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 service. Baidu Group (09888.HK) has also launched a 500 million yuan cash red envelope campaign for its Wenxin service, 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 with services like Hema and Taobao.

New Model Releases

Several Chinese companies are set to unveil next-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 upgrade its large language model, Grok, while OpenAI is reportedly launching a chatbot advertising service. Apple plans to release a more personalized version of Siri powered by Google's Gemini.

Economic Data and Market Reactions

The U.S. is facing a unique situation with the delay of non-farm payroll data due to a recent government shutdown, now scheduled for February 11. The market anticipates a non-farm employment growth of 60,000 to 80,000 jobs for January. A figure below this range could reignite discussions on interest rate cuts. The Consumer Price Index (CPI) data will also be closely watched for seasonal price pressures.

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 Zhejiang Securities forecasts a 0.6% increase. The expected new social financing for January is projected at 7.38 trillion yuan by Caixin and 6.9 trillion yuan by Zhejiang.

Ongoing Tensions and Market Focus

Tensions between the U.S. and Iran are escalating, with Trump indicating positive talks but highlighting fundamental disagreements on nuclear negotiations. The oil market is closely monitoring any signs of supply disruptions due to these geopolitical tensions.

Earnings Season Continues

The earnings season is in full swing, 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) in the spotlight.

Upcoming IPOs and Market Events

The Hong Kong IPO market remains active, with companies like Lanqi Technology (06809.HK) officially listing soon. The stock has seen a significant pre-listing increase, reflecting strong market confidence in its growth potential in AI and data center chips.

In summary, February is shaping up to be a critical month for both AI advancements and financial data releases, with significant implications for market confidence and investor sentiment.