Fed Minutes: Members Expect Rate Cuts; Silver Rises, Copper to Follow; Hong Kong Market Update.

Federal Reserve Meeting Minutes: Interest Rate Outlook

Key Insights

The Federal Reserve's recent meeting minutes indicate that "most" officials anticipate further interest rate cuts after December, with some advocating for a pause for a period.

• If inflation decreases as expected, further rate cuts may be appropriate.
• A majority support a rate cut in December, although a few believe a more cautious approach might be warranted.
• Concerns about rising unemployment risks have been highlighted by supporters of the rate cut.
• There is a consensus that reserve balances are at adequate levels, with plans to manage reserves through short-term Treasury purchases.

U.S. Government Approves Chip Equipment Exports to China

According to reports, U.S. authorities have granted Samsung and SK Hynix permission to export chip manufacturing equipment to China by 2026. This follows the lifting of some restrictions on South Korean companies after earlier exemptions were revoked.

• The companies previously benefited from the "Verified End User" (VEU) system, allowing them to import controlled items without separate export licenses.
• New regulations effective December require licenses for U.S. equipment sent to their Chinese factories.

Silver Prices Surge Amid Supply Concerns

Silver prices have surpassed $76 per ounce, doubling within the year, raising investor concerns about a potential market reversal.

• Expert Peter Krauth suggests that historical analysis indicates silver could see significant price increases, potentially reaching $125 by 2026 due to supply shortages.
• A new price floor of $50 is anticipated, with further increases expected if this level is breached.

Copper Prices Hit Record Highs

Copper prices have surged over 40% on the London Metal Exchange, becoming a standout in the commodities market for 2025.

• The rise in copper prices is driving related stocks higher and is expected to continue due to favorable macroeconomic conditions and supply-demand dynamics.

U.S. Stock Market Overview

The U.S. stock market indices experienced a slight decline for the third consecutive day, with the S&P 500 down 0.14% and the Nasdaq down 0.24%.

• Notable tech stocks showed mixed results, with Nvidia down 0.36% and Apple down 0.25%, while Google and Microsoft saw slight gains.

Notable Corporate Developments

• Tesla: The company reported a projected delivery of 422,850 vehicles for Q4 2025, a 15% year-over-year decline.

• Nvidia: In talks to acquire Israeli AI startup AI21 Labs for up to $3 billion.

• Warner Bros: Plans to reject Paramount's acquisition offer, favoring Netflix's proposal instead.

Hong Kong Market Activity

On December 30, net selling of Hong Kong stocks reached HKD 38.44 billion, with notable purchases in SMIC and significant sell-offs in Tencent.

Conclusion

The financial landscape is currently influenced by Federal Reserve policies, corporate developments in the tech sector, and commodity price fluctuations, particularly in silver and copper. Investors are advised to monitor these trends closely as they may impact market dynamics moving forward.