Non-farm payrolls and CPI data released; AI competition intensifies; earnings reports upcoming.

AI and Robotics Battle Intensifies

The competition in the AI and robotics sector is heating up, with major players like Qianwen, Doubao, Yuanbao, and Wenxin launching significant initiatives in February. This period is expected to showcase key advancements in the global AI landscape, particularly in China, where the weeks surrounding the Spring Festival are pivotal for AI application promotion.

Major Initiatives and Cash Activities

From February 1 to February 17, Tencent Holdings (00700.HK) will initiate a cash activity worth 1 billion yuan for its Yuanbao platform. Baidu Group (09888.HK) has also launched a 500 million yuan cash red envelope campaign for Wenxin, running from January 26 to March 12. On February 6, Alibaba's Qianwen APP announced a 3 billion yuan investment to boost its Spring Festival campaign, extending the validity of its free order card to February 28, integrating services from Hema and Taobao.

New Model Releases

Several Chinese companies are set to unveil new generation models: DeepSeek plans to release its powerful V4 model in February, while ByteDance and Alibaba are expected to launch Doubao 2.0 and Tongyi Qianwen 3.5 models, respectively, around the Spring Festival.

International Developments

Internationally, February will also see product updates and commercialization efforts. Elon Musk's xAI is set to significantly upgrade its large language model, Grok. OpenAI is reportedly launching a chatbot advertising service this month, and Apple plans to release a more personalized version of Siri powered by Google Gemini.

Economic Data and Market Reactions

The U.S. is experiencing a temporary government shutdown, delaying the release of non-farm payroll data until February 11. The upcoming reports on non-farm employment and CPI are crucial, as positive results could restore market confidence amid recent sell-offs. Current expectations for January's non-farm employment growth are between 60,000 to 80,000 jobs, with discussions on interest rate cuts likely if the numbers fall below this range.

China’s Financial Data

China will release its January financial and inflation data soon. Caixin Securities predicts a slight decline in January CPI by 0.4% year-on-year, while Zheshang Securities forecasts a 0.6% increase. The anticipated new social financing figures for January are 7.38 trillion yuan according to Caixin, while Zheshang is more conservative at 6.9 trillion yuan.

Ongoing Tensions and Market Focus

Tensions between the U.S. and Iran are escalating, with Trump indicating that negotiations will continue. However, significant breakthroughs are unlikely due to fundamental disagreements on the terms of the discussions.

Earnings Season Continues

The earnings season is ongoing, with companies like McDonald's (MCD), Coca-Cola (KO), and T-Mobile US (TMUS) set to report next week. Investors are particularly focused on the volatile AI and software sectors, with companies like Applovin (APP) and Unity Software (U) under scrutiny.

Upcoming IPOs and Market Events

The Hong Kong IPO market remains active, with companies like Lianqi Technology (06809.HK) officially listing soon. The stock has seen a strong pre-listing performance, reflecting high market expectations for its growth in AI and data center chips.

Conclusion

As the AI and robotics sectors evolve, both domestic and international markets are poised for significant developments. Investors should keep an eye on upcoming earnings reports and economic data releases that could influence market trends.