December 10, 2025

 

(FED GOVERNOR POWELL OWNS THE STAGE TODAY)

 

December 10, 2025

 

Hello everyone

 

Welcome to what might be a ‘hawkish cut’

Even though the Fed is expected to cut rates at this meeting, the central bank may signal that we will see only one cut next year as inflation concerns remain.  Therefore, any future commitment to monetary action appears unlikely.   Fed funds futures traders are pricing in the next rate reduction after Wednesday to not come until April, the CME Group’s Fed Watch tool shows. 

The 10-year U.S. Treasury note yield has jumped around 14 basis points in December.  The S&P500, meanwhile, is flat month to date. 

So, how will the S&P500 react to the Fed rate decision/commentary?

Perhaps a rally into year-end?

How so?

The government shutdown is over – data is now fully visible.

The U.S. economy remains relatively healthy and has pent up demand, particularly in the housing sector.

Fund managers may chase performance into year end, as the November sell-off may have caused many funds to retreat.  Many fund managers have been bearish for much of 2025. 

Don’t forget the season.  December usually finishes strong, and with the sell-off in November, December could show an even stronger finish.

Silver has been on a surge, but what about gold?

Silver has performed well lately.  If you are holding (SLV), watch it closely, as silver is starting to look stretched. However, a push up to around $58.51 in (SLV) is possible. If you hold the stock, make the most of profits by creating a ladder of take profit (TP) entries.  There is always the possibility that (SLV) won’t reach that ultimate target. In other words, it could correct lower and rest a while before embarking on another rally.

 

 

(SLV) daily chart ($55.17)

 

(SLV) 4 hourly chart ($55.17)

 

Gold has stalled a little in the last month but should come to the party in the next few weeks and resume its move back to all-time highs.

(GDX) looks attractive as a buy and a trade.  If you own (GDX), hold the stock.  (GDX) the VanEck Gold Miners ETF has formed a giant triangle formation in recent weeks.  This (GDX) pattern could be resolved by a push back to new all-time highs into year-end, coinciding with Gold pushing back to new highs to join Silver.

Any weekly close back above $84 area from the current $81.94 close should result in GDX pushing higher up to near $90-$92~.

On the downside it would take a break of $76 to postpone the rally in the Gold Mining names.

And if you would like to consider an option, you might like to enter this trade.

1/ 83/85 (GDX) out of the money (OTM) bull call spread at $0.70 or best.

Buy 83 calls

Sell 85 calls

Max Profit = 130

Max Loss = 0.70

Expiry = Feb. 20, 2025

All the option trades illustrated are for one contract.  (Your choice if you want to add more)

 

 

(GDX) VanEck Gold Miners ETF ($81.94)

 

Nvidia is not the only chipmaker

Taiwan Semiconductor Manufacturing is a steady way to play the AI rally.  The noise about bubble speculation over AI spending does not dig deep into the narrative around AI.  According to F.L. Putnam Investment Management chief market strategist and portfolio manager Ellen Hazen, the amount of spending going into the new technology needed for AI is not comparable to the scale of historical tech bubbles, such as the dot-com bubble of the late 1990’s and the railroad boom and bust during the 1840’s.

Furthermore, Hazen argues that most AI deals are not being funded by debt, and tech valuations have mostly been powered by strong earnings growth. 

TSMC produces semiconductors for tech companies such as Nvidia, Apple and Advanced Micro Devices, which design their own chips but do not manufacture them.  The stock has soared more than 52% this year on the back of strong AI demand.

In the third quarter, the company’s high-performance computing division, which encompasses artificial intelligence and 5G applications, accounted for 57% of TSMC’s revenue and made up the biggest chunk of its quarterly sales. 

You can see in the weekly chart here that the stock has had a shallow correction to the 236 Fib. Area.  It has respected that price zone and bounced off strongly.  Though some churn might appear this week due to the Fed rate announcement and commentary, I believe (TSM) will continue to remain bullish into year-end and early into the new year.

Option to consider:

1/ 310/320 (TSM) OTM bull call spread at $3.91 or best.

Buy 310 call

Sell 320 call

Max Profit = 609

Max Loss = 391

Expiry = Feb. 20, 2026

All option trades illustrated are for one contract.  (Your choice if you want to add more)

 

 

(TSM) weekly chart $303.41

 

 

QI CORNER

Christian H. (AI Operator)

The U.S. has found a new buyer for its debt: stablecoins.

In the last 12 months, stablecoin issuers bought $41B of U.S. debt.

That’s more than Switzerland, Germany, or Taiwan over the same period.
And here’s the wild part:

This demand isn’t driven by macro traders or sovereign funds. It’s driven by users minting digital dollars.

Every new stablecoin minted must be backed 1:1 with safe, liquid assets.
Which means stablecoin adoption = built-in Treasury demand engine.

This is no longer a “crypto tool.”
Stablecoins are turning into a structural pillar of the global USD system.

And they’re about to bulldoze fintech:

– Klarna announced KlarnaUSD
– Stripe is integrating stablecoins across their products
– PayPal’s PYUSD has tripled since September
– Western Union is launching one in 2026

Hundreds more are coming
Most will fail.

A few will become trillion-dollar global rails.

U.S. Treasury forecasts $3T in stablecoin supply by 2030. If most are USD-backed, that becomes trillions in incremental demand for U.S. debt.

Stablecoins might become one of America’s most powerful tools for exporting Dollar dominance without Congress passing a single law.

A decentralized, market-driven expansion of USD power… built by fintechs, exchanges, remittance companies, and eventually banks.

If stablecoins become the fastest-growing buyers of U.S. Treasuries…
is the U.S. quietly gaining a new monetary superpower or outsourcing one?

 

 

 

SOMETHING TO THINK ABOUT

 

Cheers

Jacquie