Market leadership is shifting toward financials, industrials, and materials as global breadth improves and inflation linked sectors gain strength. Precious metals, copper producers, and diversified miners are breaking out, supported by rising commodity prices and renewed liquidity. International markets continue to outperform in many regions, and cyclical sectors are showing healthier technical setups than defensive, rate sensitive groups.
Technology remains mixed, with semiconductors leading while software lags. Overall breadth has rebounded from its November lows, and portfolios are positioned toward the sectors showing the strongest momentum, with reduced cash and increased global exposure. The market appears resilient heading into year end, though upcoming Fed communication is a near term variable to watch.
Key Points:
Financials and Industrials Are Leading the Market
- Financials continue to perform strongly with excellent breadth globally. Industrials, including aerospace, heavy equipment, and drilling companies, are showing renewed momentum and appear positioned for secondary breakouts.
Materials and Precious Metals Are in Strong Uptrends
- Gold, silver, and related miners have broken out or are close to doing so. Copper producers and diversified miners are also performing well, supported by rising commodity prices and inflationary conditions.
Inflation-Linked Sectors Are Outperforming
- Sectors that benefit from inflation — financials, materials, energy, and industrials — are leading. These groups have built strong technical profiles while defensive rate-sensitive sectors (utilities, REITs, consumer staples) continue to lag.
Market Breadth Has Improved Sharply
- After deteriorating through October and mid-November, breadth has strengthened across most sectors. The average percentage of stocks in uptrends has risen from the high 30s to the mid-40s, signaling healthier underlying market conditions.
Technology Leadership Is Narrowing
- Tech is mixed: software remains weak, while semiconductors (Broadcom, Nvidia, Lam Research) are the main sources of strength. The sector overall has not made new highs and is no longer the only leadership group in the market.
Portfolios Favor Cyclical and Global Exposure
- Portfolio weightings emphasize financials, materials, industrials, and select technology and energy positions. Cash has been reduced as opportunities emerged. International exposure continues to be a major contributor, especially with global markets outperforming the US in several cases.
- Surge, emphasizing dividend protection, dividend growth, and value-oriented sectors.