The Monday Morning Playbook: Week of December 15, 2025

Good morning,

I run ETF models to help express our technical views and highlight which bets we want to take in this market and which we don’t.

And frankly, we’ve had some bets that just haven’t panned out in December. We’ve been underweight financials (improving in relative terms and just hit a new all-time high), overweight utilities (made a 52-week relative low last week), and maintained an out-of-benchmark bet on China (outright lower since our last trades on December 2).

But none of that has mattered because of one thing: We’ve had less technology than the benchmark.

Both models have handily outperformed their benchmarks since our last trades on December 2.

And it’s not just the outright underweight to the tech sector. It’s an additional underweight to the top tech stocks.

The latter is unintentional, and in the past, has been a headwind that we’ve talked about. Because of the rules governing ‘40 Act Funds, tech sector ETFs like XLK and VGT have to cap the weights of their top stocks to less than the true underlying weight in the S&P 500 Information Technology Sector Index.

Right now, that’s a tailwind, and a big one at that. I’m calling the trade: ABBT, or Anything But Big Tech.

That’s what’s working right now, and that’s how tactical investors should be positioned.

I don’t know how long it will last. I don’t know how much downside the top tech stocks could have. Today’s report will highlight some of the most important risks, but it’s hard to imagine those stocks completely falling apart while new highs are expanding and the SPX advance-decline line is at new highs.

For now, both cyclicals and defensives are benefiting from the rotation, and money is flowing out of big tech and into them. Unless it becomes just defensives (or starts to become cash and bonds), investors should think of this as a relative strength story and not something more ominous.

This week’s report will review:

• The Friday sell-off

• Important perspective on last week

• The ABBT (anything but big tech) trade

• Why cyclicals hold the key to the broader market call

• Seasonality vs. sentiment

• Rates and the dollar

• Commodities

• and more!