Preview of US Stock Market | Three major stock index futures all fell, Trump nominated Wosh to take the helm of the Federal Reserve, and gold and silver both experienced a "high-altitude dive."

Pre-market market trends 1. Prior to the US stock market on January 30 (Friday), the futures of the three major US stock indexes fell. As of the time of writing, the Dow Jones futures fell 0.32%, the S&P 500 index futures fell 0.37%, and the Nasdaq futures fell 0.49%. 2. As of the time of writing, the DAX index in Germany rose by 1.04%, the FTSE 100 index in the UK rose by 0.45%, the CAC40 index in France rose by 0.76%, and the EuroStoxx 50 index rose by 1.04%. 3. As of the time of writing, WTI crude oil fell by 0.61% to $65.02 per barrel. Brent crude oil fell by 0.73% to $69.08 per barrel. Market News - Trump nominates Wall to helm the Federal Reserve, but congressional gridlock may stall the nomination. Trump announced on his Truth Social platform that he intends to nominate Kevin Wall as the next Chairman of the Federal Reserve. However, Wall's nomination may face some hurdles. The Department of Justice is currently investigating a renovation project at the Fed in 2025 and has issued subpoenas. Some Republican lawmakers have made it clear that they will block any Fed nominations until the legal issues are resolved. In addition, the financial markets seem to unanimously agree that this long-term hawkish candidate will be more hawkish than other candidates and current Chairman Powell, and he is likely to adopt a unique policy combination of "shrinking the balance sheet + cutting interest rates" that is not conducive to the liquidity expansion of the stock and bond markets. Analysts say that if Wall becomes the next Fed Chairman, "the Fed may become more hawkish, and people may see fewer interest rate cuts." As of the time of writing, the US dollar index and US bond yields are up, while the futures of the three major US stock indexes, precious metals and industrial metals, and international oil prices are all down. - Gold and silver "high platform diving"! Gold and silver, which have been rising continuously and reaching new highs recently, experienced a sharp decline on Friday. As of the time of writing, spot gold fell by over 5% to $5099 per troy ounce, briefly breaking below $5000 per troy ounce; spot silver fell by over 12% to $101.4 per troy ounce, briefly falling below $95 per troy ounce. Precious metals, after repeatedly hitting new highs recently, turned sharply downwards, causing investors to question whether this round of gains is nearing its end. Another sign exacerbating investors' concerns is that Asian investors are pouring record amounts of money into gold exchange-traded funds (ETFs). Christopher Wong, a strategist at Oversea-Chinese Banking Corporation, said that the movement of gold and silver "confirms the warning story of 'excessive rise and fall'." He pointed out that although the news of Wall's nomination is a triggering factor, a correction was inevitable, "like the kind of reason the market has been waiting for for a correction, to end the parabolic rise before." - Trump reaches temporary agreement with Democrats, averting government shutdown crisis. US President Trump has reached a temporary agreement with Senate Democrats to avoid a chaotic government shutdown. The White House is continuing negotiations with the Democrats aimed at implementing new restrictions on the immigration sweep that sparked national protests. Trump announced the agreement and urged both parties to vote in support. The House of Representatives has passed a massive spending bill last week and then left Washington. Any changes to the bill will require another vote in the House. However, the House is adjourned and may not return until next Monday, which will result in a brief government shutdown, but may have limited actual impact on government operations. - Overbought warning signals sound: Bank of America says global stock markets have hit the sell signal threshold. Strategists at Bank of America Corp point out that global stock markets are flashing overbought warning signals, with the level of moving averages reaching the threshold that historically indicates a sell signal for risk assets. A team of strategists led by Michael Hartnett wrote in a report that as of the week ending January 28, about 89% of the MSCI stock index trading prices were above their 50-day and 200-day moving averages. This data has surpassed the critical point of 88% considered by the bank as a sell signal. Bank of America strategists said that this overbought market positioning comes as investors withdrew $15.4 billion from stock funds during the week, highlighting a brewing caution in the markets during the market's rally. Hartnett pointed out that Bank of America's Bull & Bear indicator still shows extreme bullish sentiment, as solid global stock performance and steady credit market performance have so far offset the impact of outflows from the stock market. - "New Bond King" Gundlach is bearish on the US, focusing on three major investment strategies! Jeff Gundlach, a renowned fixed income investor known as the "New Bond King," said that staying away from the US market is a core theme of his latest investment strategy. He pointed out that two major risks are dominating his macro outlook and are key reasons for his bearish view on the US market: high inflation and a weakening US dollar. Recommending investing in non-US equities as a top priority strategy, with a focus on emerging markets as a key sector. He advised investors to allocate 30% to 40% of their portfolio funds to overseas stocks and completely avoid US stocks. He stated that he still remains bullish on bonds in the long term, especially short-term bonds, but has a bearish outlook on long-term bonds. He also noted that with the US dollar no longer serving as a safe haven asset, precious metals such as gold and silver have become preferred safe haven assets for investors, and commodities also have strategic value. Stock news - Apple Inc. (AAPL.US) Q1 earnings exceed expectations: iPhone's strongest quarter in history drives revenue to record highs, with strong rebound in sales in Greater China by 38% year-on-year. The financial report for the first quarter ending December 27, 2025, shows that Apple Inc.'s total revenue reached a record $143.8 billion, a 16% year-on-year increase, well above the average analyst expectation of $138.4 billion and higher than the company's previous guidance of 10%-12% growth. Earnings per share were $2.84, also surpassing market expectations of $2.68. iPhone business, as the core revenue pillar of Apple Inc., saw explosive growth this quarter, with revenue reaching $85.3 billion, a 23% year-on-year increase, far exceeding analysts' expectations of $78.2 billion and achieving the best quarterly performance in history. Greater China emerged as the highlight of this financial report, with revenue in the region reaching $25.5 billion, a 38% year-on-year increase, well above the market's expectation of $21.8 billion. In addition to the iPhone, Apple Inc.'s services business (including Apple Music, iCloud, App Store, etc.) continued its steady growth trend, with revenue this quarter reaching $30 billion, a 14% year-on-year increase, hitting a new high and essentially meeting the market's expectation of $30.7 billion. For future performance, Apple Inc. has given an outlook that exceeds expectations, expecting revenue in the second quarter of fiscal year 2026 to achieve a year-on-year growth of 13%-16%, significantly higher than Wall Street's expectation of 10%. - Apple Inc.: Siri to be more personalized this year, storage prices to increase + 3nm capacity shortage to pressure Q2 gross margin. Apple Inc. CEO Cook announced during the earnings call that Apple Inc. is partnering with Alphabet Inc. Class C to develop the next generation Apple base model, which will power the more personalized Siri to be launched this year. This collaboration marks a major shift in Apple Inc.'s AI strategy. Chief Financial Officer Kevan Parekh pointed out that due to demand far exceeding expectations, the iPhone is currently in a severe supply-constrained state, with expectations that this will continue into the next quarter. Cook explained that the bottleneck mainly comes from the insufficient capacity of the 3nm advanced process node for producing the latest SoC chips. Additionally, management also warned of a substantial increase in storage chip prices. Although the impact on Q1 gross margin in fiscal year 2026 is limited, it is expected to have some impact on Q2. However, thanks to the increase in the proportion of high-end models and economies of scale, Apple Inc. has still provided a strong Q2 gross margin guidance (48%-49%). - Insatiable AI storage demand! Sandisk (SNDK.US) releases "crushing" performance guidance. The financial report shows that Sandisk's revenue for the second quarter of fiscal year 2026 increased by 61.2% to $3.03 billion, exceeding the market's expectation of $2.69 billion; earnings per share were $5.15, higher than the market's expectation of $3.54. The adjusted gross margin was 51.1%, far surpassing the expected 42%. By business segment, data center revenue surged by 64% to $440 million, edge computing revenue increased by 21% to $1.678 billion, and consumer-grade business grew by 39% to $907 million. Looking ahead, Sandisk expects adjusted earnings per share to be between $12 and $14 in the third quarter, completely overtaking the widespread expectation of $5.11; the company also expects revenue growth to be even stronger, ranging from $4.4 billion to $4.8 billion. As of the time of writing, Sandisk soared over 20% pre-market on Friday. - Feasting on the "AI infrastructure dividend"! Western Digital Corporation (WDC.US) reports explosive profit growth, with net profit soaring 296%. The financial report for the second quarter of fiscal year 2026 ending on January 2, showed that the company's total revenue surged by 25% to $30.2 billion, higher than the analysts' average expectation of around $29.5 billion. Net profit was approximately $1.802 billion, a 296% increase. The adjusted gross margin was 46.1%, higher than the analysts' average expectation of 44.5%; the adjusted earnings per share was $2.13, higher than the analysts' average expectation of around $1.93. The free cash flow was approximately $653 million, also exceeding the analysts' average expectation of $637 million. The company expects adjusted earnings per share for the third fiscal quarter to be between $2.15 and $2.45, far exceeding the analysts' widespread expectation of around $1.99; revenue is projected to be between $31 billion and $33 billion, also higher than the analysts' expectation of around $30 billion. However, as of the time of writing, Western Digital Corporation fell by over 3% pre-market on Friday. - KLA Corporation (KLAC.US) reports "double beating" Q2 results, strong guidance, but concerns arise about valuation risks following AI frenzy. The financial report shows that KLA's revenue for the second quarter of fiscal year 2026 grew by 7.2% to $3.3 billion, beating the market's expectation of $3.26 billion; adjusted earnings per share were $8.85, surpassing the market's expectation of $8.80. This strong performance is largely attributed to the large-scale expansion of AI infrastructure globally. The company's CEO emphasized that KLA's dominant position in semiconductor process control makes it a key beneficiary for semiconductor manufacturers transitioning to more precise process nodes. Looking ahead, the company expects revenue in the third quarter of fiscal year 2026 to be around $3.35 billion, with adjusted earnings per share expected to be around $9.08. However, the stock price fell pre-market, mainly driven by investor concerns about the historically high valuation of KLA and caution about the company's revenue growth slowing for three consecutive quarters. As of the time of writing, KLA fell by 8% pre-market on Friday. - Strong consumer spending during the holidays drives a significant increase in payment volumes! Visa (V.US) reports Q1 earnings that exceed expectations, reaffirming full-year "low double-digit" growth targets. The financial report shows that Visa's adjusted earnings per share for the first quarter of fiscal year 2026 was $3.17, a 15% year-on-year increase, surpassing the average expectation of $3.14; revenue increased by 14.6% to $10.9 billion, also exceeding expectations. Total payment volume processed by Visa in the quarter was $3.87 trillion, exceeding the widespread expectation of $3.83 trillion; total transactions processed increased by 9% to 694 billion, slightly below the expected 697 billion. The credit card network giant reiterated its expectations for "low double-digit" percentage growth in earnings per share, net income, and operating expenses for fiscal year 2026. - Increase in revenue without increase in profit! Nomura Holdings, Inc. Sponsored ADR (NMR.US) reports a 10% year-on-year decrease in net profit for Q3, plans to buy back 60 billion in shares. For the third quarter ending December 31, 2025, the company's net revenue was 551.8 billion, a 10% year-on-year increase; pre-tax profit was 135.2 billion, a 2% year-on-year decrease; net profit was 91.6 billion, a 10% year-on-year decrease. Non-interest expenses in Q3 increased by 15% year-on-year to 416.5 billion; the effective tax rate was 30.1%, higher than the 24.7% in the same period last year and 29.9% in the previous quarter. Additionally, the company announced plans to repurchase 60 billion worth of shares, up to 3.2% of total shares. - Exxon Mobil Corporation (XOM.US) reports Q4 earnings exceed expectations, investment discipline trumps political wrangling. Thanks to increased oil production and improved refining margins, Exxon Mobil Corporation's profit exceeded expectations, successfully offsetting the impact of falling oil prices. The financial report shows that the adjusted net profit for the fourth quarter was $1.71 per share, 2 cents higher than the average expectation. Capital expenditure this year is estimated at around $28 billion, lower than last year's $29 billion. Exxon Mobil Corporation's Golden Pass LNG export facility in Texas is expected to start operation early this year, and the company is also advancing on a massive natural gas export project in Mozambique. These commitments may indicate that Exxon Mobil Corporation does not have an urgent need to invest in Venezuela. CEO Woods stated that he is open to sending a team to the country to analyze opportunities, but any investment must be safe and economically viable. - Chevron Corporation (CVX.US) reports Q4 earnings per share exceed expectations, no new equipment purchases as production increases in Venezuela. The financial report shows that Chevron Corporation's adjusted earnings per share for Q4 were $1.52, higher than the market's expectation of $1.38. Chevron Corporation expects further growth this year, with production expected to increase by about 8%, mainly from oil fields in Guyana and the Eastern Mediterranean. Chevron Corporation's celebrated capital expenditure discipline is facing pressure from Trump, who wants Chevron Corporation to make large investments in Venezuela. Chevron Corporation plans to increase production in Venezuela by 50% over the next two years, but according to Vice Chairman Mark Nelson, the company will use existing surface equipment and other assets, indicating that its capital budget will not undergo major changes. - The oil and gas industry's largest merger in recent years may be imminent? Coterra (CTRA.US), a Permian giant, is rumored to be in talks to merge with Devon Energy Corporation (DVN.US). According to sources familiar with the matter, the US Permian oil and gas giant Coterra Energy and Devon Energy Corporation are in advanced discussions about a merger; if successful, this would be one of the largest oil and gas sector mergers in recent years globally. Sources say that the two oil and gas giants may announce the merger in the coming days. The sources added that no final decisions have been made and the timing may change, and negotiations may collapse. This deal would strengthen their market-leading position in the Permian Basin in West Texas and New Mexico, giving them greater scale to compete with rivals such as Exxon Mobil Corporation. Important economic data and events forecast - 21:30 Beijing time US December PPI data - 22:45 Beijing time US January Chicago PMI - 00:00 Beijing time the next day US President Trump signs an executive order - 02:30 Beijing time the next day ,2028 FOMC voters, St. Louis Fed President Mouresalem speaks on the US economy and monetary policy - 06:00 Beijing time the next day US Fed Governor Bowman speaks on monetary policy supervision issues.