inflation potentially leading to upward pressure on the yen later in 2026 [3][62] Capital Expenditures and Corporate Strategy - Capex is crucial for economic recovery, with a shift towards labor-saving investments and automation due to labor shortages [11][15] - Companies are expected to adjust their capital investments to replace human labor with technology, which may lead to a more stable capex trend [17][15] Risks and Challenges - Key risks include the extent of fiscal expansion under the Takaichi administration, potential yen depreciation, and geopolitical tensions, particularly between Japan and China [1][18][19] - A downturn in spending by inbound visitors from China could negatively impact Japanese GDP, with estimates suggesting a potential decline of around 0.1% [18] Equity Market Outlook - The Japanese equity market may benefit from improved earnings growth prospects in FY26, with expected returns around 7% becoming more feasible [4][19] - Market participants are advised not to excessively fear moderately high-pressure economic policies, as many companies are improving margins by halting unprofitable operations [4][19] Policy Implications - The Takaichi administration's economic policies focus on supporting household activity in the short term while aiming to raise potential GDP in the long term [19][22] - The lack of an output gap suggests limited need for demand stimulation, with fiscal policy likely to be influenced by political considerations rather than economic indicators [21][22] Additional Insights - The report emphasizes the importance of monitoring the evolving political landscape in Japan, as changes could significantly impact economic policies and market expectations [63][64] - The anticipated recovery in the Japanese economy is seen as a gradual process, with structural changes in corporate behavior and investment strategies being critical for sustainable growth [11][17]

Core Viewpoint - The current market dynamics show an unusual correlation between rising stocks and precious metals, particularly gold, which has increased nearly 70% this year, significantly outperforming the S&P 500's 20% rise [1][2]. Gold Market Analysis - Gold's performance is attributed to geopolitical tensions, particularly following Russia's invasion of Ukraine, and the current U.S. administration's policies that may lead to increased inflation, benefiting gold prices [2][7]. - Historical patterns suggest that new long positions in gold at current levels may not be favorable, as past instances indicate potential corrections after significant price increases [3][4]. - Goldman Sachs projects a base case scenario for gold prices reaching $4,900 per ounce by 2026, with potential for further upside [4]. Market Volatility and Predictions - The current gold price is approximately 100% above its 60-month moving average, a situation not seen since 1939, raising concerns about a possible correction [5][9]. - The low volatility in the stock market, currently at 11%, is expected to rise closer to its historical average of around 20%, which could signal a market correction [10]. - The inflow of gold-backed ETFs has been increasing, contrasting with outflows from Bitcoin ETFs, indicating a shift in investor sentiment towards precious metals [11]. Cryptocurrency Outlook - Bitcoin is anticipated to revert to its historical mean of around $50,000, with skepticism about its ability to surpass $100,000 due to market saturation and overhype [12][14]. - The ratio of Bitcoin to gold has decreased to about 19 ounces of gold per Bitcoin, the lowest in nearly two years, suggesting a bearish outlook for Bitcoin compared to gold [16]. Conclusion on Precious Metals - Gold is expected to continue outperforming other commodities and the stock market, particularly in a declining stock market environment, which poses a significant risk for next year [15].

Market Trends & Economic Outlook - CPI数据低于预期，但美联储更关注劳动力市场，通胀可能在明年超过3%，但总体风险在劳动力方面[1] - 汽油价格处于四年低位，工资下降，通胀互换处于年度低点，市场预期美联储明年可能不会降息[1] - AI是潜在的通货紧缩力量，可能限制工资增长，并对劳动力市场产生长期影响[1][2] - 市场出现轮动，资金从成长股转向价值股，从小盘股转向大盘股，这种轮动可能预示着PMI指数上升[2] - 预计被市场遗忘的股票将跑赢拥挤的领头羊，AI基础设施股赚钱难度加大，视觉语言模型（VLM）将成为关注点[2] - 数据中心建设、AI发展和同步升级周期将推动PMI指数上升，但如果大型科技公司表现不佳，可能导致市场出现20%的回调风险[2] Investment Opportunities & Risks - 看好Tesla，认为它将是Mag 7中表现最好的股票，同时Nvidia和Apple也将表现出色，不看好超大规模企业和基于代码构建的公司[2] - Oracle面临风险，因其资产负债表使用方式和收入不足以抵消风险，但相信其收入将在明年加速增长[3] - 传统金融公司Cisco将受益于AI驱动的流量和网络安全需求增长，稳定币交易量增加也将利好Bitcoin[46][47][64] - 银行是AI交易的受益者，因为它们有能力利用AI取代知识型员工，制药公司也在向AI药物发现转型[49][51] - 比特币需要连续三天收于92,000美元上方才能改变下行趋势，AI吸走了本应流入加密货币的资金，但这种情况将在今年开始改变[57][63] AI & Technological Disruption - AI代理正在攻击知识型员工，个人需要成为AI原生，利用AI代理，而不是被AI代理取代[5][6] - 法律公司采用AI的动机可能是为了显得具有AI能力，但实际使用率可能不高，因为效率提高可能会减少按小时计费的收入[4] - 投资者在公开市场中缺乏参与AI趋势的途径，与私人市场相比，公开市场中可投资的AI公司数量不足[39][41] - AI的真正价值在于视觉语言模型（VLM），而不是传统的人工智能，Tesla是一家AI公司，因为它需要计算机视觉来实现机器人出租车和人形机器人[49][46]

Group 1 - The Bank of Japan raised its key policy rate by 0.25 percentage points to 0.75%, marking the highest level since September 1995 to curb inflation [1] - Inflation in Japan has remained above the BOJ's target of about 2%, recorded at 3% in November, excluding volatile fresh food costs [2] - The BOJ's decision to raise rates comes after Japan's economy contracted at a 2.3% annual rate in the last quarter, despite improved business sentiment and price pressures [4] Group 2 - The current 0.75% rate is still considered low, especially compared to the rates of other central banks that have raised rates to combat inflation [3] - Japan's national debt is nearly three times the size of its economy, and low interest rates have been a strategy to manage this debt [5] - The weakening of the Japanese yen has contributed to rising inflation, as it increases the cost of imported goods [6]

Inflation Analysis - CPI (消费者物价指数) 年同比实际数据为 2.7%，低于经济学家预测的 3.1%，低 40 个基点[3] - 核心 CPI 年同比实际数据为 2.6%，同样低于经济学家预测的 3.0%，低 40 个基点[3] - 短期来看，核心 CPI 年化率（过去 3 个月）仅为 1.6%，为 2021 年 2 月以来的最低水平[7] - 避险、石油和劳动力这三个广泛的经济指标均显示出通货紧缩的迹象[8] Coinbase's Strategy - Coinbase 旨在成为全球排名第一的金融服务应用，而不仅仅是加密货币公司[15] - Coinbase 推出八种新产品，包括股票交易、预测市场、期货和永续合约交易、Solana DEX 交易、Coinbase Business、Coinbase Advisor、Base 应用和 Coinbase 定制稳定币[20][21][22] - Coinbase 拥有 1 亿个全球验证账户，年收入达 80 亿美元，并且收入以超过 40% 的速度同比增长[14] Market Competition - Coinbase 和 Robinhood 等公司都在争夺“超级应用”的地位，希望在一个应用中提供股票、加密货币、预测市场、永续合约、稳定币、支付和存款等服务[16][23] - 传统金融机构如摩根大通、富达和高盛预计也将进入这一领域，加剧市场竞争[24] Warrior Dividend - 美国政府向 145 万军人发放“战士红利”，每人 1776 美元[27][28][29] - 报告提出疑问，这笔资金的来源以及是否会增加国家债务[30][31]