Focus: US

Market Close: Fri, 26 December 2025

Weekly Insights

Quantmatix US Sector Research Note

Market Verdict 

Compared to last week's report, acceleration stays strong above 75% in key sectors, pointing to ongoing chances—low regimes offer early gains while high regimes show steady strength—with regime boosts in financials and materials (e.g., banks from 66% to 82%) supporting market shifts.

Conviction Overweights

• Banks (5 Dec, Positive Reversal): 94% of stocks speeding up positively vs 82% in positive trend (mature positive), 1 positive reversal/2 negative; regime up from 66% last week. Driver: Regional banks outperformed in 2025 with +19.2% YTD returns, surpassing broader financials and the S&P 500.
• Materials (26 Dec, Positive Reversal): 92% of stocks speeding up positively vs 72% in positive trend (mature positive), 20 positive reversals/0 negative; regime up from 65% last week. Catalyst: Basic materials led S&P 500 sectors with +39.6% YTD gains in a value rotation.
• Consumer Services (No recent, Mixed): 84% of stocks speeding up positively vs 42% in positive trend (Bullish Surge, early inflection), 5 positive reversals/1 negative; regime stable. Trigger: "Ugly house, new roof" setup positions for rapid positivity in consumer areas amid resilient spending.

Bullish Surge sectors, such as Consumer Services, Commercial & Prof Services, Diversified Financials, and Real Estate Mgt. & Serv, represent early moves with high acceleration but low current positive trends—they are important for capturing rapid gains as momentum builds, though their early stage may involve higher volatility until trends stabilize.

Conviction Underweights Sectors

• Energy (26 Dec, Negative Reversal): 65% decelerating vs 69% in positive trend (Bear Plunge), 2 positive reversals/20 negative. Context: The S&P 500 Energy Sector posted a modest +5.1% YTD performance amid supply dynamics.
• Pharma, Biotech & Life (19 Dec, Mixed Reversals): 55% of stocks speeding up positively vs 57% in positive trend, 15 positive reversals/10 negative, 0 positive exhaustion/3 negative; regime down from 74% last week. Context: Biopharma ended strong with XBI up 35%, its best since 2020, despite policy pressures.
• Utilities (21 Nov, Negative Reversal): 86% decelerating vs 43% in positive trend, 1 positive reversal/3 negative; regime down from 54% last week. Context: Utilities kept pace with the S&P 500 in 2025 but lost defensive appeal amid AI-driven shifts.
• Tech Hardware & Equip (10 Oct, Declining): 62% decelerating vs 38% in positive trend, 4 positive reversals/0 negative; regime stable near 40% last week. Context: Tech hardware volatility persisted despite a 25% sector rise YTD.

Bear Plunge sectors, such as Energy, represent early warning signs with high current positive trends but strong deceleration—they are important for timely exits to lock in gains, though their established phase may offer short-term stability before potential downturns.

Caution Flags: Energy's high regime with high deceleration flags "Bear Plunge"—aggressively lock in gains and rotate; pharma's regime decline suggests watching for exhaustion.

Neutral / Hold Insights:

• Health Care Equip & Serv: 54% of stocks speeding up positively vs 57% in positive trend (ratio 0.95), 9 positive reversals/6 negative – Hold, mixed setup calls for steady caution.
• Semis & Semi Equip: 49% of stocks speeding up positively vs 54% in positive trend (ratio 0.91), 3 positive reversals/0 negative – Hold, near balance limits upside.
• Automobiles & Components: 57% of stocks speeding up positively vs 52% in positive trend (ratio 1.1), 1 positive reversal/0 negative – Hold, modest edge in stable trends.
• Household & Personal Prod: 54% of stocks speeding up positively vs 39% in positive trend (ratio 1.4), 1 positive reversal/0 negative – Hold, gradual positivity with short runway.
• Telecomm Services: 50% of stocks speeding up positively vs 45% in positive trend (ratio 1.11), 0 positive reversals/1 negative – Hold, lacking reversal fuel.
• REITs: 51% of stocks speeding up positively vs 77% in positive trend (ratio 0.66), 6 positive reversals/3 negative – Hold, lost momentum despite reversals