To The Moon

I. Performance of Global Equity Indices (in US Dollar)

Source: Bloomberg, Tiger Brokers

Key Highlights

◼ Last week, U.S. equities staged a strong Thanksgiving rebound, with the Nasdaq rising nearly 5%. The market is currently trading along two main threads. First, investors are focused on whether the Fed will actually deliver a rate cut in December. With aggressive market pricing already in place combined with expectations of a BOJ rate hike-any disappointment this month could pressure high-valuation sectors. Second, the Al narrative is diverging: the "Google ecosystem" strengthened while the "OpenAl ecosystem" came under pressure. That said, we believe Al's long-term growth potential far outweighs any zero-sum competitive framing. Each frontier model developer has distinct advantages, and the market is still far from a winner-takes-all outcome. Looking ahead, both the Google-linked and OpenAl-linked ecosystems are likely to advance side by side.

◼Recently, Greater China markets have been grinding higher. Macro conditions show mild improvement, though not yet strong-the PMI remains in contraction territory, while high-tech manufacturing continues to stand out. On the liquidity side, sentiment is still cautious: active foreign outflows have expanded, passive inflows have slowed, A-share turnover and rotation have weakened, though small-cap trading and derivatives volumes remain active. At the sector level, Alibaba's earnings highlighted stronger-than-expected progress in "Al + Cloud," but competition in instant retail continues to intensify, implying the previously expected easing of the Q4 food-delivery battle may be pushed back. Overall, economic resilience is intact, but a full recovery in fundamentals will take time.

◼ Key events to watch this week include U.S. November PMis, the September PCE inflation report, and the University of Michigan consumer sentiment survey.

II. Key Market Themes

U.S. Equities: Rate Cuts Drive Short-Term Volatility, Al Determines Long-Term Growth

Over the past week, U.S. equities continued their upward trend during the Thanksgiving holiday, with all three major indices posting notable gains. The Nasdaq rose nearly 5% for the week. Historically, after Thanksgiving-week rallies, the S&P 500 has shown an 85% probability of pulling back on Cyber Monday, with an average single-day decline of about 0.9%. However, historical statistics merely reflect tendencies-what matters more is the current market setup. Broadly speaking, recent market trading revolves around two core themes: (1) macro uncertainty-whether a December rate cut will ultimately materialize; and (2) Al-specifically whether Google is poised to reshape the Al value chain.

From a macro perspective, President Trump stated last week that he has finalized his choice for the next Federal Reserve Chair. Market participants broadly expect the preferred candidate to be Kevin Hassett, who openly supports tax cuts and faster rate reductions. This briefly boosted market sentiment, prompting investors to pre-trade the easing cycle. However, as things currently stand, hard data remains sparse and Fed officials are sharply divided, while the market has aggressively priced in an 85% probability of a December rate cut. In our view, if the Fed merely delivers dovish guidance without actually cutting rates-and this comes alongside rising expectations for a Bank of Japan hike-short-term volatility in tech may increase, pressuring high-valuation stocks. Still, institutional long positions have moderated, and corporate buybacks continue to provide persistent underlying demand. As long as the indices do not break below their November lows, any pullback would likely mark the end of this correction.

On Al, since November the market has increasingly embraced the narrative of Google's full-stack advantage while continuing to question OpenAl's financial sustainability. As a result, the "Google ecosystem" and the "OpenAl ecosystem" have diverged significantly in performance, with market expectations shifting toward Google taking share from both OpenAl and Nvidia. However, we believe Al's long-term growth is far greater than any zero-sum competitive dynamic, leaving ample room for multiple giants to coexist. Google, OpenAl, and Anthropic each possess differentiated strengths in their respective model architectures, and we are far from any winner-takes-all scenario. The more likely outcome is a pattern of alternating leadership over time. Therefore, while we have favored Google's full-stack advantage since early this year and positioned it as our largest holding, a single definitive winner is still uncertain, and the current one sided market sentiment could reverse at any time in the short term. Over the medium to long term, we expect both the "Google ecosystem" and the "OpenAl ecosystem" to advance in parallel.

Source: Bloomberg

Greater China: Mild Macro Recovery, Sector Opportunities Emerging

Over the past week, the Greater China markets experienced a volatile but upward trend, with both the Hang Seng Index and the A-share markets posting weekly gains of over 2%.At the macro level, China's official NBS Manufacturing PMI in November edged up slightly to 49.2— an improvement but still within contraction territory. The production index and new orders index rose to 50 and 49.2, respectively, indicating overall stability in manufacturing and a mild recovery in demand. The raw materials inventory index remained flat at 47.3, suggesting that corporate procurement activity remains cautious. Notably, the high-tech manufacturing PMI came in at 50.1, marking its tenth consecutive month in expansion. Overall, while macro indicators show signs of incremental improvement, the momentum remains insufficient to fully reverse investor caution. Economic resilience persists, but the recovery pace is expected to stay moderate.

Source: Wind, Tiger Brokers

On the capital front, active foreign funds continued to flow out of A-shares, with outflows widening to USD 90 million. Hong Kong equities also saw USD 280 million in active outflows. Although passive foreign inflows remain positive, the pace has slowed significantly for both A-shares and Hong Kong equities, reflecting lingering caution among external investors. From a sentiment perspective, A-share turnover has continued to decline, with daily trading value down 6% to RMB 180 billion, signaling a cooling of market risk appetite. However, margin financing balances in Shanghai and Shenzhen have not fallen meaningfully, and trading volumes in ChiNext and index futures have risen against the trend, indicating that certain funds are still seeking structural trading opportunities in small/mid-cap names and derivatives.

Alibaba's earnings release was the key event for Greater China last week. On the positive side, the company's "Al + Cloud dual-engine strategy is gaining traction. Alibaba Cloud revenue grew 34% YoY, significantly above market expectations; capex surged 80% YoY to RMB 32 billion; and Al-related businesses have delivered triple-digit growth for nine consecutive quarters. However, competition in instant retail remains intense. Management positioned "Taobao Flash Sales" as the platform's second major growth curve. The market previously expected the food-delivery/instant retail price war to ease or even conclude in Q4, but current signals suggest that this inflection point will be pushed further out. Overall, Alibaba has entered a steady-phase investment cycle willing to sacrifice near-term profitability to secure long-term resilience in Al and instant retail. The key question going forward will be whether the ROl of its Al investments can be validated.

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