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The challenged Chinese autonomous trucking company TuSimple has now rebranded itself as CreateAI, shifting its focus towards video games and animation, the announcement was made on Thursday.

 

This announcement follows GM's closure of its Cruise robotaxi division this month, marking a phase where the once-thriving self-driving startup industry is starting to eliminate laggards. TuSimple, operating in both U.S. and China markets, faced its own problems, including vehicle safety concerns, a $189 million settlement from a securities fraud lawsuit, and its removal from Nasdaq in February.

 

Over two years after CEO Cheng Lu rejoined the company in this role after being ousted, he now forecasts the business might reach a break-even point by 2026.

 

This optimism is tied to a video game based on popular martial arts novels by Jin Yong, planned for an initial release in that year, according to Cheng. He foresees generating "several hundred million" in revenue by 2027 when the complete version is launched.

 

Prior to its delisting, TuSimple reported a loss of $500,000 during the first three quarters of 2023 and invested $164.4 million in research and development during that time frame.

 

Company co-founder Mo Chen has a "long-standing connection" with the Jin Yong family and initiated work back in 2021 to produce an animated feature based on the novels, as Cheng explained.

 

The company touts its artificial intelligence expertise in developing autonomous driving software as providing a foundation for the development of generative AI, which is the advanced technology powering OpenAI’s ChatGPT, able to create human-like responses to user inputs.

 

In conjunction with the CreateAI rebranding, the company has launched its first significant AI model named Ruyi, an open-source visual work model available on the Hugging Face platform.

 

"Our shareholders clearly recognize the value in this transformation and are eager to progress in this new direction," Cheng expressed. "Both our management team and Board of Directors have received tremendous support from our shareholders." The company is slated to hold its annual shareholder meeting on Friday. Cheng stated the company intends to expand its workforce to around 500 next year, up from the current 300.

 

Co-founder Xiaodi Hou, claiming to be the largest individual shareholder at 29.7%, has openly questioned the shift towards gaming and animation. Hou announced his intention to withhold or oppose support at the shareholders meeting and advocated for the liquidation of the company. He has since launched his own autonomous trucking firm in Houston called Bot Auto, which secured $20 million in funding in September.

 

While still operating under the TuSimple brand, the company announced in August a collaboration with Shanghai Three Body Animation to produce the first animated feature film and video game based on the science fiction novel series "The Three-Body Problem."

 

The company mentioned at the time that it was inaugurating a new business sector dedicated to the creation of generative AI applications for video games and animation.

 

CreateAI anticipates reducing top-tier, known as triple A, game production costs by 70% within the next five to six years, according to Cheng. He did not disclose whether the company is in discussions with gaming giant Tencent.

 

When questioned about the implications of U.S. restrictions, Cheng asserted there were no difficulties, stating the company utilizes a combination of Chinese and non-Chinese cloud computing providers.

 

The U.S., under the Biden administration, has intensified restrictions on Chinese businesses’ access to advanced semiconductors necessary for powering generative AI.

 

Gold prices edged up on Thursday, erasing earlier gains after U.S. data reinforced market expectations that the Federal Reserve will take a cautious approach to policy easing in the year ahead.

 

Spot gold was up 0.2% at $2,592.39 per ounce and U.S. gold futures fell 1.7% to $2,607.50.

 

Data earlier showed the U.S. economy growing faster than expected in the third quarter, while jobless claims also fell more than anticipated.

 

"With these GDP prints and the jobless claims, it's showing that the data is fairly firm," said Bart Melek, head of commodity strategies at TD Securities, adding that a solid economy and inflationary risks, including tariffs and spending cuts, reaffirm the Fed has little reason to be aggressive, which historically has not been good for non-yielding gold.

 

Gold slipped more than 2% to a one-month low earlier in the session after Fed officials dialed back projections for future easing given stubborn inflation.

 

The drop attracted investors to buy, sending prices as much as 1.5% higher earlier in the session.

 

"The short-term dip in gold presented a good buy-in opportunity for long-term stackers. You have the looming debt problem, the potential government shutdown, and we're already seeing the posture of the new administration in terms of trying to cut the expenses and minimize the deficits," said Alex Ebkarian, chief operating officer at Allegiance Gold.

 

U.S. President-elect Donald Trump's pre-inauguration push to sway Congress threatens to complicate efforts to avoid a government shutdown, potentially disrupting services such as air travel and law enforcement ahead of the holidays.

 

Gold is considered a safe investment option during economic and geopolitical turmoil and tends to thrive in a low-interest-rate environment.

 

Investors await Friday's release of core PCE data, the Fed's preferred inflation measure, for further clues on the economic outlook.

 

Spot silver fell 1.4% to $28.95 per ounce, platinum added 0.1% at $920.55 and palladium rose 0.5% to $907.68.

The stock market's post-election surge is heating up as we approach year-end, but it's important for investors to exercise caution in pursuit of profits.

 

Some analysts view the remarkable rise since the November 5 election as a warning sign, implying that the market's record-breaking performance may lead to a downturn as early as next year.

 

Among the pessimists, BCA Research recently suggested that stocks could enter a bearish phase in the first half of next year, with potential declines reaching 35%.

 

Persisting economic threats pose significant risks to stocks, the firm noted in a recent report. Consumer spending appears to be decreasing, with shoppers increasingly seeking cheaper options at retailers like Target and Walmart. Additionally, sectors like the job market are weakening, they mentioned.

 

"While we anticipate a recession in 2025 is likely, risk assets might fall short even without one, and the current valuations are not promising for future gains," the firm stated.

 

"Nevertheless, we predict a bear market in equities will manifest in the first half, and we will seek a strategic entry to short equities if our stops are breached. We intend to reduce our underweight position shortly after the 20% bear-market threshold and may aim to overweight equities at declines of around -30% to -35%, should they reach such lows."

 

Other Wall Street analysts have adopted a bearish outlook due to historically elevated valuations. According to Ned Davis Research, since 1928, in years when the S&P 500 has achieved at least 50 record highs, the median return for the following year was -6%.

 

The S&P 500 recently marked its 57th record high of 2024.

 

"The primary challenge with momentum studies is that stock prices don't rise indefinitely," analysts at the firm wrote, warning that concentrated market areas could predispose stocks to a weaker 2025. "While AI might spur another wave of productivity and profits that quell inflation and moderate Federal Reserve policies, history suggests this is the exception, not the norm."

 

Investors are advised to consider reallocating resources at the year's close, as noted by Andrew Slimmon, a senior portfolio strategist at Morgan Stanley.

 

"The stock market is being driven by speculative, low-quality growth stocks," Slimmon told CNBC this week, remarking that the current investment scenario is reminiscent of 2021. "That period didn't end well for those invested stocks. I believe December is a fitting time to reassess and declare an end. While it might persist, one should be cautious about future repercussions," he said.

 

"Numerous stocks have surged by over 50%, 60%, 70% this year. Therefore, it seems wise to exit these positions and seek out more underperforming areas."

 

Most analysts on Wall Street are broadly optimistic for 2025, though they expect a more subdued performance compared to the significant gains seen in 2023 and 2024. Barclays, Bank of America, and Goldman Sachs project a 10% return for the S&P 500 next year. The benchmark index has risen approximately 28% so far this year.

European markets experienced a downturn on Tuesday, ending an eight-session winning streak. The pan-European Stoxx 600 index closed down by 0.52%, with most sectors retreating. Among the key contributors:

• Industrials led the losses, declining 1.08%.
• Mining stocks fell 0.78% after Chinese trade data disappointed market expectations.

 

Notable Regional Performances

• Germany's DAX managed to close slightly above the flatline.
• France's CAC 40 dropped 1.14%, leading the regional losses.
• Despite Tuesday’s decline, the Stoxx 600 has risen 1.63% in December so far, maintaining its upward momentum for the month.

 

Key Developments and Stock Highlights

 

Delivery Hero

• Shares of Delivery Hero plummeted by 10% following the Dubai Stock Exchange debut of its Middle Eastern subsidiary, Talabat.
• Talabat raised $2 billion in its IPO, but shares fell from 1.7 UAE Dirham to 1.49 UAE Dirham by the session's close.

 

Commerzbank

• Germany’s Commerzbank saw its stock rise nearly 3%, ranking among the top gainers in the Stoxx 600.
• The rally came after the resignation of Jutta Dönges from the bank's supervisory board.

 

Ashtead Group

• The U.K. equipment rental firm saw its shares tumble by over 11%, the largest drop on the Stoxx 600.
• The decline followed its announcement to move its primary listing to New York and a warning of weaker-than-expected annual profits.

 

TeamViewer

• Shares of TeamViewer fell by 6% after the company announced its largest acquisition to date: a $720 million deal for employee experience software maker 1E.

 

Economic Data and Corporate News

 

U.S. Inflation Outlook

 

Investors await Wednesday's U.S. consumer price index (CPI) report, which could shape the Federal Reserve's interest rate decisions for its December 17-18 meeting.

• Forecasts: Headline inflation is expected to rise 0.3% for November and 2.7% year-on-year.

 

China Trade Data

 

Chinese trade figures underwhelmed:

• Imports contracted by 3.9% in November, marking the sharpest drop since September 2023.
• Exports grew by 6.7%, below the anticipated 8.5%.

 

U.K. Hiring Trends

 

A report by Indeed highlighted a 24% year-on-year contraction in U.K. job postings as of November 22.

• Contributing factors: New government policies, including increased National Insurance contributions, a higher minimum wage, and enhanced workers' rights legislation.

 

SSE Investment Plans

 

SSE announced plans for its subsidiary, SSEN Transmission, to invest at least £22 billion in grid infrastructure between 2026 and 2031.

• This aligns with the U.K.’s target to decarbonize the electricity grid by 2030.

 

Other Headlines

• Shell settled a lawsuit with Greenpeace U.K., which included a £300,000 payment to the Royal National Lifeboat Institution and a legally binding agreement barring future protests near Shell’s North Sea platforms.
• Allianz raised its financial targets, promising increased shareholder returns and revenue growth across its divisions.
• Stellantis and CATL announced a joint €4.1 billion investment in a European battery factory in Spain, with production slated for late 2026.

 

Global Markets at a Glance

 

European Opening Predictions

• FTSE 100: Expected to open 38 points lower at 8,315.
• DAX: Predicted to drop 76 points to 20,274.
• CAC 40: Projected to decline 31 points to 7,454.

 

U.S. Market Snapshot

• The S&P 500 and Nasdaq Composite saw slight gains, rising 0.1% and 0.3%, respectively, while the Dow Jones dropped by 0.2%.