This is a rotational bull market as cyclicals look good, says Piper Sandler's Craig Johnson

Market Rotation & Investment Strategy - The market is experiencing a rotational bull market, with profit-taking expected in stocks like Oracle, Nvidia, and Broadcom [2] - Piper Sandler suggests leaning into the rotation towards financials and industrials [1] - Raymond James emphasizes the importance of balance, advising to continue investing in the AI trade while exploring opportunities in healthcare, energy, and financials [8] Sector Analysis & Opportunities - Energy sector has been upgraded, and healthcare is showing signs of strength [3] - Regional banks are considered a key overweight for the coming year due to improving net interest margins with lower rates [8][12][13] - Medical devices are attractive due to the aging population and increasing chronic diseases [14] - Biotechnology is also promising due to increased M&A activity driven by big pharmaceutical companies needing to replenish their drug pipelines facing patent cliffs in the next 3 to 5 years [14][15] Economic Fundamentals & Sustainability - The sustainability of the rotation into small caps and energy is linked to resilient economic fundamentals [6] - The Federal Reserve's optimistic economic outlook supports the outlook for small-cap companies, benefiting from lower rates [7]