Good morning, investors. The US Labor Department announced it will not release the October PPI inflation report, taking one more data point out of the equation for policymakers.

Regardless, markets still see about an 89% chance the Fed cuts rates Wednesday.

And that, in the view of stock investors, is what ultimately matters.

Fears of an AI bubble continue to swirl yet the Big Tech names driving the boom haven’t seen outsized returns against the broader market.

As of Monday, five of the Magnificent Seven stocks have lagged the S&P 500 year-to-date.

Only Alphabet and Nvidia have outpaced the index.

Tesla, Microsoft, Apple, Meta and Amazon have underperformed. 

To be fair, the Magnificent Seven as a group remains up nearly 24% year-to-date, ahead of the 16.7% for the S&P 500.

Still, Jay Woods, chief market strategist for Freedom Capital Markets and a three-decade veteran on Wall Street, told me on Full Signal that it’s not a stretch to call these tech names the “lag seven” at this moment.

That in itself presents another data point against the comparisons between today and the dot-com bubble.

“I think 2026 is not going to be just those seven stocks [leading], you’re going to see other sectors start to show strength,” Woods said, nodding to financials as a potential winning sector for the months ahead.

“The shine of the Magnificent Seven may continue to falter.”

Indeed, few investors would have bet on a parlay for the S&P 500 to return 17% while the majority of the Magnificent Seven underperformed the index. 

Yet that’s what markets are on pace for.

But rather than undermine the bull market, in Woods’ view, relative weakness in tech points to healthy broadening and rotation beyond Big Tech, which Woods considers a reason for optimism.

In the year ahead, he’s expecting further rotation into non-technology names, and more capital flowing out of the Magnificent Seven and into smaller technology stocks as well as other sectors.

“I don’t think there’s a narrative out there to make us go bearish,” Woods said.

Plus, with multiple rate cuts expected in 2026, too, that could help other rate-sensitive corners of the market pick up as well.

Todd Sohn, an ETF strategist at Strategas, told me separately on Full Signal that he’ll be watching for small-cap stocks to start rising in the new year.

“If you’ve had no small-cap exposure, I’d up the dosage,” Sohn said. 

The healthcare sector, too, could see a rebound in the coming months, Sohn said. 

Healthcare ETFs have seen huge outflows over the last year and sentiment seems to have bottomed.

Plus, the sector’s performance relative to the S&P 500 has been extremely bearish, which could position it well as both portfolio diversification and a contrarian trade.

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🤝 President Trump approved Nvidia’s AI chip sales to China. But it’s contingent on the US taking a 25% cut. He said that China’s President Xi Jinping “responded positively” to the proposal. (CNBC)

📺Paramount launched a hostile bid for Warner Bros. Discovery. It announced a $108 billion all-cash deal worth $30 a share to try and top Netflix’s deal struck last week. Netflix stock dropped 4% while Warner Bros rose 5%. (Yahoo Finance)

💰 One of Warren Buffet’s leading lieutenants will leave to JPMorgan. Geico CEO Todd Combs will run the bank’s new investment group and report directly to Jamie Dimon. (Yahoo Finance)

🏦 President Trump says the Netflix deal could be a “problem.” He said that he’ll be involved in the final outcome of the deal. (CNBC)

I sat down with Jay Woods, chief strategist at Freedom Capital Markets, to discuss the outlook for 2026, which sectors he likes most and the disconnect between asset prices and the real economy.

Tune in YouTube, Spotify, or Apple Podcasts.

🗓 December 9, 1999: Dot-com darling VA Linux Systems went public at $30 a share and opened at $299, ultimately closing its first day of trading with a 700% gain.

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📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

I write our flagship newsletter and host our show, Full Signal, to prepare you for each trading day — unpacking markets, economic data and Wall Street with analysis you won’t find anywhere else.

Feedback? Reply to this email, ping me on X @philrosenn, or write me directly at [email protected].