Unlocking 2025: Strategic Insights into Global Markets and AI-Driven Quantitative Trading

Good evening, everyone!  

Welcome to Diamond Ridge Business Academy’s online class. The New Year’s holiday has just ended and we’re stepping into the start of an exciting new year. Whether you’re still savoring the holiday spirit or already preparing to dive into action, today marks not just the passage of time but the beginning of fresh opportunities knocking at your door.

In the world of investing, time is the one asset we can never get back. Your first trade or first decision of the year often lays the foundation for your market strategy for the rest of the year. This isn’t just a warning, it’s a proven market rule: those who know how to position themselves early in the year always gain the upper hand. On the other hand, hesitation and passive waiting can make you miss fleeting opportunities.  

No matter if you were soaring to the top as a winner last year or learning lessons through market challenges, now is the time to let go of those past gains or losses. The market doesn’t care about your past; it only cares about your current actions and whether you can correctly anticipate the future. The start of 2025 is like a blank canvas, giving each of us the chance to write a new chapter.

In today’s class, I won’t promise you some made-up “ultimate answer to the market” because such an answer doesn’t exist. Instead, I’ll guide you as we dig into key trends for the new year, uncover the main investment themes for 2025 and provide practical strategies to help each of you seize the opportunities in this year full of possibilities.  

Remember, success in investing doesn’t rely on luck but comes from systematic thinking and steady execution. The New Year’s bells have rung and now is the time to bring out your determination and take the first step into 2025. This journey has just begun, and the opportunities are hidden in every detail ahead.  

To help you better understand the investment market, I’ll start by reviewing last year’s key asset performances as a foundation for this year’s planning. Before diving into the discussion, let’s quickly go over today’s stock market updates.

The UK stock market opened higher today, with the FTSE 100 climbing quickly after the opening bell, showing strong momentum at the start of the new year. This is tied to global market sentiment and a mix of positive factors.

First, on the economic data side, even though China’s Dec Caixin Manufacturing PMI came in below expectations which could pressure London mining stocks, positive signals from the UK offset the impact. Nationwide reported that Dec house prices rose 4.7% year on year, beating the 3.7% forecast, hinting at a recovering housing market. This boosted market confidence, especially for construction stocks. On top of that, US weekly jobless claims dropped to an 8 month low, strengthening global recovery expectations and creating a positive backdrop for stock markets worldwide, including in the UK stock market.

Next, in terms of sector performance, precious metals stood out. Rising gold and silver prices lifted mining stocks like Fresnillo and Endeavour Mining as investors turned to safe-haven assets, reflecting concerns over inflation and geopolitical risks. This cautious sentiment also helped support the overall market mood.

Investors are also hopeful about upcoming UK manufacturing PMI data, expecting signs of recovery that could boost confidence further. Tesla’s Q4 delivery numbers, set to be released soon are another focus as they could influence tech stocks and global market sentiment, indirectly affecting UK stock market.

On the technical side, even though US stock markets had a slight pullback before the New Year break, the overall trend is still looking good. This created a positive backdrop for the UK stock market. Plus, the FTSE 100 finished strong on the last trading day of 2024, which set the tone for today’s solid start.

So, today’s better than expected rise in the UK stock market is driven by a mix of factors, which are solid economic data, strong sector performances and optimism about the economy going forward. However, since it’s the first trading day after the holidays, trading volumes may be lower than usual which could lead to higher market volatility.

In today’s market recovery, Rolls-Royce's stock price surged, significantly outperforming the FTSE 100 Index and becoming one of the key drivers of the market's strength. As a leading UK company, Rolls-Royce is not only a standout in traditional manufacturing but also a prime example of successfully transitioning into the AI industry. Its strong performance today highlights its leadership in tech innovation and industrial upgrades.  

As the technical pattern shown in the chart, above Rolls-Royce’s stock price successfully broke through the 21-day moving average, reversing the previous seven-day losing streak. This indicates a notable strengthening of bullish momentum. The stock is expected to consolidate briefly around the 21-day moving average before continuing its upward trend.  

Rolls-Royce’s strong gains once again prove that deeply studying industry trends and combining them with precise technical analysis is key to achieving higher investment returns.

Looking back at 2024, the UK stock market showed steady performance overall. The FTSE 100 Index rose 5.9% for the year, hitting a record high of 8,474.41 points in May. While this growth lags behind the US stock market, it’s the best annual performance for the UK stock market in the past three years, compared to the 0.9% and 3.8% gains in 2022 and 2023, respectively.  

The FTSE 100’s growth was mainly driven by two factors, the Labour Party's decisive victory in the general election and the Bank of England’s rate cuts. The political stability reduced policy uncertainty, boosting market confidence, while the liquidity eased by rate cuts supported corporate valuations. However, unlike the explosive growth in US stocks driven by tech innovation, the FTSE 100’s gains were primarily from stable contributions by traditional industries and commodities sectors.

Looking ahead to 2025, market sentiment remains optimistic for the UK stock market. Analysts widely believe the UK stock market is currently undervalued, creating room for further growth. The FTSE 100 is expected to reach 9,000 points by the end of 2025, a gain of about 10%. UBS has an even more aggressive forecast, predicting the index could climb to the 9,800–9,900 range. This potential growth would be driven by rising commodity prices, improving global economic conditions and a weaker pound.  

Even so, the UK stock market still faces some risks. If inflation pressure continues and forces the Bank of England to keep interest rates high, it could hurt stock valuations and economic growth. At the same time, falling commodity prices might also negatively impact the FTSE 100 index.

Last week, we compared the overall performance of the US stock market and UK stock markets. This comparison isn't meant to simply rate which is better, but to help everyone better understand how to find the best investment opportunities on a global scale. In 2024, the UK FTSE 100 index rose by about 5.9% for the year. While it showed stability amid geopolitical and economic uncertainty, at the same time, the US S&P 500 and Nasdaq Composite indices significantly outperformed, rising by more than 25% and 27%, respectively. Looking at the data, the overall gain of the US stock market was five times that of the UK stock market. This is not a coincidence, but a reflection of structural advantages.

This means that investing is not simply about putting money into the market, but about analyzing and comparing the characteristics and potential of different markets to find the avenues with greater growth potential. Why did the US market perform so well?

First, technological innovation is a key engine driving long-term US stock market growth. From the rapid development of generative AI to the accelerated adoption of electric vehicle technology and the large-scale application of clean energy, these emerging fields have not only created significant business value for companies but also become the core driving force behind the strong momentum in the capital markets. Secondly, US companies are more competitive and profitable in the global market and the flexible monetary policy and large consumer market provide strong support for continued capital inflows.

Of course, the UK market also has its unique advantages, with more stable fluctuations in both traditional industries and emerging tech sectors. However, compared to the US, its industrial structure is more focused on traditional sectors like finance and energy. While these sectors are stable, they struggle to match the explosive growth of tech-driven emerging industries. This comparison further proves that investors need to look beyond individual markets and take a global perspective when allocating assets to better seize long-term growth opportunities.

If we shift our focus from the overall market to specific sectors, the comparison becomes even more significant. Take the US market in 2024 as an example. The Dow Jones Industrial Average rose nearly 13% for the year, representing steady growth in traditional industries and blue-chip stocks. In contrast, the S&P 500 index rose over 23% and the Nasdaq Composite index climbed more than 27%. The gap between these indices shows that tech stocks significantly outperformed traditional industries. From this, it’s clear that the growth potential of emerging industries far exceeds the average level of mature industries.

Why can the tech industry continue to outperform the market? First, it's due to its growth elasticity, the tech sector is not only driven by economic cycles but can enter new phases of rapid growth due to technological breakthroughs and innovation. For example, in 2024, AI applications moved from the lab to commercialization, driving exponential growth in several areas, including chip manufacturing, cloud computing and big data. Secondly, the empowering effect of the tech industry on other traditional industries is also clear. Whether it’s smart risk control in the finance sector or automation upgrades in manufacturing, these examples show how deeply tech innovation is integrated into all sectors.

Additionally, investors’ confidence in the high valuations of tech companies is not just the result of short-term speculation, but stems from a deep understanding of future demand growth. The rise of electric vehicles, clean energy technologies and the metaverse further proves that tech-driven industries are the core pillars of the future economy. In contrast, traditional industries’ growth is often constrained by resource limitations, market saturation and weak demand. This inherent difference explains the disparity in performance between the two.

For investors, the performance differences across industries are not just a numbers game, but carry deep implications for investment strategy. These differences are directly reflected in investment returns and ultimately determine success or failure. Investors who can keenly capture market trends and strategically allocate in high-growth sectors often achieve returns far surpassing those of traditional industries, even multiplying their investments. This is not about luck, it’s about a profound understanding of market laws and a precise grasp of investment direction, choose the right track and you’ll beat the market.

However, high returns often come with high risks. Some investors may have concerns about the potential risks of high-growth sectors, worrying that investment returns may not be guaranteed. In response, we believe that risk is not uncontrollable, the key lies in using scientific and effective strategies to avoid and manage it.

To address this, we have developed and continuously upgraded a quantitative trading system specifically designed to solve this core issue. This system integrates cutting-edge AI technology, with outstanding data processing, pattern recognition and market dynamics prediction capabilities. It not only monitors market changes in real time but also identifies potential patterns in price fluctuations. More importantly, this system continually improves its prediction accuracy and decision-making efficiency through continuous learning and self-optimization.

After years of experience, we’ve incorporated rich market knowledge, historical patterns and advanced quantitative models into this system to provide strong decision-making support for investors. Under the premise of controlled risk, we strive to help investors achieve the best balance between efficiency and returns.

By taking the quantitative trading course, you’ll not only gain an in-depth understanding of how this system works and its core logic, but also learn how to efficiently use the system for real trading. This month, we’re officially launching the public beta of the quantitative trading system and we warmly invite all of you to participate. This is not just a rare opportunity for learning and practice, but also an important step in optimizing and upgrading the system.

The goal of offering this free course is to attract more investors to join the public beta, helping the system gather a wider and more diverse set of trading data. This will improve its features, increase the accuracy of the models and boost decision-making efficiency. Your participation will not only play a crucial role in improving the system, but also give you the chance to experience the unique advantages of AI-driven quantitative trading. You’ll be able to test and reinforce what you’ve learned, while significantly enhancing your personal investment skills and risk management abilities.

We believe that through this public beta, you’ll not only quickly adapt to AI-driven quantitative trading, but also find the trading strategy that works best for you in real practice. With the ongoing system improvements, you’ll be able to achieve more stable wealth growth. Ultimately, our goal is to help you maximize investment returns with manageable risks and stand out in the competitive market.

Taking this course and participating in the public beta is not only a key step toward more professional investing, but also an excellent opportunity to deeply integrate with AI quantitative trading technology. We look forward to your active participation and witnessing the power of this new tool together!

That’s all for tonight’s session. From the comparison of markets and industries, we’ve seen that the differences between various assets and sectors are crucial sources of profit in investing. The key is learning how to use these differences, through scientific cross-market and cross-sector allocations, to build a better investment portfolio that maximizes returns with controllable risk. Establishing this mindset is the key step for investors to move from following the crowd to maturity.

In the next lesson, we’ll dive into the tech industry, so you’ll clearly see the investment patterns for high-return assets. If you have any questions during the investment process, feel free to ask me anytime.

After tonight’s sharing, please think about:

1. What is the most important factor in determining returns in stock investment?

2. What is the purpose of this online course? What will participating students gain?