Week of Dec 20, 2025
Records eclipsed, but fatigue sets in.
The Dow and S&P 500 hit fresh records mid-week before retreating. The week ended with a "Triple Witching" volatility spike, leaving the S&P down 0.6% for the week despite Friday's rally.
As expected, the Fed cut rates by 25 bps to 3.50%-3.75%. However, 3 members dissented—the first major split in years—signaling the "easy cuts" are over.
WTI Crude crashed 4% to ~$56. Supply glut fears are dominating despite geopolitical noise.
Friday Close (Dec 19)
Rates: 3.50% - 3.75%
Tech rebounds, Defense surges.
TikTok JV deal rumors fueled a massive Friday rally.
Micron earnings blew past estimates. AI memory demand is insatiable.
Defense stocks rose on geopolitical tension in the Arctic.
Retail and Energy get crushed.
Warned of China sales decline. The turnaround is stalled.
Oil's drop to $56 hammered the entire energy sector.
The star of 2025.
Despite the BOJ hiking rates to 0.75% this week, Japanese equities remain the global leader for 2025.
Yen strengthens as rate gap narrows.
A tale of two assets.
Near all-time highs ($4,398). Safe-haven demand remains robust amid geopolitical friction.
Oversupply concerns outweigh Middle East tensions. "Drill, baby, drill" policies are flooding the market.
The $100k dream lives on.
Bitcoin Price
Dec 22 - Dec 26
Expect extremely low volume. Algorithms will dominate price action. Flash crashes possible.
Down from "Extreme Greed" (78) last month.
"Be fearful when others are greedy."
Tactics for 2026.
Tech is crowded. Smart money is moving into Healthcare and Industrials which benefit from the "re-shoring" trend and lower rates.
With the 10Y yield at 4.15%, lock in yields now. The Fed is slowing down, but rates will likely settle lower (3.0%) by 2027.
If the Dollar weakens in 2026 (as expected), Emerging Markets (ex-China) could outperform US Large Caps. Look at India & Vietnam.
VIX (Volatility) Awakening
Major moves this week.