Weekend market hot news interpretation

$SentinelOne(S.US)hanghai Composite Index sh000001$ A-shares finally rose yesterday, with a sharp surge at the close. The market players went all out for this bullish candlestick. After all, if it rises on Friday, the cost-performance ratio is really high—a single day of gains can keep people happy for three days, and everyone feels more confident about spending over the weekend. Hahaha.

Although the index looks good, the profit-making effect isn’t great, with half of the individual stocks falling. The main drag is micro-cap stocks, which have performed poorly recently due to the crackdown on quantitative investing. Everyone should be cautious about this!

In my view, quantitative trading is just a tool—it’s neither good nor bad in itself. But in the A-share market, it’s become somewhat unbalanced and has instead turned into a weapon for repeatedly harvesting retail investors. Take this year’s data: many quantitative institutions have returns above 40%, but retail investors? Let’s not talk about that.

In this era of quantitative trading, if you’re always chasing rallies and selling on dips, relying solely on rumors or unverified gossip to trade stocks, you’ll definitely lose out to quant funds in the long run. But if you focus on value investing, trend investing, or simply “play dead,” quant funds will have a hard time harvesting you!

Actually, the biggest advantage retail investors have is endurance—the ability to stay calm. If you can survive three bull and bear cycles, even if you don’t become a master, you’ll definitely be a seasoned investor! At that level, it’s much harder to lose money in the A-share market.

Now, let’s look at some hot topics from the weekend:

1. U.S. Stocks
The Dow Jones hit another all-time high—it’s really impressive. The Nasdaq hasn’t performed well recently, but the Dow is strong, setting another record high at 48,886.86. Could this be the legendary “double top”?

Last night, the Nasdaq fell 1%, with stocks like Broadcom and Micron Technology plunging. Meta, Google, and Microsoft also dropped sharply—these AI leaders had risen too much before. But Apple and Tesla held up relatively well.

Recently, U.S. tech stocks have been adjusting, while the ChiNext in China has outperformed the Shanghai Composite, and tech growth sectors have been stronger than traditional heavyweights. What does this mean? It shows that domestic industries like semiconductors and AI chips are catching up with the U.S.

Chinese concept stocks and A50 were doing well earlier, but by evening, they followed U.S. stocks down. Fortunately, the drop wasn’t too big, so the market impact is minimal. Everyone can relax and enjoy the weekend.

2. The Central Bank
The central bank announced it will conduct a 600 billion yuan outright reverse repo operation on December 15. After the market closed, the central bank stepped in again to support the market—another positive signal. On December 5, it conducted a 1 trillion yuan reverse repo, so the total liquidity injection over these two operations is 1.6 trillion yuan!

This month, 1.4 trillion yuan in funds will mature, meaning a net injection of 200 billion yuan. This is smaller than in previous months, but don’t worry—the central bank is mainly using outright reverse repos, medium-term lending facilities (MLF), and government bonds to inject liquidity. There will likely be more moves before the end of the month.

At the same time, Governor Pan stated that the central bank will continue to implement appropriately accommodative monetary policies to create a favorable monetary and financial environment for stable economic growth and financial market operations. By specifically mentioning financial markets, this is undoubtedly another confidence boost for A-shares.

3. Moore Threads
Moore Threads plans to use no more than 7.5 billion yuan of idle raised funds for cash management. The company raised 7.57 billion yuan in its IPO—almost all of it is being used for wealth management. It’s unclear whether relying solely on interest income can turn losses into profits next year.

Domestic companies seem to have this tradition: raise funds through an IPO, use the money for wealth management, then pump the stock price before raising more funds or reducing holdings. Of course, if IPO funds aren’t immediately needed, using them for wealth management to earn some interest can be seen as benefiting shareholders. Yesterday, this move was heavily criticized online, and the company quickly issued a risk warning. The stock’s performance was volatile—it nearly hit the daily limit down at one point, falling almost 20%, then almost rebounded to positive territory before closing down 13%. But according to post-market data, four quant seats bought 532 million yuan worth of shares, while three quant seats sold 794 million yuan. Wow, it’s all quant funds playing around! The upside of quant trading is that it can pump stock prices, but the downside is the extreme volatility—one wrong move can wipe you out.

4. Nvidia
Nvidia will hold a meeting on the “power shortage” issue. Because of this “power shortage conference,” the power grid equipment sector in A-shares surged yesterday, with over 20 companies hitting the daily limit up! It seems the ultimate bottleneck for AI is indeed power—this also highlights the critical role of energy in the AI race.

Currently, North American data centers mainly use three power supply methods: integrated solar storage, gas turbines, and solid oxide fuel cells (SOFC).

Power supply is likely to be the biggest bottleneck of the AI era! In the future, the key to building the next wave of data centers may not be faster chips but more innovative power financing solutions. Let’s see what Nvidia proposes this time.