Preview of US Stock Market | The three major stock index futures are not moving in the same direction, insurance stocks collectively collapsed before the market opening, and UBS sees the S&P 500 reaching 8400 points.

Pre-Market Market Trends 1. Before the market opened on January 27th (Tuesday), the futures of the three major U.S. stock indices were mixed. As of the time of writing, the Dow Jones futures fell by 0.48%, the S&P 500 index futures rose by 0.23%, and the Nasdaq futures rose by 0.60%. 2. By the time of writing, the Germany DAX index fell by 0.12%, the UK FTSE 100 index rose by 0.36%, the France CAC40 index rose by 0.37%, and the European Stoxx 50 index rose by 0.29%. 3. By the time of writing, WTI crude oil fell by 0.23% to $60.49 per barrel, while Brent crude oil fell by 0.25% to $64.61 per barrel. Market News UBS Group AG: The S&P 500 is expected to reach 8400 points by the end of the year, heralding the era of the "golden bull" stocks. Alan Rechtschaffen, Senior Investment Portfolio Manager at UBS Group AG's global wealth management company, expressed optimism about the U.S. stock market, despite the soaring gold prices. He believes that the high price of gold and the continuous rise of the stock market are not mutually exclusive, and the multi-theme DRIVE transformation will drive the stock market to rise by the end of the year. Rechtschaffen predicts that by the end of this year, the baseline scenario for the S&P 500 index will be 7700 points; in a more optimistic scenario, if market conditions cooperate, the index could reach 8300 to 8400 points. He pointed out that the so-called "three major opportunities" driving the market include artificial intelligence, longevity technology, and electricity. These transformative themes will benefit not only technology creators but also end users of various industries. While acknowledging that many investors are using gold as a hedge against social unrest and other uncertainties, Rechtschaffen remains firm in his belief that risk assets and safe-haven assets can rise simultaneously. Trump is likely to announce Powell's successor, possibly at this week's FOMC meeting! U.S. President Trump has claimed to have identified a new Federal Reserve Chairman candidate and stated at the Davos Forum that he would announce it "in the near future." U.S. Treasury Secretary Besent confirmed that Trump said he "may announce the candidate as early as the week of January 26th" (this week). Wolf Research points out that there is a high likelihood of a window of time, particularly during the Federal Open Market Committee (FOMC) meeting of the Federal Reserve in January. Wolf Research states that this timing is reasonable, "especially if Trump wants to shift market attention away from the Fed, which has not cut rates." Escaping the dollar, embracing gold! European asset management giant Amundi: The uptrend in gold prices is far from over. Europe's largest asset management company, Amundi SA, stated that as tensions deepen between the United States and other countries, many investors are reducing their dollar assets and turning to gold, which will continue to support the strengthening of gold prices. Vincent Mortier, the company's Chief Investment Officer, stated in an interview that the massive U.S. fiscal deficit, combined with market uncertainties about the future monetary policy of the Fed, further pushes funds from the dollar to gold. He said, "For the past two and a half years, we've consistently allocated to gold assets, and I believe this strategy is still valid. In the long run, gold is an excellent hedge against currency devaluation and an effective way to maintain purchasing power." As of the time of writing, spot gold rose by over 1% to $5080 per ounce. Silver sees a "violent bull market"! But the trend is comparable to meme stocks, with the risk of a short-term pullback exacerbating. The rapid rise in the price of silver and its violent fluctuations in recent times have led to warnings from some market participants. Marko Kolanovic, former Chief Strategist at JPMorgan and Joint Global Research Director, believes that by late 2026, the price of silver may fall to about half its current level. He believes that the significant increase in the price of silver is not being driven by fundamentals, but mainly by speculative behavior, calling this rally the result of "meme traders trying to dominate the market." Mike Antonelli, Market Strategist at American Financial Group, Inc. service company Baird, likened silver to the original meme stock GameStop Corp. Class A. Data shows that the silver market is currently crazier than meme stocks, and the volatility is currently at a "completely out of control" level. Therefore, for investors, the recent unexpected rise in silver prices requires vigilance against the risk of a short-term profit-taking-induced pullback. As of the time of writing, spot silver rose by over 7% to $111.8 per ounce. Bearish sentiment abounds: Dollar hedging costs rise to their highest level since 2011, potentially heading towards a four-year low. With the highly turbulent U.S. political environment prompting a rush to bearish hedges, U.S. dollar traders are betting on a deeper decline in the dollar at record costs. Short-term options premiums that profit from a weakening dollar have widened to the highest levels since data has been available since 2011. The bearish sentiment is not limited to the short term - investor pessimism about the long-term prospects for the dollar has reached at least the highest level since May 2025. Despite a slight uptick in the dollar index on Tuesday, its continuous decline over the previous three trading days is the steepest since the U.S. tariff turmoil in April last year. If the decline resumes as implied by option prices, the dollar could fall to its lowest level in four years. As of the time of writing, the dollar index (DXY) was at 96.65. Stock News The proposal to "freeze" Medicare payment rates for healthcare insurance sends insurance stocks tumbling. The U.S. government has proposed to maintain the payment rates for Medicare private plans at current levels next year, disappointing investors and causing the stock prices of major U.S. insurance companies to plummet. As of the time of writing on Tuesday pre-market, UnitedHealth Group Incorporated (UNH.US) and Humana (HUM.US) dropped by over 16%, while CVS Health Corporation (CVS.US) fell by nearly 13%. The Centers for Medicare and Medicaid Services (CMS) announced that it expects to only raise Medicare Advantage payment rates by 0.09% in 2027, far below analysts' previous expectations of up to 6% increase. Payment rate increases are crucial for major insurance companies like UnitedHealth Group Incorporated and CVS Health Corporation to cover medical costs, improve benefits for elderly clients, and boost profits. A minor increase in payment rates could directly squeeze profit margins. For federal Medicare insurers already under pressure due to rising medical costs and insufficient government funding, this rate adjustment almost signifies zero growth. However, the final rates will be determined in the coming months, with the possibility of further increases. UnitedHealth Group Incorporated reports mixed Q4 earnings and 2026 guidance below expectations. The financial report shows that UnitedHealth Group Incorporated's Q4 revenue was $113.2 billion, below the market's expectation of $113.87 billion; adjusted earnings per share were $2.11, slightly higher than the market expectation of $2.10. The company expects full-year revenue to be $439 billion in 2026, below the market's expectation of $455.98 billion; it expects adjusted earnings per share for the full year to be $17.75, slightly lower than the market's expectation of $17.76. Boeing Company (BA.US) reports earnings. Non-GAAP earnings per share for the fourth quarter were $9.92; revenue was $23.9 billion, exceeding expectations by $1.06 billion. United Parcel Service (UPS.US) reports Q4 earnings above expectations and raises 2026 revenue guidance. The financial report shows that UPS Q4 revenue was $24.5 billion, with adjusted earnings per share of $2.38, both exceeding market expectations. The company expects revenue of around $89.7 billion in 2026, higher than the market's expectation of $87.95 billion and above the company's previous expectation of $88.7 billion, as it shifts focus from low-profit shipping for its largest customer Amazon.com, Inc. to high-yield freight business. The company expects an adjusted operating profit margin of 9.6% in 2026; it expects capital expenditures of around $3 billion in 2026, lower than the market's expectation of $3.72 billion. As of the time of writing, UPS was up by over 2% in Tuesday pre-market trading. General Motors Company (GM.US) provides guidance exceeding expectations for 2026 performance and announces a $6 billion stock buyback plan. The financial report shows that GM's Q4 revenue decreased by 5% year-on-year to $45.3 billion, below market expectations of $45.8 billion; operating profit was $2.8 billion, in line with market expectations; adjusted earnings per share increased by 30.4% year-on-year to $2.51, exceeding the market's expectation of $2.20. The company expects adjusted EBIT in 2026 to be $13-15 billion, with market expectations at $13.39 billion; it expects full-year adjusted earnings per share to be $11-13, with market expectations at $11.73. Additionally, GM's board of directors announced a quarterly dividend increase of $0.03 to $0.18 per share and approved a new $6 billion stock repurchase plan. The CEO stated that looking ahead, the company is in an increasingly favorable U.S regulatory and policy environment that aligns with customer demands. As of the time of writing, General Motors was up by over 4% in Tuesday pre-market trading. Apple Inc (AAPL.US) reportedly finalizes a deal with Alphabet Inc. Class C (GOOGL.US) for Siri development, potentially after negotiations with Anthropic fell through. Apple Inc. is said to have selected Alphabet Inc. Class C to assist in developing the next generation of the Siri voice assistant, following failed negotiations with Anthropic regarding the smart upgrade of Siri. Apple Inc. adjusted its underlying strategic layout for Apple Intelligence in the second half of 2025. According to an official statement in January 2026, Apple Inc. has reached a multi-year deep collaboration agreement with Alphabet Inc. Class C. The core semantic understanding and multimodal interaction features of the new Siri will be powered by the Gemini model. Market analysis indicates that Alphabet Inc. Class C's annualized offer of about $1 billion is more cost-effective, and its mature cloud infrastructure can better support the global user concurrency demands of iOS. Meanwhile, Anthropic, which developed the popular Claude series of AI models, reportedly sought "tens of billions of dollars annually for multiple years" in compensation, a condition that Apple Inc. ultimately found unfavorable, leading to the suspension of negotiations with Anthropic. Micron Technology, Inc. (MU.US) plans to increase its investment in storage chip manufacturing in Singapore to address the global "chip shortage". According to three sources familiar with the matter, the American memory chip manufacturer Micron Technology, Inc. is set to announce an additional investment in storage chip manufacturing capacity in Singapore to expand production capacity to address the severe global shortage of storage chips. The sources revealed that Micron is expected to announce the investment plan as early as Tuesday local time, with one source disclosing that the investment will focus on the NAND flash memory. Singapore is an important manufacturing base for Micron, with 98% of its flash chips produced locally. The company is also building a $7 billion high-bandwidth memory (HBM) advanced packaging plant in Singapore, which is primarily used in the AI chip field and is expected to be operational in 2027. As of the time of writing, Micron Technology is up by nearly 5% in Tuesday pre-market trading. NIKE, Inc. Class B (NKE.US) initiates a new round of automation transformation, cutting 775 jobs at U.S. distribution centers to "streamline" the supply chain. According to sources, NIKE, Inc. Class B plans to cut 775 positions at its distribution centers to streamline the supply chain layout and accelerate automation applications. This round of job cuts is separate from the reduction of 1,000 corporate positions announced last summer. NIKE, Inc. Class B confirmed in a media statement that the job cuts mainly affect its U.S. distribution business, aiming to reduce complexity, increase flexibility, and create a more responsive, resilient, accountable, and efficient operating system. This job cut is a continuation of the "Win Now" transformation strategy implemented by NIKE, Inc. Class B's current CEO, Elliott Hill, since taking office. Prior to this, NIKE, Inc. Class B had undergone multiple rounds of organizational restructuring, including cutting around 1,600 jobs in early 2024 and making minor adjustments to non-business departments at headquarters in August 2025. Important Economic Data and Events Forecast 11:00 PM Beijing time - U.S. Conference Board Consumer Confidence Index for January Earnings Forecast Wednesday morning: Texas Instruments Incorporated (TXN.US) Wednesday pre-market: ASML Holding NV ADR (ASML.US), United Microelectronics Corp. Sponsored ADR (UMC.US), New Oriental Education & Technology Group, Inc. Sponsored ADR (EDU.US), AT&T (T.US), Starbucks Corporation (SBUX.US)