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Earnings Boom Meets Rate Cut Hopes · The SPY Trader

• 0:00
  Welcome back to Spy Trader , the podcast that wakes up before the market does .
• 0:05
  I'm your host , Chip Dip , and it is bright and early , 5 am on Wednesday , December 3rd , 2025 , Pacific time .
• 0:14
  We are tracking a decidedly upward trajectory this morning , with US stock futures edging higher , confirming the positive momentum we saw yesterday .
• 0:24
  The S&P 500 is flirting with alltime highs , capping off a great 2025 driven by tech strength and , let's be honest , high hopes for a Fed pivot .
• 0:35
  The big story powering us into the middle of the week is a potent cocktail of resilient corporate earnings and almost certainty that the Federal Reserve will deliver an interest rate cut very soon .
• 0:47
  Markets are now pricing in an 89% probability of a 25 basis point cut next week .
• 0:55
  That dovish outlook is fueling the riskon environment .
• 0:58
  In company specific news , the AI infrastructure boom continues to deliver .
• 1:03
  Marvell Technology , ticker MRVL , jumped nearly 10% in extended trading after giving a bullish forecast , especially for their data center segment .
• 1:14
  Cybersecurity leader CrowdStrike also reported strong earnings , boosting sentiment in that space .
• 1:21
  It wasn't just tech making moves , though .
• 1:24
  Boeing , BA , soared over 10% on commentary suggesting stronger aircraft deliveries could significantly boost their free cash flow in 2026 .
• 1:35
  Even the consumer sector showed some muscle , with American Eagle Outfitters rising 10% on positive projections for holiday sales .
• 1:44
  Looking beyond the headlines , the current environment is less about pure megacap dominance and more about broadening leadership .
• 1:52
  While Technology , led by the XLK ETF , remains the strongest performer yeartodate , its high valuation — a P/E over 30 — is prompting tactical rotation .
• 2:04
  We are seeing strong momentum in cyclicals like Industrials , tracked by XLI , which was the secondbest performer in the last session , benefiting from good news like the Boeing update .
• 2:16
  Health Care , XLV , is also acting as a strong outperformer lately .
• 2:22
  This sector offers a great risk/return profile — it’s lower beta but still has strong growth potential .
• 2:29
  The market is waiting on the ADP employment report today , and later this week , the allimportant PCE inflation data , but the main takeaway is simple : strong earnings plus a dovish Fed equals higher stock prices .
• 2:42
  So , what should Spy Traders be doing now ?
• 2:45
  Our strategy remains Growth at a Reasonable Price , or GARP , combined with tactical diversification .
• 2:53
  First , maintain your core exposure to the broader market to capture that yearend rally using something diversified like the Vanguard Total Stock Market ETF , VTI .
• 3:04
  Second , we recommend overweighting those cyclical recovery plays .
• 3:08
  The anticipation of a soft landing and falling shortterm rates make the Financial Select Sector SPDR Fund , XLF , and the Industrial Select Sector SPDR Fund , XLI , very attractive right now .
• 3:23
  Third , utilize defensive growth via the Health Care Select Sector SPDR Fund , XLV .
• 3:30
  This sector allows you to hold fundamental growth without taking on the extreme valuation risk of some of the highestflying tech names .
• 3:39
  Finally , while we caution against being excessively overweight in the highestvalued tech names , you must maintain exposure to the confirmed AI drivers .
• 3:49
  Look for specific individual names that are proving their strength , such as Marvell Technology , MRVL , which just confirmed the data center buildout story .
• 3:59
  Also , keep an eye on longterm bonds .
• 4:02
  With that Fed cut highly likely next week , tactical exposure to instruments like the iShares 20 Year Treasury Bond ETF , TLT , can act as a great portfolio diversifier .
• 4:15
  That’s your market update for this morning .
• 4:18
  Good luck with your trading , and we'll catch you on the next episode of Spy Trader .