Well, tech earnings set to kick off this week. Investor focus seems to be broadening beyond the big cap names. The Russell 2000 has been outperforming the S&P 500 over the last six months, driven by valuations and rate cut expectations.Our next guest thinks this trend will continue. Joining us now is Northwestern Mutual Wealth Management Chief Portfolio Manager Matt Stucky. Matt, great to have you with us.>> Thanks for having me. >> So, you're you're into the Russell 2000 move. You think this is durable.Wel ...

Core Insights - Economists anticipate that the upcoming report will indicate core PCE remaining steady at 2.8%, which is expected to reinforce a cautious approach from policymakers regarding interest rate cuts [1]

Group 1: Gold Market Dynamics - Gold prices experienced a significant decline, dropping as much as 1.7%, following President Trump's comments regarding the nomination of Kevin Hassett as Federal Reserve chair, which raised doubts about the Fed's future leadership [1][2] - The uncertainty surrounding the new monetary chief is expected to keep gold prices supported, but concerns about the Fed potentially not lowering borrowing costs as much as anticipated are negatively impacting non-yielding gold [3] - Gold has continued its rally into 2025, driven by renewed attacks on the Fed's independence and expectations of monetary easing [2] Group 2: Federal Reserve Insights - Recent inflation and unemployment data have led several Federal Reserve officials to indicate a willingness to pause rate cuts, citing a stabilizing labor market and ongoing inflation pressures [4] - Five regional Fed bank presidents have suggested that the central bank is well-positioned to wait for more data before making further policy decisions [4] Group 3: Silver Market Developments - Silver prices fell significantly, with spot silver declining as much as 6% after a previous modest decline, influenced by regulatory actions in China that limited trading positions and high-frequency trading [5][6] - The Shanghai Futures Exchange has implemented measures to reduce volatility by removing high-frequency trading servers and lowering the maximum number of intraday opening positions for silver futures [6]

Market Performance - The S&P 500 fell 0.53% to 6,926.60, failing to hold the 7,000 mark [1] - The Nasdaq Composite slid 1.00% to 23,471.75, driven by weakness in tech stocks [1] - The Dow Jones Industrial Average edged down 0.09% to 49,149.63 in a risk-off session [1] Company-Specific Movements - Nvidia dropped 1.44% to $183.14, while Microsoft decreased by 2.40% to $459.38, contributing to the tech sector's decline [2] - Wells Fargo experienced a decline due to mixed earnings and regulatory concerns [2] - Exxon Mobil outperformed the market after its CEO labeled Venezuela as "uninvestable" [2] Investor Sentiment - Investors withdrew from tech and AI stocks, leading to the Nasdaq's largest decline in a month, amid fears of overvaluation and geopolitical shifts [3] - Despite strong earnings from Bank of America, bank stocks fell due to concerns over potential caps on credit card rates affecting revenue [3] - Wells Fargo missed revenue estimates, further impacting investor confidence [3] Economic and Regulatory Factors - Uncertainty regarding Federal Reserve independence has increased, influenced by a Department of Justice investigation into budget overruns [4] - Recent inflation data was lower than expected, raising questions about the pace of future rate cuts and reducing appetite for riskier investments [4] - Gold and silver prices are rising due to increased demand for safe-haven assets [4]

Core Viewpoint - Inflation remains the primary reason many households are experiencing financial pressure [1] Group 1 - The ongoing inflationary environment is significantly impacting household financial stability [1]

Group 1 - In 2025, investors could have achieved 42% returns by investing in the top 10 performers of 2024, significantly outperforming the S&P 500's 16% gain [2] - Hindsight investing can lead to significant losses, as seen with Signature Bank and Ford Motor Co. in 2022, where they experienced declines of 63% and 42% respectively [3] - Current trends that drove growth in 2024 and 2025 are becoming less reliable, prompting a need for investors to adapt to new trends in the next 60 to 90 days [5] Group 2 - The anticipated trend of rate cuts in 2026 may be underestimated, with betting markets suggesting at least three cuts, which could benefit Rocket Cos. Inc. (RKT) [8][9] - Rocket Cos. is positioned to capitalize on potential refinancing activity if mortgage rates fall below 6%, following a recent upgrade to an "A" grade in the Stock Grader system [12][13] - Gene editing technologies are emerging as a significant trend, with Crispr Therapeutics AG (CRSP) being a leading company in this space, expected to see substantial revenue growth from its sickle-cell therapy [14][20] Group 3 - Evolv Technologies Holdings Inc. (EVLV) is positioned to benefit from increased demand for security solutions, particularly in public spaces, as it offers advanced weapon detection technology [22][24] - Evolv has shifted to a subscription model and improved its operations following a scandal, which may lead to better-than-expected growth in 2026 [25][26] - The overall market is showing signs of potential downturns, with historical parallels to previous market collapses, indicating that current optimism may be misplaced [27][28]

Group 1: Palantir Analysis - Palantir's stock appears to be soft in the market, with traders hesitant as they await the Federal Reserve's decisions on rate cuts [1] - The support level for Palantir is identified between $163 and $150, indicating a potential buying opportunity if the stock drifts towards this range [2] - Earnings for Palantir are not expected until February 18, suggesting limited short-term catalysts for movement [2] Group 2: Super Micro Computer Analysis - Super Micro Computer is currently in a phase of low activity, but there is potential for accumulation around the $30 level, which has shown support over the past 15 months [3] - A breakout above $30 could attract more investors, while a drop below $28 may lead to a significant decline towards the $15 level [4] - The 50-day EMA is currently below the $35 level, marking it as the first significant resistance barrier for any potential recovery [4]

Group 1 - The Dogs of the Dow is a well-known investment strategy that was first published in 1991 by Michael O'Higgins [1]

Core Viewpoint - Investors are increasingly concerned about valuations and potential bubbles as they enter 2026, but US megacap tech stocks are viewed as more attractive now than a year ago, according to Andrew Slimmon from Morgan Stanley [1] Valuation and Market Sentiment - The "Magnificent 7" tech stocks have underperformed the broader market in Q4 2025 despite strong fundamentals and AI tailwinds, leading to more compelling valuation multiples now compared to the start of 2025 [2] - Investors can now buy into earnings strength at a relative discount compared to 12 months ago, as the recent market rotation away from tech stocks was driven by sentiment rather than deteriorating profits [3] Interest Rates and Growth Potential - Long-term investors are encouraged to regain exposure to big-cap tech names due to expectations of further interest rate cuts by the US Federal Reserve in 2026, which historically benefits growth-oriented sectors like technology [4] - Lower borrowing costs are expected to support investment in innovation, cloud infrastructure, and AI, making US tech stocks attractive as they combine strong earnings with moderated valuations [5] Future Market Dynamics - A rotation back into tech stocks is anticipated in early 2026 as rate cuts provide a tailwind for capital-intensive growth [6] - Deregulation is identified as a structural driver that may trigger a rally across sectors, including technology, by releasing capital that can be deployed for earnings growth [7] - Greater flexibility for tech firms to raise funds, pursue acquisitions, and expand into new markets is expected due to deregulation, which will support multiple expansion alongside earnings growth [8]

Core Viewpoint - The Columbia Research Enhanced Real Estate ETF (CRED) launched at an inopportune time, coinciding with a bear market in real estate, and has since delivered a negative return of 1.6% while managing only $3.1 million in assets, raising liquidity concerns for investors [1] Group 1: Market Conditions and Rate Cuts - The real estate sector has been in a downturn, with the Vanguard Real Estate ETF (VNQ) losing approximately 24% from its peak in December 2021 to the end of 2025, primarily due to the Federal Reserve's rate hikes from near zero to over 5% starting in March 2022 [2] - The Fed is expected to cut rates in December 2025, with forecasts suggesting further cuts in 2026, potentially lowering the fed funds rate to between 3% and 3.25% from the current 3.75% to 4% [2] Group 2: Impact of Lower Rates - Lower interest rates will reduce the cost of debt for property acquisition and development, enhance the attractiveness of REIT dividends compared to Treasury yields, and lower cap rates, thereby boosting property valuations [3] - CRED, which yields just over 4%, will benefit from a falling rate environment, making its income stream more competitive [3] Group 3: CRED's Investment Strategy - CRED allocates about 28% to infrastructure REITs, which are less sensitive to interest rate changes compared to traditional property types, providing steady cash flows from long-term leases [4] - However, this defensive positioning may limit upside potential when rates fall, as traditional REITs with higher leverage could benefit more from easing cycles [6] Group 4: Comparison with Alternatives - The Schwab U.S. REIT ETF (SCHH) offers a similar portfolio with lower liquidity risk, charging only 0.07% in annual fees compared to CRED's 0.33%, and has $7 billion in assets, providing greater scale and trading volume [7] Group 5: Future Considerations - The key factor for CRED in 2026 will be whether the Fed implements the expected rate cuts, alongside the performance of its infrastructure-heavy portfolio in capturing recovery opportunities [8]