Back to December (FvF Ep. 164)

In the latest episode of Facts vs Feelings, Ryan Detrick, Chief Market Strategist, and Sonu Varghese, VP, Global Macro Strategist, dive into the sharp late-November market swings, why December historically favors gains, and how shifting Fed expectations have driven sentiment. They break down sector rotation, the surprising divergence between crypto and junk tech, the return of market breadth, and the growing possibility of reflationary growth into 2026. The conversation also covers rising unemployment data, an increasingly divided Fed, and how the accelerating AI investment race may continue fueling key parts of the market.

Key Takeaways

• Market Breadth Expansion: The advance-decline line hitting new highs shows the rally is widening beyond just mega-cap tech.
• Sector Rotation Strength: Technology lagged in November while healthcare, materials, staples, and financials helped offset the pullback—validating diversified positioning.
• Fed Rate-Cut Expectations Whipsawed: Odds of a December cut plunged below 30% before surging back above 80% due to rising unemployment, dovish Fed commentary, and Beige Book labor softness.
• Reflationary Growth View for 2026: Strong global commodities, resilient demand, and expected Fed easing support the case for reflation rather than recession.
• Crypto Decouples from Junk Tech: Bitcoin fell sharply while non-profitable tech surged, breaking a correlation that typically signals risk-on/off behavior.
• AI Spending Cycle Accelerates: Competition among AI leaders is driving massive capital spending—benefiting chipmakers, data centers, and related sectors.

Connect with Ryan:

• LinkedIn: Ryan Detrick

• X: @ryandetrick

Connect with Sonu:

• LinkedIn: Sonu Varghese

• X: @sonusvarghese

Questions about the show? We’d love to hear from you! factsvsfeelings@carsongroup.com

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