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Luke Kawa

Will gold keep leaving digital gold in the dust?

Gold is the best-trending asset in financial markets. The shiny metal hasn’t traded below its 200-day moving average since November 2023, and currently sits about 25% above that level. Not the S&P 500, nor the Nasdaq 100, nor even Nvidia can boast nearly as long of a positive streak.

And bitcoin, which has been called “digital gold,” certainly can’t either: in Q4, the crypto asset is behaving the opposite of gold, trading 20% below its 200-day moving average for the first time since Q4 2022.

Bitcoin has traditionally been a phenomenal barometer for assessing speculative vibes, which makes this year’s gap between its performance and that of fringier, unprofitable stocks amid a bevy of call buying even more befuddling. 2025 is poised to be the first year in over a decade that bitcoin has fallen relative to gold as the S&P 500 has increased. 

The ratio of bitcoin to gold hit its 2025 high the session after President Trump’s inauguration, and all-time peak in between the election and his returning to office. The idea that the “crypto president” catalyzed a “sell the news” dynamic for this pair at the start of his second term in the same way that “build a wall and Mexico’s going to pay for it” put in a pre-Covid top for USDMXN at the start of his first term looks fairly appealing, especially with a dearth of fundamental news available to explain crypto’s price gyrations.

1 BTC still = 1 BTC. But at its peak relative to the shiny metal, one bitcoin bought you more than 40 troy ounces. Bitcoin doesn’t weigh anything, strictly speaking, but it’s worth less than half its weight in gold now compared to then.

This ratio and its constituent parts are well worth monitoring into 2026, as they might shed light on whether bitcoin’s relationship with risk assets has changed in some enduring way, or if its major underperformance this year is a function of how strong returns were as it became apparent Trump would return to office in 2024.

Gold, meanwhile, remains worth keeping a close eye on as the strength and longevity of its march higher — reinforced by retail traders riding momentum, systematic strategies owning things that go up, and central bank buying — suggest that any break in this trend would require a meaningful shift in the investing or macroeconomic backdrop, and the fallout would extend far beyond the shiny metal.

For instance, based on data going back to 1975, the only time gold’s exceeded its current streak of trading above its 200-day moving average ended in 2011. That roughly coincided with the post-2009 intermediate bottoms for home building and banking stocks, which had been in a prolonged malaise even years after the post-financial crisis recession had ended.

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Luke Kawa

Will retail traders’ option-fueled market stampede keep accelerating?

Retail traders had a great year, because they bought the dip, stayed long AI stocks, rode momentum in precious metals, and took risky bets on speculative stocks that paid off.

Goldman Sachs’ baskets of retail favorites, high-beta momentum longs, and nonprofitable tech companies are all handily outpacing the S&P 500’s return year to date.

Retail trading activity is increasingly affecting how stocks trade on earnings releases and crowding institutional investors into their favorite stocks. It’s a force worth paying attention to.

The options market stands out as the place to go to monitor retail sentiment and desire to take risk. Call buying is a critical catalyst behind meme stock rallies and days when quantum computing companies go parabolic on absolutely zero news. The stock market can increasingly be viewed as a temperature check of companies whose long-term operational viability probably won’t be known for many years and whose near-term performance is governed by options with five days or fewer to expiration.

Obviously, not all calls are bought to open; many are sold as part of income-generating strategies. But you’d be hard-pressed to look at trends in call volumes and not see obvious parallels to the period that ran from the end of the pandemic-induced bear market to peak SPAC/GameStop in 2021. This was a stretch where speculative appetite was palpable, bankrolled by stimmies and inspired by Covid limiting most of everything else we’d want to do. We’re in the midst of a multiyear stretch of similar intensity.

So following this chart of median daily call volumes traded across US exchanges over the past three months will likely help answer a ton of questions, while raising others along the way:

Is the boom in speculative stocks still going strong?

If call activity is going down and key US stock indexes still go up, are retail traders really that important after all?

Are other opportunities for speculation (such as prediction markets) cannibalizing options activity?


Caveat: the increased availability of S&P index options, spreading to platforms like Robinhood, has definitely contributed to this boom, particularly for options with zero days to expiry.

(Robinhood Markets Inc. is the parent company of Sherwood Media, an independently operated media company subject to certain legal and regulatory restrictions.)

markets
Luke Kawa

Will Corporate America’s AI adoption justify the massive capital spending?

We don’t seem to live in a world where AI capex for capex’s sake is rewarded by investors anymore. Investors likely need to see increasing downstream adoption — that is, AI being used more and more in the field.

One problem with this is that surveys on Corporate America’s utilization of AI are all over the map; I’ve seen some in the low double digits and others in the neighborhood of 60% or more.

AI capex is both offensive — a bid to create new revenue streams and enable products that don’t exist — but also defensive, made by tech behemoths trying to ensure their existing dominant positions don’t get swept away by the tide of this new technology.

In many cases, Fortune 500 companies that want to implement — or, at least, dip their toe in the AI waters — don’t have a preestablished strategy or plan of action to do so. They need outside help for that.

Some good proxies for Corporate America’s willingness to spend on AI, therefore, can be found through consulting giant Accenture’s new bookings as well as IBM’s generative-AI book of business.

Accenture is in the business of helping companies “reinvent” themselves, a process that the consulting giant itself has had to undergo in light of how the industry has been rattled by the emergence of AI. And to do that, it’s turned to… AI, overhauling its work force, striking partnerships with OpenAI, Anthropic, Snowflake, and Palantir, and also buying a majority stake in DLB Associates, an AI data center engineering and consulting firm.

“We are expanding in these partnerships because of what we see in client demand,” CEO Julie Sweet said during Accenture’s December 18 earnings call. “We really try to be number one with all of the partners so that we can help our clients integrate and use these new technologies with their existing ecosystem, which is absolutely critical to them.”

Annoyingly, Accenture has decided that it won’t be breaking out AI-specific financial performance going forward, but that’s also a signal of how much management thinks this is integral to its overall growth.

And for IBM, AI-related consulting feeds through to other parts of its business, as its AI book of business also includes associated software revenues.

“Definitely the AI piece is a strong contributor to the software growth and I believe it’s a big piece of why consulting is beginning to return to growth, because we called the play to move toward AI almost two years ago,” IBM CEO Arvind Krishna said on the company’s most recent earnings call.

markets
Luke Kawa

Monitor credit-sensitive pockets of the stock market for a read on the US economy

At a very basic level, business development companies and regional banks are both in the lending business. And their borrowers aren’t generally the most creditworthy companies.

But two ETFs that track regional banks and these providers of private credit — KRE and BIZD, respectively — have charted different courses in 2025: the former flying and the latter sliding.

Since BIZD has a higher dividend yield than KRE, the stock price chart overstates the performance gap year to date — but it’s still immense, at nearly 20 percentage points through December 24.

There have been fair reasons for the divergence in 2025. One was the reversal of the conditions that sparked a regional banking mini-crisis in 2023: high interest rates, particularly for the longer-term bonds these institutions held on their balance sheets. The Fed’s easing cycle provides some relief for regionals from lower interest rates paid on deposits. 

And private credit has suffered its own face-plants: notably, the blowups of US subprime lender Tricolor and auto parts firm First Brands.

“I think more interesting for the private capital space is not the next ‘cockroach’ in private credit, but a changed backdrop,” tweeted Jon Turek, founder of global macro research firm JST Advisors. “Since the GFC, these firms have had the tailwind of either low cost of capital or high NGDP. That ‘either, or’ seems like a less clear bet going forward.”

If this is still the golden age of private credit, then why does the stock performance of those who provide it look so tarnished? Conversely, if US regional banks are hitting 52-week highs, how worried can we be about the domestic economy?

The performance gap in 2025 leaves us with those questions, and something to monitor going forward.

If 2026 is a world in which the US economy is healthy, inflation is still high enough to keep monetary policy more neutral than accommodative, and employment isn’t weak enough to demand lower rates, then these are two pockets of the market you’d expect to be doing pretty well. 

While idiosyncratic divergences can happen (and we’ve seen two in the past three years!), they certainly aren’t common. Any prolonged period of poor performance from either of these ETFs would likely speak to mounting worries about the health of the US economy, given their exposure to less-than-pristine borrowers.

markets
Luke Kawa

Nvidia strikes licensing agreement with AI inference specialist Groq

Nvidia reached an agreement to work with AI chip startup Groq to enhance its inference capabilities.

CNBC is calling this a $20 billion acquisition in cash, citing the top investor in Groq’s latest financing round (which valued it at roughly $6.9 billion in September). Groq’s press release on the matter, however, refers to this only as a “non-exclusive licensing agreement” and says “Groq will continue to operate as an independent company,” with no financial details provided. The lack of an official acquisition may be a bid to duck any potential antitrust concerns.

However, this is definitively an acqui-hire, as Groq founder Jonathan Ross and President Sunny Madra, as well as other members of their team, will be joining the chip designer “to help advance and scale the licensed technology.”

Inference is the “thinking” part of AI models — as opposed to training, which is more of the “learning.” Groq’s AI chips are LPUs (language processing units), distinct from GPUs (graphics processing units) or TPUs (tensor processing units). The company boasts that these chips “run Large Language Models (LLMs) and other leading models at substantially faster speeds and, on an architectural level, up to 10x more efficiently from an energy perspective compared to GPUs.” These products don’t need external high-bandwidth memory chips, which are facing a supply crunch, but rather use a different method of on-chip memory: SRAM, or static random-access memory.

Through this deal, Nvidia is likely looking to boost the efficiency of its AI solutions in a power-hungry (and scarce) world. It may also be viewed as a response to the success of Google’s Gemini 3 model, which utilizes TPUs that are also cheaper to operate than Nvidia’s GPUs. (In a fun twist, Ross, the Groq founder, was one of the architects of what would become Google’s first TPU during his time with the search giant).

“We plan to integrate Groq’s low-latency processors into the NVIDIA AI factory architecture, extending the platform to serve an even broader range of AI inference and real-time workloads,” Nvidia CEO Jensen Huang wrote in an email to employees, as reported by CNBC.

Good news for Groq is also good news for one of America’s most controversial and outspoken venture capitalists: Chamath Palihapitiya, whose Social Capital fund was an early investor in the company. Chamath’s SPACs have generally tended to go over like a lead zeppelin, but this investment is already a massive winner.

CHICAGO, ILLINOIS - DECEMBER 21: Chicago Bulls mascot Benny the Bull is dressed for Christmas as the Bulls take on the Orlando Magic at the United Center on December 21, 2018 in Chicago, Illinois.

The S&P 500 closes at a record high for the 39th time in 2025

Tasha Matsumoto12/24/25

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