With only 11 trading days left in 2025, Wall Street is wrapping up another very strong year. All four major averages are up double digits. The Nasdaq is up 20%.This is for the third year in a row. Can this rally continue or will 2026 break the market's recent run. Well, maybe this week can provide a glimpse for evidence of evidence for both the bull and bear cases.On the bull side, we have seen improvement in the breath. It's more than just tech, financials, industrials, transports. If you dig into industri ...

Market Overview - Wall Street is experiencing a strong year with all four major averages up double digits, particularly the Nasdaq which is up 20% [1] - This marks the third consecutive year of market gains, raising questions about the sustainability of this rally into 2026 [1] Bullish Indicators - Improvement in market breadth is noted, with leadership emerging from sectors beyond technology, including financials, industrials, and transports [2] - The Federal Reserve has implemented another rate cut, coinciding with strong consumer activity during the holiday shopping season [2] Bearish Concerns - Despite the Fed's rate cut, forecasts indicate limited further cuts in the coming year, with only one additional cut projected [3] - Signs of weakness in the housing market are evident, with national home prices declining and statements from industry leaders indicating it is the worst housing market in nearly 50 years [3] Sector Analysis - Financials are favored due to the steepness of the yield curve, which is beneficial at this point in the economic cycle [7] - The technology sector is undergoing a repricing, with concerns that current valuations may not be sustainable given logistical constraints in rapid expansion [8] AI Market Dynamics - The AI sector is experiencing a global demand surge, which is expected to push prices higher, although there are concerns about overbuilding in the market [9][16] - The potential for AI to enhance productivity is emphasized, with a multi-year tech revolution anticipated, although caution is advised regarding possible overinvestment [16][17] Earnings Outlook - Earnings growth is projected to accelerate, with estimates of 10% growth last year, 12% this year, and 14.5% next year based on consensus numbers [11] - The overall economic environment is described as stable, despite a mismatch between equity markets and the broader economy [12]