Why 2026 may bring modest gains and more volatility, David Katz, Matrix

Market Outlook - The current December is viewed as the Santa Claus rally, with expectations for a broadening market in 2026, indicating a rotation from high-performing sectors to those that have underperformed [2][6] - The market is anticipated to shift towards value and dividend stocks, as well as small-cap stocks, rather than continuing to favor mega-cap tech stocks [6] Sector Performance - Dividend and value stocks, represented by ETFs like the S&P Spider 500 high dividend ETF and Schwab large cap value ETF, have underperformed the S&P 500 this month, despite expectations for a potential catch-up in performance [3][5] - Consumer staples and discretionary sectors, along with energy, are highlighted as areas that have not performed well but may present interesting opportunities due to lower valuations [5] Commodities Market - The metals market, particularly gold and silver, is viewed as having peaked, with the best performance in nearly 50 years, suggesting that current investments in these commodities may be chasing momentum rather than value [8] - The recommendation is to take profits in gold and silver rather than investing new capital [9] Technology Sector - The tech sector is expected to remain positive, but growth may not be as robust as in previous years, with a notable rotation among the MAG 7 stocks, where five have underperformed the S&P 500 [10][11] - Companies like Meta and Microsoft are anticipated to perform better in the upcoming year, while Google is expected to see less impressive growth compared to this year [11][12]