Hurry Up and Wait

The Euphoria may be coming to an end...

Action to Take: Powell's "no hurry" stance on rate cuts reshapes our near-term outlook. As December cut odds drop to 62%, markets transition from momentum to fundamentals. Consider 20% trailing stops on speculative positions that surged post-election while giving quality names more room to breathe. Watch domestic small-caps and sectors most insulated from higher-for-longer rates while reducing exposure to growth names that rallied hard on aggressive easing hopes. Bond vigilantes are winning round one in forcing a Fed pivot on easing pace, suggesting a focus on capital preservation.

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Momentum: Despite this week's pullback from post-election highs, momentum signals are still pointing up. The S&P 500 has given back about a third of its recent gains as markets react to Powell's hawkish tone, with December rate cut odds dropping from 82% to 62%. Gold's worst weekly drop in three years shows how traders are repositioning. If the downturn continues today, keep an e…