Santa rally favors tech, crypto and gold, says Fed Watch's Ben Emons

Market Sentiment and Asset Performance - The VIX is currently at its lowest level for 2025, indicating a potential risk-on rally, with Bitcoin being highlighted as a possible beneficiary in the upcoming week [1] - Bitcoin is expected to perform well towards the year-end, especially if liquidity returns to the market, as it has underperformed compared to gold, which is reaching new record highs [2] Technology Sector Insights - Nvidia is noted for its strong performance, being the best stock on major indices due to its ability to ship H200 chips to China next year, which is expected to positively impact the chip sector [3][5] - The chip sector is viewed as a key area for investment, with companies like Micron and AMD also positioned favorably alongside Nvidia [5] Federal Reserve and Economic Indicators - Recent GDP reports have exceeded expectations, but inflation remains a concern with the PCE number at 2.9%, complicating the Fed's decision-making regarding interest rate cuts [6][8] - The market appears to desire rate cuts, but the Fed is expected to be cautious in the first half of next year, potentially leading to volatility in both the bond and equity markets [10][12] Investment Alternatives - Gold is suggested as a viable alternative to bonds, particularly in the context of anticipated volatility in the long end of the bond market due to uncertainties surrounding the Fed's actions [13]