There's industrial momentum going into 2026, says Strategas' Chris Verrone

Economic Outlook - The economy is showing signs of strength, with indications that the soft patch in Q3 and Q4 is likely over, as the market appears to be looking beyond it [3][4] - There is a fundamental shift occurring from speculative parts of the market to more economically sensitive sectors, suggesting a rotation towards the real economy [2][11] Market Signals - Transports, regional banks, and discretionary stocks are beginning to show positive momentum, indicating a potential industrial upswing into 2026 [4][10] - Commodity markets are reflecting this industrial momentum, with significant breakouts in copper and aluminum prices, suggesting a robust economic backdrop [9][10] Global Economic Context - Most central banks have been easing for the past 15 months, and the lagged benefits of this easing are starting to manifest in the industrial economy [8][9] - The rotation into the real economy is not limited to the U.S., as similar trends are observed globally, particularly in commodity-sensitive regions like Australia and Canada [7][8] Investment Opportunities - Stocks in the commodity sector, such as Freeport and Southern Copper, are responding positively to the improving economic conditions, indicating potential investment opportunities [13][14] - The healthcare sector is also showing strong performance, suggesting that it may be a favorable area for investment as the market rotates [17]