Are You Doubting Santa Rally? 4 Low P/E Momentum ETFs to Play

Core Insights - Investors are debating the likelihood of a Santa Claus Rally due to macro uncertainties, including the Fed's interest-rate policy and AI overvaluation concerns [1][9] AI Overvaluation Concerns - The U.S. tech sector is facing stretched valuations, with Goldman Sachs and Morgan Stanley predicting a potential 10-20% market correction [2][3] - Despite increased AI investments, doubts persist regarding their profitability [2] Inflation Worries - The Fed has not yet achieved its 2% inflation target, with the Consumer Price Index (CPI) rising 2.7% year over year as of November [4] - The personal consumption expenditures price index rose 2.8% in September, which may hinder faster rate cuts in 2026 [5] Economic Indicators - Recent data shows improved consumer sentiment, with the University of Michigan index rising to 52.9 in December, although still 28.5% below last year [7] - Housing sales increased for the third consecutive month in November, but 2025 transactions are projected to end at a 30-year low [7] Momentum ETFs - Suggested momentum ETFs with low P/E ratios include: - Invesco S&P MidCap Value with Momentum ETF (P/E: 10.73, One-Month Return: +10.8%) [8] - Invesco S&P SmallCap Value with Momentum ETF (P/E: 10.92, One-Month Return: +10.6%) [10] - Invesco Dorsey Wright Basic Materials Momentum ETF (P/E: 25.53, One-Month Return: +11.2%) [11] - Cambria Value & Momentum ETF (P/E: 13.92, One-Month Return: +7.1%) [12]