Macro Theme of the WeekThe minutes from the Federal Reserve’s December FOMC meeting released this week show that internal divisions over the policy path have widened significantly. Although the Committee ultimately decided to cut rates in December, the number of dissenting voices reached a level rarely seen.Overall, the minutes had a limited impact on risk assets, serving mainly to reinforce the market’s prior view that rate cuts in Q1 2026 are unlikely.On one hand, most officials supported rate cuts as a precaution against potential weakness in the labor market. On the other hand, some argued for keeping rates unchanged for a period of time, and a small minority believed that conditions in December did not justify a rate cut at all.This internal divergence suggests that the Fed has yet to

Macro Highlights This WeekThe December FOMC delivered a widely expected 25bp rate cut and announced roughly USD 40bn in short-term Treasury purchases to replenish system reserves. However, the market’s real focus was not the policy action itself, but Chair Powell’s rare admission that current job growth may be “systematically overstated.”The latest dot plot shows a sharply widened divergence in views on the 2026 rate path. While the median still points to one 25bp cut, the range now spans from no cuts to as much as 150bp of easing, highlighting a lack of consensus among policymakers on the economic outlook.At the corporate level, Oracle’s earnings triggered the market’s first broad-based concern over AI capex returns. Weak cloud revenue combined with sharply higher capital spending drove t

Macro HighlightsIn Japan, Governor Ueda successfully persuaded the Prime Minister to agree to a 25bp rate hike to 0.75% in December, marking the official end of Japan’s ultra-low interest rate era. With the potential retracement of the trillion-dollar yen carry trade, markets are concerned about spillover risks. However, since this coincides with the Fed’s pause in rate cuts, the impact is expected to be less severe than the 2022 year-end “carry trade plunge.”In the US, the Fed officially ended balance sheet reduction on Monday, signaling a key shift in liquidity direction. Markets widely expect the next FOMC to announce a Reserve Management Purchase (RMP) program, potentially starting $35B/month of short-term bond purchases from January, indicating a policy shift from “draining” to “injec

Big-Tech’s PerformanceMacro Headlines This Week:Core inflation re-accelerated but with nuanceUS October core PCE rose 2.8% y/y – still above the Fed’s 2% target – yet the month-on-month pace eased. Services inflation, driven partly by surging portfolio-management fees tied to earlier equity gains, was the key driver.Fed policy path remains the biggest wildcardThe US economy shows resilience alongside hidden cracks. Markets are increasingly focused on the $6.7 tn of Treasuries maturing in 2025–2026 (≈25% of the outstanding marketable debt). Combined with potential expansionary fiscal policy under a second Trump administration, deficit concerns are rising. CICC estimates suggest meaningful deficit reduction will be difficult in a “Trump 2.0” scenario. Any shift in Treasury issuance mix could

Over the past 48 hours, one of the biggest stories in the entire AI sector has been the explosive move in Google-related assets. $Alphabet(GOOGL)$ / $Alphabet(GOOG)$ shares ripped higher by more than 6% in regular trading and tacked on another ~2% after-hours on reports that Meta is in talks for a massive multi-billion-dollar TPU order. Meanwhile, $NVIDIA(NVDA)$ and $Advanced Micro Devices(AMD)$ barely budged — a stark contrast to what we usually see when AI hype hits.This isn’t being driven by a single headline. It’s the culmination of several developments that are forcing the market to completely re-price the cost stru

The memory sector's performance last week continued to polarize the market: bulls firmly believe HBM is ushering in a new profit cycle, while skeptics argue spot price gains for DRAM/NAND have clearly deviated from fundamentals, resembling the bubble phase seen in 2017–18.I lean toward the opposite of the latter view: Prices are indeed overheated, but the core drivers stem from genuine structural shifts in supply and demand, not speculation.How should I express it?DRAM spot prices rose 5% week-over-week (16Gb DDR4 surged 9% to $37.5), hitting a 25-year high; NAND spot prices climbed even more sharply, with 1Tb/512Gb/256Gb rising 15-22%. Despite thin trading volumes, supply shortages drove up inventory replenishment demand. NVIDIA's Oct-Q revenue reached $5.7 billion (Data Center: $5.1 bill

Big-Tech’s PerformanceMacro Headlines This Week:A flood of delayed economic data finally hit the markets, while clear divisions emerged inside the Fed on whether to cut rates again in December. Confidence in a "soft landing" took a hit, and US stocks swung wildly. The early "Trump trade" euphoria gave way to sober reality: the end of the government shutdown unleashed the data backlog, but the numbers were soft + Fed hawkishness escalated, completely shattering the near-certainty of a December rate cut.The Fed's policy path is now the biggest source of uncertainty. The minutes from the October FOMC meeting (released Nov 19-20) revealed obvious splits on a December move. The delayed September jobs report (finally out on Nov 20) showed weaker-than-expected payroll growth, with the unemploymen

$Bank of America(BAC)$ The latest Global Storage Technology Report indicates that starting in the second half of 2025, the storage industry will formally exit its previous adjustment cycle and enter a recovery phase characterized by structural differentiation. The NAND market will be the first to enter a mid-to-upward cycle, while DRAM will see robust growth driven by high-bandwidth memory (HBM), though average selling price (ASP) increases will be limited. Meanwhile, small-cap Korean semiconductor equipment and materials stocks face multiple growth pressures. Currently, the industry's core growth momentum has shifted from traditional storage to HBM. Coupled with the sustained recovery of downstream demand for servers, solid-state drives (SSDs), an

Last week, U.S. stocks once again experienced a rollercoaster ride—the $S&P 500(.SPX)$ fell 2% from its record high in late October, while AI-related stocks saw a sharp pullback (-8%), marking their largest correction since Q1 this year. Investors were on a rollercoaster ride, fixated on $NVIDIA(NVDA)$ (earnings on November 19) and a host of consumer giants ($Home Depot (HD)$, LOW, TJX, $Target (TGT)$, $Wal-Mart(WMT)$ , ROST, WSM), torn between worries over AI investment trajectories and concerns about the health of American consumers' wallets.This earnings season, discussions about A

Big-Tech’s PerformanceMacro Headlines This Week:The dominant U.S. macro theme remains the ongoing government shutdown (now in its third week), with impacts broadening further: from disruptions to public services and data releases, to interference in financial regulation and administrative functions, creating systemic shocks to economic expectations. Layoff data has deteriorated sharply—October's job cuts reached 153,074, the highest for any month since 2003, underscoring corporate caution on future demand.With data gaps widening, the Federal Reserve is adopting an even more cautious policy stance. Hawkish comments from officials have dampened rate-cut expectations, emphasizing that in an environment of incomplete data, policy must proceed "slower and more cautiously." Ahead of the December