Chapter 1639: Uncertain Future

The day after explosive news broke from both sides of the Pacific.

January 2015, 1, New York.

The winter sun shone through the gaps between the skyscrapers, sprinkling sparingly on the flagstones of Fifth Avenue.

However, for West Richard, a senior portfolio manager at Morgan Stanley, the sunshine not only failed to improve his mood, but made the gloom even heavier.

No investor likes to deal with such unpredictable black swan events.

However, even though he graduated from Harvard University, joined this world-renowned investment institution and worked his way up to middle and senior management, he is definitely a standard American elite.

But it is still impossible to know everything in advance like those real big shots.

"It's really unlucky...it happened at this time."

Richard shook his head and complained as he stopped in front of an unremarkable door.

It's a membership club for Morgan Stanley investments.

A place that can isolate you from the noise of the outside world, but where you can't really escape from the center of the storm.

Swipe the card, verify your identity, and the elevator rises silently.

The heavy walnut door opened under the silent guidance of the waiter.

Richard's classmate and colleague Rosen David was already sitting in the box and seemed to have been there for some time.

The table was set with exquisite silver tableware, grilled cod with black truffles, French baked snails, and a bottle of Bordeaux first growth wine that had already been awakened, the aroma overflowing.

David raised the glass in his hand towards him, but his face didn't show much of the festive relaxation that should have appeared on his face.

"Happy New Year, West."

There was undisguised exhaustion in David's voice.

"Happy? Forget it..." Richard took off his cashmere coat and handed it to the waiter. He untied his meticulously crafted tie and sat down across from David. "Honestly, I just hope the exchange's servers don't get overwhelmed by panic orders tomorrow."

He symbolically cut a small piece of cod and put it into his mouth, but the deliciousness of the top-quality ingredients now tasted like chewing wax.

I even had to take a big gulp of red wine to try to suppress the dryness in my throat.

"Fill your stomach first. The eye of the storm may not have truly arrived yet." David wiped the corner of his mouth with a napkin. His movements were the same as usual, but the solemnity in his eyes betrayed him. "Last night... or rather, early this morning, how was things going over there? The clients were furious, weren't they?"

"It's like a volcano erupting." Richard smiled bitterly.

He put down his wine glass and rubbed his swollen temple with his free left hand.

"Several of our largest institutional clients, from Silicon Valley VCs to Boston pension funds, held a conference call until 3:30 a.m. Questions, panic, demands for emergency risk hedging plans... The core question was: Will the semiconductor sector experience a circuit breaker when the market opens tomorrow? Should we run? Where should we run?"

The New York Stock Exchange will stop trading on New Year's Day.

But anyone with a brain would know that the stock market is likely to face a bloody storm after it opens tomorrow.

It's normal to worry.

"Did you watch today's news?"

David suddenly changed the subject.

Richard shook his head. "It was almost dawn when I got home, and I had no time to think... I just checked my phone notifications on the way here, and there didn't seem to be anything new... It seems very quiet over in China."

Then he paused again, with a hint of uncertainty:

"Do you have... inside information?"

David couldn't help but roll his eyes. "We're all from the same company. Isn't my source your source? Besides, if I really had inside information, I wouldn't have to ask you out..."

He put down his knife and fork, took out a few neatly folded newspapers from the briefcase at his feet, and pushed them in front of Richard:

"Take a look at these. I came here early in the morning."

Richard took it with some confusion. The top one was the Wall Street Journal. The front page headlines were "China's hypersonic breakthrough shakes the Pentagon" and "Washington imposes a 'nuclear option' ban." The content was an in-depth report and analysis of two major events of the previous day, filled with expert comments and sensational words such as "game changer" and "unprecedented risks."

He quickly read through it and opened the second copy.

The New York Times.

The tone is similar, but the focus is more on analyzing the far-reaching impact of the ban on the global technology industry cooperation model.

Next came two English-language Chinese newspapers: the Huaxia Daily and the Donghua Morning Post.

The front page of the former is a high-definition photo of the "Zou Yu" taking off into the sky, with the title "my country's hypersonic technology achieves a historic leap."

The following is an interview with a spokesperson for the Industrial and Construction Commission, which emphasizes that this is a major advancement in the peaceful use of space technology and does not involve military purposes.

The inside pages are even more explosive, with the headline "Brutal Behavior Exposes the Nature of Hegemony". The editorial denounces the US for abusing non-market means, undermining market rules, and hindering global technological progress. The wording is tough but no specific countermeasures are announced.

The content of the latter is basically the same, but the front-page headline is more targeted.

"Technology ban backfires, Chinese technology soars"

Richard carefully read each newspaper, his brows furrowed more and more:

"Why is it all yesterday's news?"

He raised his head and looked at David, his eyes full of confusion:

"It's been 24 hours! The ban has been in effect for most of the day! Are both sides... silent?"

"That's the problem!" David tapped the table with his fingers, making a soft thud. "Yesterday it was like the sky was falling and the earth was collapsing. The whole world was reporting on it, but now after a good night's sleep, it's like both sides have hit the pause button... The Chinese haven't announced any specific details of their response measures, and we're also very quiet here..."

"New Year's Day public holiday?" Richard almost blurted out.

But then he shook his head: "No, this can almost be considered a war without weapons, so... I'm afraid it's not because of the rest day, but because he is preparing for a big move."

"That's exactly what I'm most worried about." David leaned forward and lowered his voice. "The market hates a vacuum the most. Whether it's panic or greed, it needs a clear signal to trigger. Without new information, emotions will propagate on their own. And our sophisticated models are vulnerable to true 'gray rhinos'."

He picked up the Donghua Morning Post and pointed to the strongly worded editorial:

"Look at this. No matter how much they criticize, it's just words. No reciprocal measures have been announced... No one knows where the first lightning will strike. We must provide our clients with a hedging strategy that is as reliable as possible a few hours before the market opens."

Richard nodded in agreement and drained his glass.

The spicy feeling rushes straight to the throat, bringing a brief sense of clarity.

"This time...Washington chose the worst possible time and used the stupidest possible method."

I don't know if it was because of the alcohol or the relatively closed environment, but in any case, his words became more and more bold:

"'Future Industry 2025,' 5G, artificial intelligence... the capital market had just begun pricing in the next technological explosion cycle, and the mood was high. Then, a bucket of cold water was poured down, and it was the kind with sharp ice chips. Now the entire sector is shrouded in a huge cloud of uncertainty. Who would dare to bet rashly?"

After saying that, he rubbed his eyebrows and sighed again.

"We can't influence the considerations of the bigwigs, Richard."

David did not complain, he was more concerned about the reality:

"My only concern now is one thing: how can we explain to our investors tomorrow and in the days that follow? How can we protect their assets from being drastically reduced in this storm? We must come up with a viable strategy."

Richard took a deep breath, sat up straight, and his eyes regained the sharpness and calmness of a professional investor.

"Based on the information currently known: First, Huaxia officials, Juchang, and Huaxing have all clearly promised to honor the contract and deliver products on schedule. This at least indicates that they have inventory on hand, or they can obtain key chips through some unknown channels. In short, in the short term—I mean one to two months—business will not be immediately suspended."

"Secondly, and most crucially, no matter how much China protests, from a technical perspective, without ASML's EUV lithography equipment, they simply cannot mass-produce advanced chips at 7nm and below. This is determined by the laws of physics and industrial realities, as Wenkkonen said on CBS."

He paused, gathering his thoughts:

"So my judgment is: short-term impact is inevitable. With the loss of the huge Chinese market, coupled with the expected disruption to the global supply chain, the semiconductor sector, especially those companies highly dependent on sales and foundry business in China—Qualcomm, Broadcom, some equipment manufacturers, and foundry giants like TSMC—will inevitably face huge selling pressure when the market opens tomorrow."