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Neutral Era Strategies: Tech Rotation and FOMC Anticipation · The SPY Trader

• 0:00
  Hello and welcome to another episode of Spy Trader !
• 0:03
  I am your host , Sunny Sterling , and I am so glad you could join me this morning .
• 0:09
  It is 6 am on Tuesday , March 17th , 2026 , Pacific Time .
• 0:15
  Happy St.
• 0:16
  Patricks Day to all of you out there .
• 0:18
  The markets are showing us a little bit of the luck of the Irish this morning with a touch of green across the boards , but dont let that fool you into complacency .
• 0:28
  We are currently navigating a tricky latecycle expansion phase , and volatility is definitely invited to the party as the Federal Open Market Committee starts its twoday meeting tomorrow .
• 0:39
  Most investors are balancing the hope of a soft landing against a Federal Reserve that has recently tapped the brakes on rate cuts because of some stubborn inflation in the services sector .
• 0:51
  We have officially moved out of the higher for longer era and into what many of us are calling the Neutral Era .
• 0:58
  Right now , the Fed Funds Rate is sitting between 3.75 and 4.00 percent .
• 1:04
  After three quick cuts late last year , the Fed is in wait and see mode to see how the jobs market handles everything .
• 1:11
  This has put some pressure on longdated bonds , so if you are holding the iShares 20 plus Year Treasury Bond ETF , also known as TLT , you have likely noticed it stabilizing but remaining very sensitive to whatever Chair Powell says next .
• 1:28
  Inflation is sticking around 2.7 percent , mostly because of the costs associated with the green energy transition and housing .
• 1:36
  Plus , a strong US dollar is making life a little harder for our big tech companies selling overseas , which is actually making international options like the Vanguard Total International Stock ETF look like a pretty good value play right now .
• 1:52
  Looking at the sectors , Technology is still leading but it is starting to split .
• 1:57
  The initial rush to buy every AI chip in sight has cooled down , and we are moving into the implementation phase .
• 2:05
  While Nvidia is still a huge piece of the puzzle , we are seeing a rotation into software giants like Microsoft because they are actually starting to show real recurring revenue from their AI agents .
• 2:18
  Over in Healthcare , things are booming .
• 2:20
  We are in a bit of a Biotech Renaissance .
• 2:24
  Eli Lilly is reaching brand new highs because they have finally fixed their supply chain issues for those weight loss treatments that everyone wants .
• 2:32
  In the Financial world , the yield curve is finally uninverting , which is great news for big banks like JPMorgan Chase and their profit margins , though we are still keeping a cautious eye on regional banks and their commercial real estate debts .
• 2:48
  In the news today , Apple is grabbing headlines .
• 2:52
  We heard this morning that their Vision Pro 3 and their new home robotics projects have completely blown past preorder expectations .
• 3:01
  This is great news for the QQQ , where Apple carries a lot of weight .
• 3:06
  However , we are also seeing crude oil spike to 88 dollars a barrel because of new tensions in the Middle East .
• 3:14
  This is helping energy stocks in the short term , but many investors are looking toward the Vanguard Real Estate ETF , or VNQ , because of its pivot into data center properties which are the backbone of this AI boom .
• 3:28
  Also , keep an eye on the Department of Justice .
• 3:31
  They are turning up the heat on big tech cloud bundling , which has caused some minor pullbacks in the Invesco QQQ Trust as people worry about potential breakups .
• 3:41
  So , how should you be trading this ?
• 3:44
  For your core portfolio , I recommend increasing your exposure to the Vanguard Total Stock Market ETF , or VTI .
• 3:53
  While everyone loves the S&P 500 , VTI captures the mid and smallcap companies that are finally starting to catch up now that interest rates are a bit lower .
• 4:03
  For growth , I would focus on Microsoft or the Technology Select Sector SPDR Fund , XLK .
• 4:11
  The hardware rush is maturing , and the next leg of growth is going to be in the software that people actually use .
• 4:18
  Microsoft is looking like a very safe bet given their earnings projections .
• 4:23
  For stability , look at the iShares Core U.S.
• 4:26
  Aggregate Bond ETF , or AGG .
• 4:30
  It gives you a nice four and a half percent yield with very low risk , which is a great place to park cash while we wait for the Fed .
• 4:38
  Finally , for some diversification , think about putting about 10 to 15 percent into the Vanguard FTSE Developed Markets ETF , ticker VEA .
• 4:48
  Markets in Japan and Europe are trading at a massive discount compared to the US , giving you a nice margin of safety .
• 4:55
  To wrap things up , we are cautiously optimistic today .
• 4:59
  Rebalance a bit away from the pure hardware plays like Nvidia and look toward broader market exposure and defensive growth in healthcare .
• 5:08
  Stay tuned for tomorrows Fed statement , because if they signal another pause , we might see a big move into real estate and highdividend stocks .
• 5:18
  Thanks for listening to Spy Trader , and I will see you in a few hours !