The setup for stocks into year-end

Market Overview - The market's personality has shifted, becoming more complicated and idiosyncratic, with a focus on reasonable valuations rather than just thematic trends like AI [2][8] - Recent market action indicates a potential challenge to previous all-time highs, with broad-based participation across sectors [3][5] Sector Performance - Healthcare has emerged as a leading sector, performing well since August and being the best-performing sector this quarter, with an increase of over 10% this month [9][12] - Other strong sectors include materials and consumer discretionary, while technology has seen a decline in leadership [7][10] Investor Sentiment - Investors are currently seeking more attractive valuations and opportunities for beta, indicating a shift in focus from high-growth tech stocks to sectors with reasonable valuations [8][12] - The recent outflows from tech stocks have reached four-year extremes, suggesting a cautious approach among investors [10] Future Outlook - The market is setting up for a strong January, which is typically a favorable month for equities, while also looking ahead to 2026 [6] - Despite concerns about tech leverage, the overall sentiment remains positive, with expectations that tech will continue to lead in the coming year [19][26]