To The Moon

I. Performance and Valuation of Global Equity Indices

Data Source: Bloomberg, Complied by Tiger Brokers

II. Key Market Themes

i. U.S. Inflation Cools Surprisingly, Market Concerns Ease Slightly, Opportunities Remain

• Last week, U.S. December inflation data was released, showing a slight cooling compared to previously strong economic indicators. Specifically, headline CPI rose 2.9% year-over-year, higher than the prior figure but in line with expectations. Notably, the increase was primarily driven by energy prices, which are subject to short-term volatility and lack long-term persistence.

• Meanwhile, core CPI increased 3.2% year-over-year, exceeding the prior figure but slightly below expectations. Core goods prices continued to cool, while core services remained resilient, particularly in the housing component. However, the Federal Reserve's meeting minutes indicated that several officials expressed confidence in controlling housing inflation over time.

• This provided some relief to market sentiment. While markets still anticipate only one rate cut in 2025, the expected timing has moved forward to June. Interestingly, Federal Reserve Governor Christopher Waller recently stated in an interview, "If inflation remains under control, there could be 3-4 rate cuts this year." We maintain our view that markets are overly concerned about inflation, and current rate expectations are overly aggressive, presenting trading opportunities.

Data Source: Bloomberg, Complied by Tiger Brokers

Data Source: Bloomberg, Complied by Tiger Brokers

ii. U.S.-China Relations Improve: Is a Turnaround for Greater China Assets on the Horizon?

• Recently, U.S.-China relations have seen a series of positive developments. A few days ago, China’s state-run People’s Daily published an article titled Understanding the Mutually Beneficial Nature of U.S.-China Relations, signaling goodwill toward the U.S. Additionally, on January 17, China’s Foreign Ministry announced that Vice President Han Zheng would attend Trump’s inauguration ceremony in the U.S., and the two nations' top leaders also held a phone call the same day.

• Traditionally, China only sends its ambassador to attend U.S. presidential inaugurations. This high-level participation underscores China’s goodwill and has eased tensions between the two countries. Previously, markets were concerned about Trump’s potential aggressive stance toward China. However, Bloomberg reports suggest that Trump is considering a gradual and measured increase in tariffs. While the competitive landscape between the U.S. and China is unlikely to change fundamentally in the short term, Trump’s policies toward China may leave room for moderation. As a result, we remain relatively optimistic about Greater China assets in 2025.

Data Source: Bloomberg, Complied by Tiger Brokers

3. TSMC’s Earnings Exceed Expectations: Can AI Growth Reignite?

• Taiwan Semiconductor Manufacturing Company (TSMC) $台积电(TSM)$ recently reported outstanding earnings, with both revenue and profits beating market expectations. Quarterly revenue reached $26.9 billion, while gross profit hit $15.9 billion, with the gross margin climbing for the fourth consecutive quarter to 59%. Furthermore, TSMC’s guidance for next quarter’s revenue and gross margin also exceeded market expectations.

• At the same time, AI-driven High-Performance Computing (HPC) continues to be a key growth driver, contributing over 50% of revenue despite a high base. During the earnings call, management projected a 45% compound annual growth rate (CAGR) for AI-related revenue over the next five years. Based on this projection, TSMC’s AI-related revenue could surpass $80 billion by 2029. Moreover, TSMC, known for its traditionally conservative approach, has increased its capital expenditure budget by 20%-30%, signaling strong confidence in the AI sector. This development further underscores the vast potential of AI growth!

Data Source: Bloomberg, Complied by Tiger Brokers

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