Moody's economist predicts three rate cuts by mid-2026; December auto sales results released.

New 1% Remittance Tax in the US Effective January 1, 2026

Starting January 1, 2026, the US will implement a new 1% tax on certain cross-border remittances.

Tax Details

• Remittance service providers will be required to collect and report this tax on eligible transactions.
• The tax applies when remitters use cash or similar payment instruments (e.g., money orders) for cross-border remittances.
• Transactions funded through US bank accounts or debit/credit cards are generally exempt.

Analysts suggest this tax will primarily impact individuals relying on cash for remittances, particularly within immigrant communities.

Federal Reserve's Record Liquidity Injection on December 31, 2025

On the last trading day of 2025, the Federal Reserve provided $74.6 billion in loans through its Standing Repo Facility (SRF), surpassing the previous high of $50.35 billion.

Market Reactions

• This liquidity injection is seen as a seasonal measure for year-end balance sheet management.
• Despite the influx, risk assets like Bitcoin showed muted responses.

Moody's Economic Outlook for 2026

Mark Zandi, Chief Economist at Moody's, predicts aggressive rate cuts by the Federal Reserve in early 2026 due to a weak job market and uncertain inflation outlook.

Expected Rate Cuts

• Zandi anticipates three rate cuts of 25 basis points each before mid-2026.

OpenAI's Development of Audio AI Hardware

OpenAI is reportedly upgrading its audio AI models in preparation for launching its first AI-driven personal hardware device, focusing on audio interaction.

Model Enhancements

• The new device will feature a voice-enabled ChatGPT, with improvements in response accuracy and speed.

DeepSeek's New Architecture Announcement

On New Year's Day, DeepSeek introduced a new architecture called mHC (Manifold-Constrained Hyperconnection) aimed at addressing instability in large-scale model training.

Technical Innovations

• The architecture enhances traditional Transformers by expanding single residual flows into multi-flow parallel structures.

Gold Prices Reach Historic Highs

In 2025, gold prices hit over 50 historical highs, outperforming major US stock indices and the dollar index.

Contributing Factors

• Central bank purchases, a favorable environment for Fed rate cuts, and renewed interest in currency devaluation trades have driven this trend.

EU's Carbon Border Adjustment Mechanism

The EU's Carbon Border Adjustment Mechanism (CBAM) will take effect on January 1, 2026.

China's Response

• China criticized the EU for setting high default carbon emission intensity values, arguing it discriminates against Chinese products and violates WTO principles.

Hong Kong IPO Market Recovery in 2025

The Hong Kong IPO market saw a strong recovery in 2025, with 119 companies listed and fundraising exceeding HKD 285.8 billion.

Future Projections

• The market is expected to surpass HKD 300 billion in 2026.

US Stock Market Performance

On December 31, 2025, US stock indices closed lower, but all three major indices recorded double-digit gains for the year.

Index Performance

• Dow Jones: -0.63%, closing at 48,063.29 (+12.98% for 2025)
• Nasdaq: -0.76%, closing at 23,241.99 (+20.36% for 2025)
• S&P 500: -0.74%, closing at 6,845.5 (+16.39% for 2025)

Tesla's FSD Cross-Country Journey

A Tesla Model 3 equipped with FSD v14 completed a cross-country trip from Los Angeles to South Carolina, covering 2,732 miles without human intervention.

Nvidia's Acquisition Talks

Nvidia is reportedly in discussions to acquire AI21 Labs for $2-3 billion, targeting its team of top AI PhDs.

Price Increases for Nvidia and AMD GPUs

Starting in early 2026, Nvidia and AMD are expected to significantly raise GPU prices due to rising memory costs.

Warren Buffett Steps Down as CEO of Berkshire Hathaway

Warren Buffett officially stepped down as CEO of Berkshire Hathaway on January 1, 2026, after a record of significant stock sales.

TSMC Receives License for Chip Equipment Exports

TSMC has obtained a US government license to export chip manufacturing equipment to its Nanjing facility in 2026.

SanDisk's Stock Surge

SanDisk's stock surged 559% in 2025, driven by strong demand for storage chips amid the AI boom.

Hong Kong Stock Market Activity

On December 31, 2025, net purchases of Hong Kong stocks reached HKD 3.449 billion, with significant investments in major banks.

Baidu's Kunlun Chip IPO Application

Baidu announced that Kunlun Chip has submitted a listing application to the Hong Kong Stock Exchange.

Electric Vehicle Sales in December

December saw record electric vehicle deliveries from various manufacturers, with Xiaomi breaking the 50,000 mark.

Weibo's Share Buyback Plan

Weibo plans to repurchase up to $200 million in shares over the next 12 months.

Wall Street's New Listing

Wall Street welcomed the listing of Wall Street Technology, which saw a subscription rate of over 2,347 times.