Bloomberg Chinese stocks climbed to multi-year highs, fueled by sustained optimism over the country’s AI advances and emerging signs of an economic recovery. The benchmark CSI 300 Index advanced 1.6% to close at its highest level in four years, while the Shanghai Composite Index rose 1.5% to its strongest since July 2015. Materials and technology shares were among the day’s best performers. Buoyed by upbeat manufacturing activity, President Xi Jinping’s positive assessment of the economy and a continue ...

Key industrial data showed more pain for U.S. manufacturers on Monday. Stocks shrugged it off. ...

Market Performance - U.S. stocks experienced gains, with the Dow Jones index increasing by 1.66% to 49,183.51, the NASDAQ rising by 0.80% to 23,420.85, and the S&P 500 up by 0.81% to 6,913.76 [1] - European shares also saw positive movement, with the eurozone's STOXX 600 gaining 0.94%, Spain's IBEX 35 Index rising by 0.70%, London's FTSE 100 up by 0.54%, Germany's DAX increasing by 1.34%, and France's CAC 40 climbing by 0.20% [5] - Asian markets closed mostly higher, highlighted by Japan's Nikkei 225 gaining 2.97% and China's Shanghai Composite surging 1.38%, while India's BSE Sensex fell by 0.38% [6] Commodity Prices - In commodity trading, oil prices increased by 1.7% to $58.30, gold rose by 2.9% to $4,454.40, silver surged by 7.3% to $76.230, and copper climbed by 5.1% to $5.9815 [4] Company Developments - Momentus Inc (NASDAQ:MNTS) shares surged by 57% to $8.98 following the announcement of an additive-manufactured fuel tank for flight testing [8] - GH Research PLC (NASDAQ:GHRS) shares increased by 17% to $15.43 after the FDA lifted the clinical hold on its Investigational New Drug Application for GH001 [8] - VerifyMe Inc (NASDAQ:VRME) shares rose by 66% to $1.12 due to a strategic merger letter of intent with Open World [8] - Zenas Biopharma Inc (NASDAQ:ZBIO) shares dropped by 57% to $14.94 after announcing results from the Phase 3 INDIGO trial [8] - Palisade Bio Inc (NASDAQ:PALI) shares fell by 16% to $2.10, and Palvella Therapeutics Inc (NASDAQ:PVLA) decreased by 14% to $86.16 [8] Economic Indicators - The ISM manufacturing PMI declined for the third consecutive month to 47.9 in December, marking the lowest reading since October 2024, down from 48.2 in November and below market estimates of 48.3 [2][7]

U.S. Stock Market Performance - U.S. stocks traded higher, with the Dow Jones index gaining more than 250 points, closing up 1.66% at 49,183.51 [1] - The NASDAQ increased by 0.80% to 23,420.85, and the S&P 500 rose by 0.81% to 6,913.76 [1] Sector Performance - Energy shares experienced a gain of 2.9% on Monday [1] - Utilities stocks saw a decline of 2.2% [1] Commodity Market - Oil prices rose by 1.7% to $58.30 [4] - Gold increased by 2.9% to $4,454.40 [4] - Silver surged by 7.3% to $76.230, while copper rose by 5.1% to $5.9815 [4] European Market Performance - European shares were higher, with the eurozone's STOXX 600 gaining 0.94% [5] - Spain's IBEX 35 Index rose by 0.70%, London's FTSE 100 increased by 0.54%, Germany's DAX gained 1.34%, and France's CAC 40 climbed 0.20% [5] Asian Market Performance - Asian markets closed mostly higher, with Japan's Nikkei 225 gaining 2.97% [6] - Hong Kong's Hang Seng Index increased by 0.03%, China's Shanghai Composite surged by 1.38%, while India's BSE Sensex fell by 0.38% [6] Company-Specific Developments - Momentus Inc (NASDAQ:MNTS) shares surged 57% to $8.98 following the announcement of an additive-manufactured fuel tank for flight testing [8] - GH Research PLC (NASDAQ:GHRS) shares rose 17% to $15.43 after the FDA lifted the clinical hold on its Investigational New Drug Application [8] - VerifyMe Inc (NASDAQ:VRME) shares increased by 66% to $1.12 due to a strategic merger letter of intent with Open World [8] - Zenas Biopharma Inc (NASDAQ:ZBIO) shares dropped 57% to $14.94 after announcing Phase 3 INDIGO trial results [8] - Palisade Bio Inc (NASDAQ:PALI) shares fell 16% to $2.10, and Palvella Therapeutics Inc (NASDAQ:PVLA) decreased by 14% to $86.16 [8]

Summary of Key Points from the Conference Call Industry Overview: China Manufacturing Sector - Significant rebound in official manufacturing PMI: The NBS manufacturing PMI rose from 49.2 in November to 50.1 in December, surpassing both consensus and expectations. This rebound contrasts with declining steel production and subdued Emerging Industries PMI, aligning with the typical "quarter-end rebound" pattern observed in 2025, where PMI increased in March, June, September, and December, then declined the following month due to pressure to boost GDP growth at quarter-end [1][4] Consumer Goods - Extension of consumer goods trade-in program: On December 30, the NDRC and MOF released guidelines for the consumer goods trade-in program for 2026. The program initially boosted retail sales in Q4 2024 and H1 2025, but its impact diminished after June due to funding shortages and approval tightening. The new guidelines adjust subsidy categories and levels, with full-year subsidies projected at approximately RMB 250 billion in 2026, slightly less than the RMB 300 billion allocated in 2025 [2] Economic Growth Projections - Expected slowdown in growth: Growth is projected to slow from 3.8% in 2025 to 2.7% in 2026 due to fewer subsidies and their fading impact [5] Currency Dynamics - USD/CNY exchange rate: The USD/CNY broke below 7.0 at the end of 2025, despite PBOC's daily fixings signaling a moderation in the pace of appreciation. The fixing remained at 7.0288 by year-end, above the model-implied value near 7.00. Key drivers include broad USD weakness and year-end FX settlement demand. The PBOC may prefer a stronger CNY while avoiding rapid appreciation. Projections indicate USD/CNY reaching 6.95/6.90/6.85 in 3/6/12 months [5] Retail Sales and Economic Activity - Retail sales and economic activity: Recent data indicates that retail sales fell in November, and manufacturing PMIs and official non-manufacturing PMI increased in December. Industrial profits and revenue edged up sequentially in November, while November activity data broadly missed market expectations [7] Additional Insights - Policymakers unveiled implementation details for the 2026 "dual upgrade" program, indicating a focus on enhancing economic resilience and sustainability [7] - The PBOC adopted a measured easing stance at the Q4 MPC meeting, reflecting a cautious approach to monetary policy amid economic challenges [7] This summary encapsulates the key points discussed in the conference call, focusing on the manufacturing sector, consumer goods, economic growth projections, currency dynamics, and overall economic activity in China.

A closely-watched index that measures U.S. manufacturing activity fell to 47.9% in December, according to the Institute for Supply Management on Monday. Any number below 50% signals contraction. ...

Market Overview - U.S. stocks traded higher, with the Dow Jones index gaining over 250 points, up 0.54% to 48,641.58, NASDAQ up 0.65% to 23,386.57, and S&P 500 up 0.63% to 6,901.52 [1] - Energy shares increased by 2.9% on Monday [1] Sector Performance - Consumer staples stocks dipped by 0.4% [2] Commodity Prices - Oil traded up 1.4% to $58.12, gold up 2.4% to $4,433.50, silver up 7.5% to $76.320, and copper rose 4.1% to $5.9260 [5] European Market Performance - European shares were higher, with the eurozone's STOXX 600 gaining 0.5%, Spain's IBEX 35 Index up 0.3%, London's FTSE 100 up 0.4%, Germany's DAX up 0.2%, and France's CAC 40 up 0.1% [6] Asian Market Performance - Asian markets closed mostly higher, with Japan's Nikkei 225 gaining 2.97%, Hong Kong's Hang Seng Index up 0.03%, China's Shanghai Composite surging 1.38%, and India's BSE Sensex falling 0.38% [7] Company News - The U.S. FDA lifted the clinical hold on GH Research Plc's Investigational New Drug Application for GH001 [3] - Momentus Inc shares surged 94% to $11.14 after announcing the development of an additive-manufactured fuel tank [9] - TMD Energy Ltd shares increased by 76% to $0.78 [9] - VerifyMe Inc shares rose 40% to $0.94 following a strategic merger announcement [9] - Zenas Biopharma Inc shares dropped 55% to $15.54 after Phase 3 trial results [9] - Signing Day Sports Inc shares fell 37% to $0.60, and Lavoro Ltd shares decreased by 26% to $0.82 [9]

Report Industry Investment Rating - No information provided on the industry investment rating Core Viewpoints - Asia IG names were unchanged to 2bps tighter in the morning, with flows favoring higher - yielding issues in greater Asia and LGFV spaces [3] - Macau's gaming industry had solid GGR growth in 2025, and the 2026 target seems conservative [6] - China's PMI signaled a temporary improvement, with expected GDP growth decline from 5% in 2025 to 4.8% in 2026, and potential policy stimulus [3][10][11][15] Summary by Related Catalogs Trading Desk Comments - ARAMCO 35s tightened 1bp, FABUH 30 widened 5bps last Friday [2] - Chinese IG names had spreads changes of 5bps tighter to 4bps wider, NWDEVL Perps rose 0.2 - 1.9pts, VDNWDL 9 Perp increased by 1.4pts [2] - The buy recommendation on NWDEVL 5.25 Perp and NWDEVL 8.675 02/06/28 was changed to neutral, and a buy on VDNWDL 9 Perp was initiated [2] - Lai Sun Development's Chairman made a profit of USD11.3mn from trading LASUDE 26, and LASUDE 26 was up by 0.8pt [2] - Various bonds in different regions and industries had price and spread changes, such as Macau gaming, Chinese properties, JP, and SE Asia [2] Last Trading Day's Top Movers - Top performers included VLLPM 9 3/8 07/29/29 with a 3.3 price change, NWDEVL 5 1/4 PERP with a 1.9 change [4] - Top underperformers included FTLNHD 11.88 09/30/27 with a - 0.9 change, COSL 2 1/2 06/24/30 with a - 0.9 change [4] Macro News Recap - S&P (+0.19%), Dow (+0.66%) and Nasdaq (-0.03%) were mixed last Friday, and Trump made a statement about Venezuela [5] - 5/10/30 year UST yield was higher, with 2/5/10/30 year yield at 3.47%/3.74%/4.19%/4.86% [5] Desk Analyst Comments - Macau Gaming - Macau's GGR in Dec'25 increased 14.8% yoy to MOP20.9bn, and cumulatively in 2025, it increased 9.1% to MOP247.4bn, 84.6% of 2019 level [6] - In 2025, tourist arrival was 40.1mn, up 15% yoy and exceeding the 2019 record [6] - Macau government's 2026 GGR target of MOP236bn seems conservative [6] - MPELs and STCITYs are top picks, WYNMAC'27 and '29 are yield - pick - up plays, and neutral on MGMCHIs, SANLTDs, and SJMHOLs [7] Desk Analyst Comments - China Economy - China's manufacturing PMI rebounded in December but recovery was fragile due to seasonality [10][11][12] - Demand improved with new orders expanding and export orders approaching expansion, deflation pressure eased [10][11][12] - Service PMI remained in contraction, construction PMI rebounded [11][13] - Growth is expected to be under pressure in early 2026, potentially triggering policy stimulus [11][14][15] - Expect a 50bp cut in RRR and a 10bp cut in LPR in 1Q26, an additional 10bp LPR cut in 3Q26, and broad fiscal deficit at 8.5% in 2026 [11][14][15] Offshore Asia New Issues - No new offshore Asia issues were priced on the last trading day [17] - Pipeline issues include BOC Aviation, Export - Import Bank of India, and Hyundai Capital America with various tenors and coupon rates [18] News and Market Color - Onshore primary issuances suspended last Friday during the New Year Holiday [21] - China will broaden fiscal spending in 2026 and prioritize domestic demand [21] - Multiple corporate events such as China Jinmao's redemption, CTF Services' acquisition lapse, and rating changes [21]

Group 1: Keynote Insights at CES - Nvidia CEO Jensen Huang and AMD CEO Lisa Su will deliver keynote speeches at CES, which could significantly influence sentiment in the AI infrastructure sector heading into 2026 [1][2] - Huang's presentation will be closely watched for announcements regarding next-generation AI accelerators and data center roadmaps, as well as customer demand sustainability [1] - AMD's Lisa Su is under pressure to showcase the adoption of the MI300 series and competitive positioning against Nvidia in data center GPUs, with potential wins from cloud service providers enhancing AMD's credibility [1] Group 2: Economic Data and Market Sentiment - The week features a comprehensive economic data calendar culminating in the December jobs report, which will provide insights into labor market conditions and influence Federal Reserve policy expectations [2][3] - Key economic indicators such as ISM Manufacturing and Non-Manufacturing PMIs will offer insights into industrial and services sector health, impacting market sentiment and potential sector rotation [4][6] - The absence of major earnings reports allows economic data and CES announcements to dominate market focus, testing whether the market can maintain momentum from any year-end rally [2][6] Group 3: Inflation and Federal Reserve Policy - The week's economic data will provide multiple perspectives on inflation, with ISM prices components and wage growth data being crucial for assessing inflationary pressures [7] - The Federal Reserve's December meeting highlighted the need for sustained evidence of disinflation before committing to further policy easing, making this week's inflation signals particularly significant [7] - Any evidence of reaccelerating price pressures could impact rate-sensitive sectors and support the dollar, while benign inflation readings may provide relief for risk assets [7]

Core Insights - The conference in Suzhou focused on creating a globally leading "Intelligent Manufacturing City" by 2035, with a detailed action plan for new industrialization by 2026 [3][10] - The initiative emphasizes the integration of AI in manufacturing, aiming to enhance productivity and innovation through eight key actions [3][10] Group 1: Action Plan and Goals - The "2026 Action Plan for Promoting New Industrialization in Suzhou" aims to establish a modern industrial system and significant advancements in new productivity by the end of the 14th Five-Year Plan [3][10] - The plan includes the development of 150 industrial AI models and over 200 high-quality industrial data sets by 2026, focusing on practical applications in manufacturing [5][8] Group 2: AI and Data Integration - Suzhou will promote the use of AI in manufacturing by creating over 100 replicable application scenarios by 2026, enhancing the practical value of AI solutions [5][6] - The city aims to build a robust data-sharing infrastructure to support the development of industry-specific AI models, leveraging its extensive manufacturing base [5][8] Group 3: Technological Infrastructure - The establishment of a high-efficiency intelligent computing network is planned, with a target of achieving a total computing power of 40,000 PFLOPS by 2026 [8] - Suzhou aims to innovate at least six AI chip products that fill domestic gaps and support the development of over 20 standards in the "AI+Manufacturing" sector [8][10] Group 4: Collaborative Efforts - The conference highlighted the importance of collaboration between government and enterprises, showcasing participation from leading companies to drive the integration of AI and manufacturing [10] - The initiative includes a focus on addressing key technological challenges in the manufacturing sector, with government support for innovation resources and funding [10]