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*                       FIEND'S SUPERBEAR MARKET REPORT                     *

*                                December 12, 2025                          *

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*                       e-mail: fiendbear@fiendbear.com                     *

*                    web address: http://www.fiendbear.com                  *

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Fiend Commentary

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Record Dow, Raging Silver, Slipping Dollar: Markets Send Mixed Signals

U.S. risk assets keep pushing higher, but the “message” from cross‑markets is getting more complex.

Stocks: new highs, but leadership is shifting

Thursday’s close delivered fresh records for the big benchmarks: the Dow jumped 1.34% to 48,704.01 and the S&P 500 edged to an all‑time closing high of 6,901.00—while the Nasdaq slipped as investors continued to question the durability (and valuation) of the AI-led trade.

 

The important texture here isn’t just “new highs”—it’s how we got them: strength in more cyclical areas like financials and materials versus softer performance in parts of tech.

 

Metals: silver is acting like a scarcity + reflation hedge

Silver has become the loudest signal in the room. Spot silver is hovering in the mid‑$60s—around $63–$64—and just under Thursday’s record near $64.31, keeping $65 in view.

 

The narrative drivers are lining up: tight physical conditions, industrial demand, and the market’s renewed desire for “hard” hedges as policy turns easier and the dollar softens.

 

FX: the dollar is heavy near 98

The U.S. Dollar Index (DXY) has been weak around ~98.3 (roughly 98.33–98.34 in the latest readings), which is providing a tailwind to commodities and anything priced in dollars.

 

Rates: yields won’t fall in line (yet)

Here’s the wrinkle: bond yields remain sticky-to-higher even after the Fed cut, which is why the “financial conditions are easing” story has to be handled carefully.

  • The Fed cut 25 bps on Dec. 10, taking the fed funds target range to 3.50%–3.75%.
  • At the same time, the Fed formally moved toward adding reserves via purchases of Treasury bills (and, if needed, other Treasuries up to 3 years) to keep reserves “ample,” plus shifting reinvestments into bills.
  • Despite that, the 10‑year yield has been hanging around the mid‑4% area (~4.16% on Dec. 12) and recently popped to ~4.21%—a three‑month high—highlighting that the long end is being driven by more than just the policy rate.

 

Why would yields trend higher into/after cuts + balance‑sheet buying? Because the long end is increasingly about term premium and fiscal/inflation uncertainty—the market demanding compensation for duration amid debt supply, policy uncertainty, and inflation risk.

 

Also worth noting: the Fed’s bill purchases are best understood as reserve management, not classic QE aimed at suppressing long‑dated yields—though it can feel QE‑like in markets (and politically) because it’s still balance‑sheet expansion.

The takeaway

Right now the tape looks like a “risk‑on + real‑asset hedge” mix:

  • Equities celebrate easier policy and broader participation (cyclicals improving).
  • Metals price a weaker dollar and renewed hedge demand.
  • Bonds refuse to fully validate the “easy money = lower yields” playbook, implying the market is still uneasy about the longer‑term inflation/debt backdrop.

What I’d watch next

1.     Follow-through in cyclicals vs. a rebound in megacap/AI—this will tell you whether the rally is broadening or just rotating.

2.     The 10‑year yield: if it keeps pressing higher while stocks rally, that usually tightens the screws on “long duration” equity leadership.

3.     Evidence of reserve stress (repo/short‑end conditions) now that bill purchases are becoming part of the operating framework.

 

 

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