Ghabour's 2026 Outlook: Bullish Small Caps & Financials, Tech Bar "Set Too High"

Yields sideways , short term, gpt inferred

inferred

NDX cautious down , short term, interviewee implicit

implicit

RUT up

Oil

Metals

USD

Key Advisors Wealth Management 4.2
Wealth Manager
Eddie Ghabour 7.0

Ghabour's 2026 Outlook: Bullish Small Caps & Financials, Tech Bar "Set Too High"

ndx

Underweight tech due to high earnings bar and priced-in good news; expects rotation away from Mag 7; foresees tech-led correction starting in late March/April 2026. This implies cautious downward pressure on NDX (tech-heavy) in the short term before a potential rebound later.

rut

very bullish. I don't know if there's an area that benefits more than the economic setup we have... So we think the year over your earnings growth and small caps are going to be very strong. RUT (Russell 2000) represents small caps. Bullish due to dovish Fed, QE, accelerating growth, falling inflation, and strong technicals with buyers on dips in IWM (small-cap ETF).

4 calls

+1

no reliable edge (random outcomes)

12/23/2025 1:00:55 AM	medium term up	20 days later	+3.34%	+3.34%

yields

Host notes yields are 'rangebound'. Interviewee agrees market reaction is muted, suggesting no immediate catalyst for a sharp move. Combined with expectation of dovish Fed policy, yields likely to remain rangebound in near term.

Asks for thoughts on the muted market reaction to inflation data and yields being rangebound.

speaker1
Eddie Gabor

The muted reaction is a sign of strength. The worst inflation is in the rearview mirror. Setup favors economically sensitive areas as inflation trends down and economy surprises upside.

Market up 5 of last 6 days; core inflation came down; energy and housing prices down are tailwinds.
Asks what data points give confidence in growth surprising to the upside.

speaker1
Eddie Gabor

Energy prices down are a tailwind for consumer and small caps. Expect companies in housing/small caps to beat low earnings bars, while tech faces high bars.

Institutions will be forced to buy under-owned areas that have been 'hated and left for dead'.
Asks what the market is underestimating in housing and how administration policies play in.

speaker1
Eddie Gabor

Housing off to a big start due to administration commitment. $200B MBS purchase will lower mortgage rates. Consumer confidence from wage growth and lower inflation will support housing.

Betting housing won't be down for a third straight year relative to other areas.
Asks why underweight tech—valuation, earnings risk, or broader rotation?

speaker1
Eddie Gabor

Rotation will continue. Tech bar is too high; all good news priced in. Mag 7 hasn't done much while other areas came to life. Expect better buying point in tech later in 2026.

Earnings won't surprise to upside; market is front-running what will happen in earnings season.
Asks about financials space and takeaways from JP Morgan report.

speaker1
Eddie Gabor

Bullish on financials. Current weakness from Trump's 10% credit card cap proposal is a buying opportunity as legislation likely won't pass/stick.

Accelerating economy with accommodative Fed is traditionally very bullish for financials.
Asks if still bullish on small caps given Fed developments (Powell investigation, new head).

speaker1
Eddie Gabor

Very bullish on small caps. They benefit most from dovish Fed, QE, accelerating growth, and downward-trending inflation. IWM shows strong performance with buyers on dips.

New Fed head perceived as more dovish than Powell; strong year-over-year earnings growth expected.
Asks what investors should look for to know when the expected major correction is starting.

speaker1
Eddie Gabor

Correction will start in tech space in late March/April as AI trade gets tired. Will be healthy for bull market longevity. Plan to shift out of tech, stay in strong areas, then rotate back later.

Saw signs late last year with frothy names down 25-30%.

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