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*                       FIEND'S SUPERBEAR MARKET REPORT                     *

*                                  January 5, 2026                          *

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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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2025: The Year of Backstops, Bubbles, and Broken Price Signals

If you had told anyone a year ago that 2025 would feature (1) a trade-policy shock big enough to knock markets off their feet, (2) a prolonged government shutdown that literally blacked out key economic data, and (3) gold and silver going vertical anyway… most people would have laughed.

Yet that’s exactly what happened. And the biggest takeaway isn’t “markets are irrational.” It’s that 2025 was a year where liquidity, policy, and leverage repeatedly overwhelmed traditional “cause and effect.” Fundamentals still mattered—but often only after price moved.

Below is the clean recap (with a few conclusions you can actually use).

1) The Big Story: Easy Credit Became the Economy’s Operating System

By the end of 2025, it felt like the U.S. economy wasn’t being “run” so much as kept running—with credit, refinancing, and policy backstops acting like the plumbing that everything depends on.

When credit is abundant, almost anything can look healthy:

  • Stocks levitate on valuation expansion and buy-the-dip behavior.
  • Businesses fund capex (especially AI) even if the payoff is unclear.
  • Consumers maintain spending longer than expected—even while confidence slumps.
  • Weakness is treated as “good news” because it pulls the Fed toward easing.

But the darker implication is obvious: if something interrupts the flow of easy credit—funding stress, a spike in long yields, a policy error, a genuine recession—then the “support beams” get exposed quickly.

2) Stocks: Another Strong Year… With an Asterisk the Size of Nvidia

U.S. stocks ended 2025 with big gains despite a rollercoaster year:

  • S&P 500: +16.39%
  • Nasdaq: +20.36%
  • Dow: +12.97%
  • Russell 2000: +11.26%

The market’s personality in 2025 can be summed up as:

  • “Concentration with confidence.”
  • AI/mega-cap leadership stayed dominant.
  • Retail participation was a major force, especially during selloffs.

The “asterisk” is that so much of what people call “the market” was really a handful of mega-caps with AI optimism doing the heavy lifting. A market can feel healthy while quietly becoming more fragile underneath—because breadth and resilience aren’t the same thing.

3) The Fed: Cutting Rates While Ending QT (and Signaling the Next Step)

The Fed’s 2025 pivot was not subtle:

  • It delivered a rate cut on Oct. 29 (25 bps).
  • It announced it would end balance-sheet reduction (QT) starting Dec. 1.
  • By year-end, the Fed’s balance sheet was still enormous—about $6.64 trillion—well above the pre-pandemic neighborhood.

Call it what you want—“not QE,” “liquidity management,” “balance-sheet stabilization”—but the practical message markets heard was simple:

“The tightening era is over. The backstop is back.”

That matters because it changes behavior. When investors believe liquidity will be added whenever stress appears, risk-taking becomes the default setting.

4) Bonds and the Dollar: When the Long End Doesn’t Cooperate, It’s a Warning

The bond market delivered an important reminder in 2025: the Fed controls the front end, not the narrative.

  • The 10-year yield ended the year around 4.18%.
  • The long bond had a wild year, with the 30-year yield spiking above 5% during the year before easing back.
  • Meanwhile, the U.S. dollar fell roughly 10% over 2025.

A softer dollar alongside roaring precious metals and volatile long yields is the market whispering something uncomfortable:

“We’re not fully buying the long-term stability story—fiscal, monetary, or both.”

It doesn’t mean collapse is imminent. It means confidence is no longer “free.”

5) Inflation and the Real Economy: The Data Was Messy… and Then the Data Went Missing

Inflation cooled at times, but it never convincingly returned to “problem solved.”

  • CPI readings were still being watched closely, especially because the market’s rate-cut faith depended on it.

Then came the “twist” you almost never see:

  • A 43-day government shutdown disrupted or delayed major data releases.
  • The Labor Department even canceled the full October employment report because the shutdown prevented proper data collection.

This created an odd environment:

  • Markets could rally because bad news wasn’t confirmed.
  • The absence of data became part of the bullish narrative—“no news is good news.”

But the shutdown also created pent-up risk: when the backlog clears, markets can get surprised all at once.

6) Metals: The Loudest Signal of the Year (Even When Nobody Wanted to Hear It)

Gold and silver weren’t just strong in 2025—they were loud.

  • Gold finished the year above $4,300/oz and posted a gain roughly in the two-thirds range.
  • Silver ended around $70–$72/oz and posted a gain roughly in the “more-than-doubled” category.
  • Silver also briefly traded above $80 late in December.

This wasn’t just “inflation hedging.” The speed and scale looked more like:

  • Confidence hedging
  • Policy hedging
  • Currency/fiscal hedging
  • and, yes, momentum once the breakout became obvious

The most important point: metals moved as if the next cycle of stimulus/liquidity was not a question of “if,” but “when.”

7) Bitcoin: A Different Animal in 2025

Bitcoin did what it often does in a year with policy drama and risk-on/risk-off whiplash:

  • It surged earlier in the year, hit a record high in October, and then slid hard.
  • By year-end it was on track to finish 2025 down more than 6%.

That divergence matters. In 2025, gold and silver acted like “monetary distrust” trades, while bitcoin traded more like a high-beta risk asset tied to shifting liquidity expectations.

8) A Quick Taste of 2026 Risk: Geopolitics Is Heating Up Again

Just as markets try to glide into the new year, geopolitics is throwing sparks:

  • U.S. forces captured Venezuela’s Nicolás Maduro in an operation, per reporting.
  • Iran is seeing its largest protests in years, driven by inflation and economic stress, with deaths reported.

We’ll dig into those later this week, but here’s the key connection: geopolitics tends to matter most when markets are already priced for perfection.

Bottom Line

2025 wasn’t “the year everything broke.”
It was the year we learned how much of the system is built on the assumption that liquidity will always be available when needed.

Stocks proved resilient.
The Fed pivoted dovish.
The dollar softened.
Bonds stayed jumpy.
And metals acted like they were pricing a future where money is easier, debt is heavier, and policy is more reactive.

A 2026 forecast deserves its own piece—but 2025 left a very clear setup: the gap between asset prices and underlying economic confidence got wider, not narrower.

 

 

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