Breakfast | U.S. retail data disappoints, three major indexes mixed

Market Overview Concerns about AI reignite ahead of the blockbuster employment report, with the S&P and Nasdaq retreating, but the Dow Jones hitting new highs for three consecutive days; new AI tools raise industry outlook worries, wealth management stocks plummet, with Charles Schwab down over 7%; among the "Tech Giants," Tesla rises nearly 2% alone, while Google falls nearly 2% leading the decline; storage chip stocks significantly retreat, SanDisk drops over 7%. The pan-European stock index temporarily departs from record highs, with the insurance sector leading the decline down nearly 2%, but Kering rises 11% as fourth-quarter sales decline is less severe than expected. U.S. retail data disappoints, accelerating the rise in U.S. Treasury prices and expanding the decline in yields, with the 10-year U.S. Treasury yield hitting a nearly one-month low, and the dollar index widening its intraday decline, reaching a new low in over a week. The yen rises over 1% for two consecutive days; offshore yuan hits a nearly three-year high, breaking 6.91 intraday for the first time in nearly three years; Bitcoin dips below $68,000, nearly 4% down from its daily high. Gold, silver, copper, and crude oil halt two consecutive days of gains: spot gold briefly falls over 1%, dropping below $5,000, while silver futures drop over 3% before briefly turning up after U.S. retail sales data; crude oil once falls over 1%. In the Asian session, the Shanghai Composite Index fluctuates to close up for six consecutive days, with a surge in AI applications, while space photovoltaics collectively adjust, and the Hang Seng Index rises 0.5%, with Zhizhu surging nearly 15%. Key News China The People's Bank of China's fourth-quarter monetary policy execution report: Continue to implement a moderately loose monetary policy and regularly conduct government bond buying and selling operations; adjustments in residents' asset allocation do not imply significant changes in liquidity; prices show positive marginal changes, and coordination between monetary and fiscal policies will continue to strengthen. Li Qiang: Reasonably develop rare earth resources. ByteDance launches new model Seedream 5.0 Preview, benchmarking against Google's Nano Banana Pro. Alibaba releases RynnBrain robot large model, enabling robots to have a "thinking brain," outperforming Google and NVIDIA in assessments. The AI spending boom continues, with TSMC's January sales soaring 36.8% year-on-year. SMIC's Q4 net profit is 1.22 billion yuan, a 23.2% increase year-on-year, with capital expenditure expected to remain flat in 2026 compared to 2025. "Black Myth: Zhong Kui" suddenly releases a gameplay short film, trending on social media, with over 2.2 million views within two hours and 120,000 viewers. Overseas U.S. retail sales in December unexpectedly stagnate month-on-month, with weak consumption at the end of the holiday season; the 10-year U.S. Treasury yield hits a nearly one-month low, and the dollar index reaches a new intraday low in over a week. Trump is expected to hold the second round of talks with Iran next week, stating that "Iran will not have nuclear weapons or missiles"; if U.S.-Iran negotiations fail, a carrier strike group may be sent back to the Middle East AI panic "infection": Altruist's new tool scares wealth management stocks, Charles Schwab fell over 9% during trading. Alphabet's century-old pound bond subscription multiple exceeds 7 times, raising nearly $32 billion in debt across multiple markets, and issuing Swiss franc bonds for the first time. Musk x AI loses another key player, co-founder Wu Yuhua announced his departure. Market Report US and European stock markets: The S&P 500 fell 0.33%, closing at 6941.81 points; the Dow Jones rose 0.10%, closing at 50188.14 points; the Nasdaq fell 0.59%, closing at 23102.474 points. The European STOXX 600 index fell 0.07%, closing at 620.97 points. A-shares: The Shanghai Composite Index rose 0.13%, closing at 4128.37 points. The Shenzhen Component Index closed up 0.02%, at 14210.63 points. The ChiNext Index closed down 0.37%, at 3320.54 points. Bond market: By the end of the bond market, the yield on the US ten-year Treasury bond was about 4.14%, down about 6 basis points during the day; the yield on the two-year US Treasury bond was about 3.45%, down about 4 basis points during the day. Commodities: WTI March crude oil futures fell 0.62%, closing at $63.96 per barrel. Brent April crude oil futures fell 0.35%, closing at $68.80 per barrel. COMEX April gold futures fell 0.95%, closing at $5031 per ounce. COMEX March silver futures fell 2.25%, closing at $80.384 per ounce. LME copper futures fell about 0.5%, closing at $13108 per ton. LME aluminum futures fell about 1%, closing at $3093 per ton. LME nickel futures rose about 0.8%, closing at $17490 per ton, marking three consecutive increases. News Details Global Highlights China People's Bank of China Fourth Quarter Monetary Policy Implementation Report: Continue to implement a moderately loose monetary policy, and regularly conduct government bond trading operations. The report pointed out that the People's Bank of China implements a moderately loose monetary policy, and based on the effective execution of existing monetary policies, has launched a package of monetary and financial policy combinations to strengthen counter-cyclical adjustments, effectively supporting stable growth of the real economy and smooth operation of financial markets. In the future, the People's Bank of China will regularly conduct government bond trading operations, paying attention to changes in long-term yields and flexibly grasping the scale of operations Central Bank Monetary Policy Report Column: Adjustment of Resident Asset Allocation Does Not Mean Significant Changes in Liquidity. The People's Bank of China pointed out that as China's financial market continues to deepen, direct financing is accelerating, and financing channels are becoming more diversified. The allocation and selection of residents' savings assets between bank deposits and asset management products will become more diverse, which will more directly affect the structure of bank liabilities, but does not directly equate to significant changes in the liquidity status of the entire financial system and the real economy. Latest Signal from the People's Bank of China: Prices Show Positive Marginal Changes, Will Continue to Strengthen Coordination Between Monetary and Fiscal Policies. The column pointed out that monetary policy and fiscal policy mainly strengthen coordination through three models. First, the People's Bank of China maintains ample market liquidity through open market operations to support the smooth and efficient issuance of government bonds. Second, through the "re-lending + fiscal interest subsidies" method, it collaborates from both the supply and demand sides of the credit market to optimize the allocation of financial resources. Third, through guarantees and other credit enhancement methods, it jointly shares the risk costs of loans and bonds, enhances the risk appetite of financial institutions, and increases financing support for enterprises. Li Qiang: We Must Reasonably Develop Rare Earth Resources. According to Xinhua News Agency, Li Qiang pointed out that we must reasonably develop rare earth resources, strengthen overall planning, optimize industrial layout, improve recycling systems, and enhance the level of conservation and intensive use. We must prioritize ecological protection, improve the green standard system for all production and processing links, and promote green development throughout the entire cycle. Li Qiang emphasized the need to focus on basic research and applied research, actively promote breakthroughs in key core technologies, and strive to create a high ground for rare earth technological innovation. We should promote deep integration of production, education, research, and application, expand the application of rare earth technology in new energy, new materials, and other fields, and promote coordinated interaction and smooth circulation across the entire industrial chain, continuously improving the quality and efficiency of rare earth industry development. ByteDance's New Model: Seedream 5.0 Preview Launched, Competing with Google's Nano Banana Pro. ByteDance's image model Seedream 5.0 Preview has been launched, supporting 2K/4K resolution and retrieval of original images, enhancing prompt understanding and detail generation. The new model is more stable in abstract semantic processing and multi-step image-text generation. This iteration focuses on practicality, strengthening online knowledge, local editing, and intelligent reasoning, showing that the industry is shifting from visual stunningness to deepening applications. However, users' perception of minor version upgrades is gradually weakening, and bottlenecks such as complex logical composition and text rendering still exist. Alibaba Releases RynnBrain Robot Large Model, Giving Robots a "Thinking Brain", Evaluation Surpassing Google and NVIDIA! Alibaba released the robot AI foundational model RynnBrain, which set records in 16 embodied intelligence assessments, outperforming mainstream models such as those from Google and NVIDIA. RynnBrain integrates spatiotemporal memory and reasoning capabilities, enabling robots to achieve autonomous task planning and continuous execution of multiple tasks in complex scenarios. The AI spending boom continues, TSMC's January sales surged 36.8% year-on-year. TSMC's January sales reached NT$401.26 billion, a year-on-year increase of 36.8%, and a month-on-month increase of 19.8% compared to December 2025, exceeding TSMC's expected annual growth rate of 30%, indicating that global artificial intelligence spending remains strong. SMIC reported a net profit of 1.22 billion yuan in the fourth quarter, a 23.2% increase year-on-year, with 2026 capital expenditures expected to remain flat compared to 2025. SMIC achieved operating revenue of 17.813 billion yuan in the fourth quarter of 2025, a year-on-year increase of 11.9%; net profit attributable to shareholders was 1.223 billion yuan, a year-on-year increase of 23.2%, with non-recurring net profit significantly increasing by 112.4% year-on-year. The total revenue for the year was 67.323 billion yuan, a year-on-year increase of 16.5%, with a gross margin rising to 21.0%. The company expects first-quarter revenue in 2026 to remain flat quarter-on-quarter, with annual revenue growth targets above the industry average, and annual capital expenditure plans to be roughly the same as the $8.1 billion in 2025. "Black Myth: Zhong Kui" suddenly released a gameplay short film: Trending, 120,000 people watched a pot of food. Game Science released a New Year gameplay short film for "Black Myth: Zhong Kui," quickly topping the trending lists on Bilibili and Weibo. The video showcases detailed cooking processes and a bizarre fairy tale worldview, highlighting the physics engine and material feedback details. Within two hours of its release, the view count exceeded 2.2 million, with over 120,000 people watching simultaneously. Producer Feng Ji stated that the work aims to blend surprise and the bizarre, continuing the team's promotional rhythm of "creating excitement every year." This short film further ignited market expectations for new works in the "Black Myth" series, showcasing its potential to become another high-potential single-player blockbuster. Overseas U.S. December retail sales unexpectedly stagnated month-on-month, holiday season consumption weakens. U.S. retail sales in December did not meet the month-on-month growth of 0.6% in November and fell short of Wall Street's expectation of a 0.4% month-on-month increase. Holiday consumption momentum was weak and uneven. Among 13 retail categories, 8 experienced declines, with spending particularly weak among low-income groups. Although high-income households were supported by asset appreciation, overall consumption was suppressed by high prices and weather factors Trump: If US-Iran negotiations fail, may send another aircraft carrier strike group to the Middle East, Iran will not have nuclear weapons or missiles. Trump is expected to hold the second round of talks with Iran next week. AI panic "infects": Altruist's new tool scares wealth management stocks, Charles Schwab drops over 9% during trading. Altruist launched an AI tool for tax strategy formulation on Tuesday, directly targeting the core business of traditional wealth management firms. Insurance brokerage stocks experienced a similar sharp decline on Monday after Insurify launched a new tool, with the S&P 500 Insurance Index falling nearly 4%, marking the largest drop since October last year. Last week, a tool released by Anthropic triggered a sell-off in software stocks, with Thomson Reuters experiencing a historic first weekly drop of 20%. Alphabet's century bond subscription multiple exceeds 7 times, raising nearly $32 billion in debt across multiple markets, marking the debut of Swiss franc bonds. Google's parent company Alphabet issued a century bond for the first time, receiving over 7 times oversubscription, setting a precedent for tech companies issuing ultra-long-term bonds since the dot-com bubble era. This issuance is part of the company's multi-currency financing plan to support AI capability building, reflecting the growing capital demand among tech giants in the AI race. Despite significant long-term uncertainties in the industry, the strong subscription still demonstrates market confidence in its financial strength and long-term prospects. Musk's xAI loses another key member, co-founder Wu Yuhua announces departure. Previously, other co-founders such as Igor Babuschkin, Kyle Kosic, and Christian Szegedy have also left. Greg Yang announced last month that he would step down from his company position to focus on fighting Lyme disease. Musk's trillion-dollar gamble: sending AI data centers to space, is it a genius idea or a sci-fi bubble? As Musk attempts to merge SpaceX with xAI and proclaims "achieving space AI computing power within 3 years," Wall Street and Silicon Valley are once again buzzing. Deutsche Bank predicts that by 2030, the cost of space computing power will match that on the ground, but physicists and engineers are watching with skepticism: space is not a summer resort, but a "thermodynamic prison." Selected Opinions Dalio's latest in-depth interview: the US is on the brink of order collapse and civil war, gold is the only safe haven ark Bridgewater's Ray Dalio issues a heavy warning: the United States is deeply entrenched in the "fifth stage," on the brink of order collapse and civil war. Amid debt imbalances and political polarization, gold has become the only "non-debt" safe haven, accounting for 5%-15% of investment portfolios. Dalio suggests responding to fiat currency depreciation and the impending turbulent cycle through diversified allocation and choosing stable living locations. China's AI War: The "Hundred Model Battle" has ended, with the largest profit pool belonging to major firms. How will Zhipu and MiniMax break through? The "Hundred Model Battle" in China's AI industry is coming to a close, with the real players reduced to 10 companies. The most striking conclusion is that the largest profit pool will belong to major firms like Tencent and Alibaba that control distribution, rather than model companies. Among independent vendors, Zhipu maintains a 59% high gross margin through localized deployment, while MiniMax breaks through with 73% overseas revenue and all-modal products. When models are no longer scarce, monetization becomes key. Is the Spring Festival AI War just a facade? JP Morgan: Token consumption will enter a high growth period, potentially increasing 370 times in five years! JP Morgan points out that behind the Spring Festival AI promotion war is the user habit shift towards chatbots, driving long-term high growth in Token consumption. It predicts that the compound annual growth rate of Token consumption in China will reach 330%. Investment focus should be on "second-tier winners": AI infrastructure providers and companies related to advertising that directly benefit. Anthropic's latest 2026 trend report: The largest programming revolution in human history is unstoppable. Anthropic's report indicates that programming is undergoing the largest revolution in history: shifting from "writing code" to "commanding a legion of intelligent agents." AI can now autonomously complete long-term, complex system development, allowing non-technical personnel to directly build applications. This means the collapse of development barriers and process restructuring, with the role of engineers evolving into architects and intelligent agent orchestrators. This requires companies to master multi-agent coordination and security embedding to cope with the new era of "everyone can develop." Domestic Macro Ministry of Industry and Information Technology and 5 other departments: Strengthen the integration and innovation of low-altitude equipment and low-altitude information communication, and equipment research and development. Actively promote the development of the 5G-A industry, further upgrade and improve the functionality of existing ground station facilities, accelerate the maturity of technologies such as sensing integration, and gradually reduce equipment costs. Strengthen the integration and innovation of low-altitude equipment and low-altitude information communication, and advance the adaptation verification of 5G/5G RedCap modules with low-altitude aircraft. Explore the research and development of integrated modules for low-altitude communication, navigation, and surveillance functions, accelerating the maturity of technology and industry Domestic Companies The European Commission accepts Volkswagen's price commitment for pure electric vehicles produced in China. On February 10, the European Commission announced that it accepted Volkswagen's price commitment regarding the export of pure electric vehicles. According to this decision, Volkswagen (Anhui) Co., Ltd. can export its CUPRA Tavascan model to the EU at its proposed minimum import price or higher, and will be exempt from the previously imposed anti-subsidy tax on pure electric vehicles imported from China. Ge Weidong and Fang Wenyuan "appear together" to each invest 1 billion yuan in Jianghuai Automobile's private placement. Well-known investor Ge Weidong and "big player" Zhang Jianping's wife Fang Wenyuan rarely acted simultaneously, each participating with 1 billion yuan in Jianghuai Automobile's private placement, receiving 20.0481 million shares. The private placement price is about 24% higher than the bottom price, indicating strong institutional subscription enthusiasm. Previously, the couple Zhang Jianping had exited from the top ten shareholders of Jianghuai Automobile, and Fang Wenyuan's return may indicate renewed optimism. Ge Weidong's side has been continuously laying out through related parties, and this collaboration with leading speculative funds in the private placement highlights their long-term attention to Jianghuai Automobile. Overseas Macro Federal Reserve: U.S. consumer debt default rate surges to the highest level in nearly a decade. A report released by the New York Fed shows that in the fourth quarter of last year, the proportion of overdue household debt in the U.S. rose to 4.8%, the highest level since 2017, primarily driven by rising default rates among low-income groups and young borrowers. The increase in defaults is mainly driven by overdue mortgage loans. Ending "buying the dip"! Walsh's nomination means a significant increase in the threshold for Federal Reserve market intervention? Citadel Securities believes that Walsh's nomination means that the threshold for Federal Reserve market intervention will be significantly raised. He advocates for strict limitations on the expansion of the central bank's balance sheet, allowing liquidity support only as an exceptional measure in crisis response, which directly undermines the "Federal Reserve put option" that the market has long relied on. This could be an extremely dangerous signal for market participants accustomed to "buying the dip" in the context of rising leverage and record U.S. Treasury supply. European Parliament votes in favor of launching a digital euro with both online and offline functions. The European Parliament voted to support the simultaneous launch of a digital euro in both online and offline forms, overturning a previous proposal limited to offline only, aligning with the European Central Bank's position. This move aims to reduce dependence on payment companies like Visa, maintain the monetary sovereignty of the EU, and plans to launch a pilot in 2027 and officially introduce it in 2029. The Parliament emphasized that if the digital payment system is dominated by non-EU entities, it will bring new sovereignty risks The project still needs to wait for the final approval of the EU legal framework. Overseas Companies "Gas turbine giant" GE Vernova stuck in "AI power supply bottleneck," stock price hits new high, up over 500% since early 2024. The AI data center has ignited electricity demand, and GE Vernova's gas turbine production capacity is in crisis, triggering a "booking war." Customers need to pay a non-refundable deposit in advance for delivery in 2030, highlighting the seller's strong position with "reserve first, negotiate later." The company's stock price has soared over 500% since the split, and Wall Street has doubled its 2030 profit expectations to $17 billion, as the energy equipment giant enters a rare boom cycle. McKinsey's $20 billion business changes hands, LPL Financial takes over MIO alternative investments. This transaction marks a significant expansion for LPL Financial and reportedly concludes McKinsey's nearly year-long strategic review of MIO. The deal does not include MIO's $6 billion passive index fund investments. MIO manages wealth for McKinsey partners and was previously scrutinized due to potential conflicts of interest with McKinsey consulting. LPL Financial stated it may consider opening MIO's core strategies to new clients in the future. Paramount still not giving up, improves hostile takeover proposal, promises to pay Warner $2.8 billion breakup fee. Paramount has improved its hostile takeover proposal for Warner Bros, promising to cover the $2.8 billion termination fee for Netflix, $1.5 billion in debt refinancing guarantees, and set a quarterly "late fee" of $0.25 per share. However, the base offer of $30 per share remains unchanged, and analysts believe that unless the price is raised to over $32, it will be difficult to impress the Warner Bros board. Kering Group's European stock surges 14%, core brand Gucci sales exceed expectations, company hopes for recovery by 2026. Kering Group, the parent company of Gucci, saw its Q4 sales decline narrow to 3%, exceeding market expectations and causing the stock price to soar 14%, marking the largest increase in three years. Although the new CEO's debut stabilized the situation, Gucci's continuous decline for ten consecutive quarters, halved profit margins, and deteriorating cash flow remain looming threats. The road to transformation is long and arduous, and a true performance recovery may not come until 2026. BodyArmor impairment drags down Coca-Cola's Q4 GAAP operating profit, down 32% year-on-year, full-year guidance below expectations. Affected by a non-cash impairment charge of up to $960 million for its acquired sports drink brand BodyArmor, Coca-Cola's Q4 GAAP operating profit fell 32% year-on-year. Coca-Cola expects organic sales growth for the full year 2026 to be between 4% and 5%, with the lower end of this guidance range below Wall Street's average expectation of 5.01% After several years of growth driven by price increases, investors are concerned that the growth engine of this consumer giant is slowing down as consumers become more sensitive to prices. Today's News Preview China's January CPI and PPI. Semiconductor Manufacturing International Corporation (SMIC) will hold a performance briefing for the fourth quarter of 2025. Lead Intelligent's Hong Kong IPO is expected to begin trading on February 11. OPEC will release its monthly crude oil market report. U.S. EIA crude oil inventory changes from last week. U.S. January Non-Farm Payroll Report. U.S. January government budget. The U.S. Chairman of the Joint Chiefs of Staff will hold a "rare" meeting, gathering military officials from 34 countries.