To The Moon

I. Performance and Valuation of Global Equity Indices

Data Source: Bloomberg, compiled by Tiger Brokers

II. Key Market Themes

i. U.S. Economic Data Released Intensively: Is the Fed "All in Control"?

• Last week, the U.S. released its November manufacturing and services PMI. Unlike the past few months, manufacturing PMI saw a significant improvement over previous readings and exceeded market expectations, though it remained below the neutral 50 threshold. In contrast, services PMI sharply declined, falling below expectations but stayed above the 50 line. In other words, manufacturing is warming up, though not sufficiently, while services are weakening, but not alarmingly so.

• Additionally, November employment data was released last Friday. Non-farm payroll additions, based on corporate surveys, slightly exceeded expectations. However, the unemployment rate from household surveys was less optimistic, recorded at 4.246%, nearing July's high. On the other hand, wage growth and the consumer confidence index remained robust, both beating expectations.

• Overall, this economic data can be summarized as “strong, with slight signs of cooling,” still within the Federal Reserve's expectations. Last week, Powell stated in a public speech that while downside risks are lower than anticipated, the Fed can remain patient and cautiously approach a neutral rate. Therefore, we maintain our previous assessment: a rate cut in December remains highly probable. Unless a major “black swan” event occurs, the pace of rate cuts next year is likely to slow significantly.

Data Source: tradingeconomics, complied by Tiger Brokers

ii. Google's Large Model Sparks Imagination; OpenAI and Tesla Race to Release New Products; AI Wave in Full Swing!

• Recently, Google’s $谷歌(GOOG)$ DeepMind team outpaced Sora by launching its video generation model Genie2. Based on DiT technology, this world model allows users to execute game-like control through input commands. According to the presentation, it excels in command interpretation, physical collision, and light reflection, delivering stunning performance.

• Currently, a major challenge facing mainstream large language models (LLMs) is the near-exhaustion of training data. However, considering the vast data carried by video games and their ability to generate new pre-training data through interactions, we are highly optimistic about the development of Genie-like world models following Scaling Laws. Furthermore, Genie, as a world model, has immense potential for tasks such as conducting physical experiments or training robots in virtual worlds.

Data Source: Google Event, Public Information

• At the same time, OpenAI announced a 12-day-long product launch event. Speculation suggests it will unveil the o1 official version, the video generation model Sora, and agent tools. Currently, the o1 official version has been released, accompanied by a premium Pro membership tier priced at $200 per month. This indicates that training inference models to solve logical problems is incredibly compute-intensive.

• Additionally, Tesla $特斯拉(TSLA)$ recently launched version 13 of its autonomous driving system, FSD. Compared to version 12.5, the new iteration is more human-like, enabling point-to-point autonomous driving. From a model perspective, it features larger datasets, clearer inputs, and more complex structures, raising expectations that smart driving will also follow Scaling Laws.

  Overall, the AI field remains vibrant. Major players are actively advancing technological iterations, and there is no need to worry about innovation reaching its peak.

Data Source: Tiger Brokers

Disclaimer

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