Scott Croniner joins us from uh city. He's US equity strategist. Scott, not to ask how much you can deadlift, but feel free to offer, you know, [laughter] >> let's just say, Kelly, I can lift my weight, but that's about it.>> Which is looking like a little less than that. All right. So, you do think a more dovish Fed is is a plank of this bull market story.>> Yeah, it's it's kind of interesting. We just published a note that hit a few minutes ago that I I titled uh the data is dead, long live the data. And ...

Company Overview - Truist Financial Corporation (TFC) has a market capitalization of $64.2 billion and is one of the largest regional financial services companies in the U.S., formed in 2019 through the merger of BB&T and SunTrust [1] - The company is headquartered in Charlotte, North Carolina, and offers a wide range of services including consumer and commercial banking, lending, wealth and asset management, insurance, and investment banking [1] Earnings Expectations - Analysts anticipate TFC will report a profit of $1.09 per share for fiscal Q4, representing a 19.8% increase from $0.91 per share in the same quarter last year [2] - For the current fiscal year, TFC is expected to report a profit of $3.94 per share, up 6.8% from $3.69 per share in fiscal 2024, with further growth projected to $4.46 per share in fiscal 2026, a 13.2% year-over-year increase [3] Stock Performance - TFC shares have increased by 15.8% over the past 52 weeks, slightly outperforming the S&P 500 Index's 15.4% rise and the Financial Select Sector SPDR Fund's 14.5% increase during the same period [4] - On December 10, TFC shares rallied more than 3% following the announcement of a reduction in its prime lending rate from 7% to 6.75%, which is seen as a positive signal for loan demand [5] Analyst Ratings - Wall Street analysts have a "Moderate Buy" rating for TFC, with 22 analysts covering the stock: seven recommend "Strong Buy," two suggest "Moderate Buy," 12 indicate "Hold," and one advises a "Strong Sell" [6] - The mean price target for TFC is $51.17, indicating a potential upside of 2.5% from current levels [6]

Core Viewpoint - Regions Financial Corporation, valued at $24.2 billion, operates as a financial holding company providing banking and financial services to individuals and corporations [1] Financial Performance - Regions Financial is expected to report an adjusted profit of $0.61 per share for Q4, reflecting a 3.4% increase from $0.59 per share in the same quarter last year [2] - For the full fiscal year 2025, adjusted EPS is projected to be $2.36, an 11.3% increase from $2.12 in 2024, with further growth expected in fiscal 2026 to $2.58 per share, a 9.3% year-over-year increase [3] Stock Performance - RF stock prices have increased by 18% over the past 52 weeks, outperforming the S&P 500 Index's 15.4% rise and the Financial Services Select Sector SPDR Fund's 14.5% returns during the same period [4] - Following the release of Q3 results, RF's stock gained nearly 1%, with net interest income growing 4.3% year-over-year to $1.2 billion and total non-interest income rising 15.2% year-over-year to $659 million [5] Analyst Ratings - The consensus opinion on RF stock is cautiously optimistic, with a "Moderate Buy" rating from 25 analysts: seven recommend "Strong Buy," two suggest "Moderate Buy," 15 advise "Hold," and one recommends "Strong Sell" [6] - The mean price target for Regions Financial is $28.92, indicating a modest 5.2% premium to current price levels [6]

Core Viewpoint - Huntington Bancshares Incorporated (HBAN) is poised to report strong fourth-quarter results, with expectations of a significant year-over-year increase in adjusted earnings per share (EPS) and a positive outlook from analysts [2][3][6]. Financial Performance - For the fourth quarter, HBAN is expected to report an adjusted profit of $0.40 per share, reflecting a 17.7% increase from $0.34 per share in the same quarter last year [2]. - For the full fiscal year 2025, HBAN's adjusted EPS is projected to be $1.50, which is a 21% increase from $1.24 in 2024, with further growth expected in fiscal 2026 to $1.70 per share, a 13.3% year-over-year increase [3]. - The company's topline revenue for the recent quarter was $2 billion, marking a 13.8% year-over-year increase, while net income surged 25.2% year-over-year to $602 million, exceeding analysts' expectations [6]. Stock Performance - Over the past three months, HBAN's stock prices have increased by 10.6%, although this is lower than the S&P 500 Index's 15.4% rise and the Financial Services Select Sector SPDR Fund's 14.5% returns during the same period [4]. - Following the release of its Q3 results, HBAN's stock saw a slight uptick, supported by a 7.6% year-over-year growth in interest on loans and leases to $2.1 billion, and a 1.7% increase in overall interest income to $2.6 billion [5]. Analyst Sentiment - Analysts maintain a positive outlook on HBAN, with a consensus "Moderate Buy" rating among 23 analysts, which includes 16 "Strong Buys," one "Moderate Buy," five "Holds," and one "Strong Sell" [6]. - The mean price target for HBAN is $19.89, indicating a potential upside of 13.1% from current price levels [6].

Core Insights - Chewy, Inc. (CHWY) reported better-than-expected earnings for its third fiscal quarter, indicating strong financial performance [1] - The company continues to experience significant success in growing its subscription business, which is a key driver of its revenue growth [1] Financial Performance - Chewy's earnings exceeded analyst expectations, showcasing its robust operational efficiency and market positioning [1] Subscription Business Growth - The retailer has made notable advancements in expanding its subscription services, contributing positively to its overall business model [1]

Core Viewpoint - The market is expected to experience increased dispersion among MAG7 stocks in 2026, with a shift in focus from AI infrastructure providers to adopters of AI technology [1]. Market Performance - Over the past 6 months, only 17% of S&P constituents outperformed the index, but this figure rose to 61% in the last month, indicating improved market breadth [2]. - Small-cap stocks, represented by the Russell 2000, have shown the best improvement in breadth compared to both 50-day and 200-day moving averages [3]. Economic Indicators - Recent flash PMI data has been disappointing, suggesting potential challenges for the market narrative [4]. - The economy is showing signs of slowing, which is expected to continue into 2026, although earnings have not yet weakened significantly in line with macroeconomic data [5]. Earnings and Valuation - Since August, there has been a halt in aggressive multiple expansion, with earnings growth continuing to accelerate [6]. - The Russell 2000 index has seen a significant increase in unprofitable stocks, which are up 62% since April 8, compared to a 29% increase in profitable stocks [8]. Investment Strategy - It is recommended to avoid unprofitable lower-quality segments within small caps and to focus on higher-quality profitable segments [9].

Uh, all right, Ed. Top of your note today to our producers, we have several concerns about 2026, which is interesting because I didn't hear from a single person who was on this program yet today or for that matter anybody who was on halftime earlier who has several concerns about 2026. What gives.>> So, first of all, I want to emphasize that these are concerns that may or may not come to fruition, but we got to look ahead and see what might happen. Top of the list is what what could go on with the Fed. You ...

Summary of US Equity Strategy Conference Call Industry Overview - The focus is on the US equity market, particularly the S&P 500 index and its performance outlook for 2026, with a target set at 7700 based on projected earnings of $320 per index share [1][2][21]. Core Insights and Arguments - **Earnings Projections**: The base case for the S&P 500 is set at 7700, with a bull case of 8300 and a bear case of 5700, reflecting varying expectations for earnings growth and valuation [2][8][21]. - **AI Impact**: The ongoing integration of AI is expected to drive productivity improvements, shifting focus from AI enablers to adopters, which may lead to increased performance dispersion among stocks [3][12][71]. - **Sector Performance**: Strong corporate earnings are anticipated, particularly in Value, Cyclical, and Small/Mid Cap sectors, with growth estimates expected to exceed consensus [4][51]. - **Valuation Risks**: The current high valuation presents a challenge, with a slight expected multiple compression from 25x to 24x. Factors such as lower 10-year yields and a supportive Federal Reserve are crucial for maintaining valuation levels [5][57][59]. Additional Important Points - **Market Volatility**: The fourth year of the current bull market is expected to bring bouts of volatility, influenced by macroeconomic conditions and potential geopolitical developments [9][20][71]. - **Earnings Growth Dynamics**: The growth cohort needs to consistently outperform expectations to support valuations, while broader market participation in earnings growth is anticipated as headwinds dissipate [51][54]. - **Defensive and Cyclical Sectors**: The defensive sector has shown negative revisions, while cyclical sectors are expected to recover as tariff concerns ease [37][51]. - **Geopolitical Considerations**: The report does not specifically account for geopolitical developments in its base case, acknowledging the unpredictability of such events [20][71]. - **Investor Sentiment**: The current market sentiment is described as euphoric, which historically correlates with premium valuations and potential for corrective phases [70][71]. Conclusion - The outlook for 2026 is cautiously optimistic, with expectations for strong earnings growth driven by AI and sectoral broadening. However, the high valuation and potential for volatility necessitate careful stock selection and monitoring of macroeconomic indicators [71].

Core Viewpoint - The Federal Reserve's recent interest rate cut was anticipated and reflects a cautious approach without committing to future cuts, indicating a hawkish stance [1][5]. Group 1: Federal Reserve and Interest Rates - The Fed's decision to cut rates aligns with market expectations, and there is an increasing number of dissents within the committee, which may enhance the perception of its independence [2][5]. - The labor market remains a critical factor influencing the Fed's decisions, with potential for more cuts if labor market conditions deteriorate [5][6]. Group 2: Earnings and Market Performance - Recent earnings reports have shown positive surprises, particularly in the third quarter, contributing to a broadening market performance where 54% of S&P constituents have outperformed the index [6][7]. - There is a noticeable deceleration in earnings growth among mega-cap tech stocks, while the rest of the market is experiencing an accelerating pace of earnings growth, supporting a more diversified market [8][9]. Group 3: Investment Opportunities - Despite frothy valuations, there are opportunities for value investments, particularly in sectors that have shown resilience and growth potential [10][12]. - The Russell 2000 index shows that non-profitable components are outperforming profitable ones, suggesting a need to focus on companies with strong fundamentals and positive earnings trends [13][14].

Core Insights - The U.S. stock indices showed positive performance on December 11, 2025, with the S&P 500 and Dow Jones Industrial Average reaching new closing records following a quarter-point interest rate cut by the U.S. central bank on December 10, leading investors to favor equities sensitive to rate cuts over tech stocks [1][2]. Investment Recommendations - Investors are advised to consider low-leverage stocks as safe-haven securities amid concerns over overvalued AI-centric tech stocks. Recommended companies include Casey's General Stores (CASY), Hamilton Insurance Group (HG), Northrip Bancorp (NRIM), REV Group (REVG), and Engie (ENGIY), which exhibit low leverage and stability during market volatility [2][10]. Understanding Leverage - Leverage involves borrowing capital for operational and business expansion, typically through debt financing. While debt can facilitate growth, excessive reliance on it poses risks, especially if returns do not exceed interest costs. Therefore, selecting companies with low debt is crucial for minimizing investment risks [4][5][6]. Debt-to-Equity Ratio Analysis - The debt-to-equity ratio is a key metric for assessing a company's financial risk, with lower ratios indicating better solvency. As the third-quarter 2025 earnings season concludes, investors should focus on stocks with solid earnings growth and low debt-to-equity ratios to ensure steady returns [7][9]. Stock Selection Criteria - A comprehensive screening process for selecting low-leverage stocks includes criteria such as: - Debt/Equity ratio lower than the industry median - Current price of at least $10 - Average 20-day trading volume of 50,000 or more - Positive earnings growth compared to the industry median - VGM Score of A or B, combined with a Zacks Rank of 1 (Strong Buy) or 2 (Buy) [11][12][13]. Company Performance Highlights - **Casey's General Stores (CASY)**: Reported a 3.3% increase in same-store sales and a 14% rise in earnings for Q2 fiscal 2026. The Zacks Consensus Estimate predicts a 9.6% revenue increase and an 11.8% earnings improvement for fiscal 2026, with a Zacks Rank of 2 [14][15]. - **Hamilton Insurance Group (HG)**: Achieved a 16.5% increase in net premiums and improved operating earnings to $1.20 per share from $0.16 in Q3 2024. The Zacks Consensus Estimate forecasts a 20.9% revenue increase and an 8.5% earnings rise for 2025, holding a Zacks Rank of 1 [16][17]. - **Northrip Bancorp (NRIM)**: Completed a $60 million private placement to support growth initiatives. The Zacks Consensus Estimate anticipates a 29.6% revenue increase and a 51.5% earnings rise for 2025, with a Zacks Rank of 1 [18][19]. - **REV Group (REVG)**: Reported a 13% increase in net sales and a 62.7% rise in adjusted EPS for Q4 fiscal 2025. The Zacks Consensus Estimate suggests a 7.3% revenue increase and a 30.4% earnings rise for fiscal 2026, with a Zacks Rank of 2 [20][21]. - **Engie (ENGIY)**: Announced the financial closure of its first offshore wind farm in Poland, with a total planned capacity of up to 390 MW. The Zacks Consensus Estimate indicates a 31.8% earnings improvement for 2025, holding a Zacks Rank of 2 [22][23].