"YOU BETTER BE IN THE RIGHT SPOTS, KIDS" - Massive Sector Breakdown Pre-Fed

 

📊 Market Sector Tracker - Gary Kaltbaum's "Investor's Edge"

Tracking leading/lagging sectors, top stocks, and market positioning

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📅 Tuesday, December 9, 2025

"YOU BETTER BE IN THE RIGHT SPOTS, KIDS" - Massive Sector Breakdown Pre-Fed

Market Action

• Indices near highs but "a lot of Jell-O moving on the plate"
• Russell & Mid-caps near highs
• Fed meeting tomorrow (likely 3.75% → 3.5%)
• Gary: "Very important stock selection. Muy importante right now."

Leading Sectors 🟢

1. Semiconductors - Not all, but leading
2. Electronic Manufacturers
3. Data Storage - Not all
4. Big Banks - Except JPMorgan today
5. Private Equity - Coming on strong: Blackstone, BlackRock, Evercore, KKR
6. Other Financials - State Street Bank, Invesco, Synchrony Financial
7. Canadian Banks - "Stronger than our banks"
8. Gold & Silver - Very, very strong (Silver "bang-up day today")
9. Mega-Caps - Broadcom, Apple, Google strong; Tesla trying
10. Some Retail - Abercrombie, American Eagle, Bubarn, Estee Lauder, Five Below, Ralph Lauren, Ross Stores, TJ Maxx, Urban Outfitters, dollar stores

Lagging Sectors 🔴 GARY'S COMPREHENSIVE "AVOID" LIST

"There's still a lot of areas to definitively avoid. And how do we figure that out? We know what bear markets look like."

PAYROLL COMPANIES - "BRUTAL BEAR MARKETS"

• ADP, Paychex
• Gary: "We already know the jobs market is on the troublesome side. Brutal bear markets. And if that ain't something to watch, I don't know what is."

AUTO PARTS - "CLASSIC BEAR MARKETS"

• AutoZone: Down $270 today (-7%), "Classic bear market"
• Advanced Auto Parts, O'Reilly Automotive, Genuine Parts: All "classic bear markets"

WASTE MANAGEMENT - "BEAR MARKETS"

• Waste Management, Republic Services, Waste Connection: All bear markets

BLOOD TESTING

• Quest Diagnostics, LabCorp: "Topped out badly"

AUTO DEALERS - "Just plain old weak"

MANAGED CARE - Highlighted for "a very long time"

• UnitedHealth and group

HOTELS - "TUCKED IN BADLY LIKE FRIGHTENED TURTLES"

• Gary: "About two weeks ago, the hotels looked like they had a battle. Sitting near the highs, looked like they're about to go topside and a nice little breakout to the upside. They have all tucked in badly like frightened turtles. The hotels have topped."

CRUISE LINES - "VERY BAD SHAPE"

• Royal Caribbean, Norwegian, Carnival: Very weak, bear markets
• Exception: Viking (recent IPO) strong
• Note: Norwegian has big insider buying recently (but "just because somebody's buying insider-wise doesn't mean the stock goes up")

HOUSING & HOUSING-RELATED

• Sherwin-Williams (in Dow): "Brutal bear market"
• Williams-Sonoma: "Not deathly bear market, but not bullish"
• Whirlpool: "Brutal bear market"
• Home Depot: Down almost 5 today (was -9 pre-market, +2, finished -5)
  • Said comps going forward "not very good"
  • Gary: "We've done our own little channel checks at Home Depot. And I wouldn't say things are bad, but they're soft. Stock's saying so."
• Home builders, home-related: Weak

CONSUMER STAPLES - "HOLY CRAP"

• Procter & Gamble (in Dow): "Holy crap"
• Clorox: "Holy crap"
• Colgate, General Mills: "Holy crap"
• Tobaccos, Pepsi, Coke: Bearish
• Alcohol stocks: "Don't get me started. That's good news. Bad news for the stocks, good news that people aren't drinking as much. Bearish."

CHINESE ADRS - "Just plain old bearish now"

RESTAURANTS - MOSTLY DISASTER

• Only 2 Strong (relative strength): Dine Brands (IHOP/Applebee's), Restaurant Brands (Burger King/Tim Hortons)
• Kava Group: "Don't dare look"
• Chipotle: "Don't dare look. I mean, holy crap"
• Cracker Barrel: 72 → 23.50 (aftermarket today, down $3+)
  • Gary: "How the hell can the CEO keep a job? Nothing personal. She's overseen a stock going from $72 to $23.50 now in the aftermarket. Hey, let's keep her."
  • Lowered guidance again
• Others "just plain old" weak

TELECOM - "Bearish"

• AT&T, Verizon, T-Mobile

UTILITIES - "Bearish"

• "Interest rate sensitive"

IMPORTANT INDIVIDUAL NAMES:

• Costco: Bear market
• Netflix: Bear market
• Boeing: "Looks like it just failed the 50-day"
• Meta: "Just looks like it failed the 50-day. Maybe failed."
• Uber: Same (failed 50-day)
• Tractor Supply: Same
• MasterCard, Visa: "Just plain old bearish"

HEALTHCARE - GETTING "SCHMEARED" FAST

• Gary: "Remember we were telling you how healthcare really coming on? Well, that didn't last too long. It didn't last too long. In fact, healthcare kind of getting schmeared right now."
• Eli Lilly: "Stock went crazy to the upside and nine straight days down, down about 130 points"
  • Why? "Major league competition" for their drug
  • Gary's note: "It really works. I hadn't seen, I'm not going to mention who, somebody in about four months, who was not thin... just lost everything. Took whatever and boy, oh boy, wow. Look great. They say they feel great. Stuff works."
• Amgen: 346 (new yearly high 4 days ago) → 313 (today) = $33 drop in 4 days
  • Gary: "That's what we mean by coming after the healthcare"

ECONOMICALLY SENSITIVE - Major names failing

• Carrier (air conditioning): "Brutal bear market"
• GE: "Looks like it's topped"
• Roper (ROP): "Brutal bear market"
• United Rentals: "Just a brutal top and bearish phase now to that important name"

DEFENSE STOCKS - "Mostly bearish"

RETAILERS TO AVOID:

• Crocs: "Don't you dare go look"
• Lululemon: "Don't you dare look. Holy smokes to that one."
• Target: "Don't you dare look"

Leading Stocks 🚀

BIG BANKS (Except JPM):

• Goldman Sachs: Strong
• Morgan Stanley: Strong
• Citigroup: Strong
• Bank of New York: Strong
• Wells Fargo: Strong

PRIVATE EQUITY - "Coming on strong":

• Blackstone, BlackRock, Evercore, KKR

OTHER FINANCIALS:

• State Street Bank, Invesco, Synchrony Financial

CANADIAN BANKS - "Stronger than our banks"

MEGA-CAPS:

• Broadcom, Apple, Google: Strong
• Tesla: Trying (but weakness underneath)

STRONG RETAIL:

• Abercrombie & Fitch, American Eagle Outfitters, Bubarn, Estee Lauder, Five Below, Ralph Lauren, Ross Stores, TJ Maxx, Urban Outfitters, dollar stores

GOLD & SILVER:

• Very, very strong
• Silver had "bang-up day today"

Lagging Stocks 📉

JPMORGAN (JPM) - The One Bank Failure

• Down $15 today
• Gary: "Stock was acting perfect. And they had this conference and they announced something about lower rate on fees for certain things. And they just hit the crap out of that thing today."
• "Amazingly, J.P. Morgan is the one you always depend on. Nope."

HEALTHCARE IMPLOSIONS:

• Eli Lilly: Down 130 points in 9 straight days
• Amgen: 346 → 313 in 4 days

AFTER-HOURS BOMBS:

• Cracker Barrel: Down $3+ (lowered guidance, kept CEO), 72 → 23.50
• Dave & Buster's: "Getting yonked"

HOME DEPOT:

• Down almost 5% (was -9 pre-market, rallied to +2, finished -5)
• Comps going forward "not very good"

AUTO PARTS:

• AutoZone: Down $270 (-7%) = "Classic bear market"

Gary's Positioning 💰

• Did NOT buy healthcare (was "a little bit mad about it")
• Gary: "I'm not mad anymore. They're actually really hitting it pretty darn good and brought it down pretty quickly."
• "So it's not all, but a lot of avoiding this second until otherwise"

Crash/Correction Outlook 🎯

FED TOMORROW - GARY'S MAJOR CONCERNS:

The Setup:

• Fed likely going 3.75% → 3.5%
• But: 10-year yield went 3.988 → 4.186 in just 7-8 days
• Gary: "You may not think that's a big move, but it is in a short period of time."

Gary's Core Worry: "We're just here wondering, is the market trying to tell him something? And if he lowers rates too much, what is that going to mean?"

"What if he lowers rates, but the 10-year yield keeps going higher? What is the 10-year yield? Well, those are your mortgage payments. It's cost of capital."

The Fed's Core Problem: "The Fed only controls short-term rates. Unless they are printing money out of thin air to buy up the whole freaking bond market like they did a few years back... they say because of COVID."

"They stayed there, they kept it there, and they created all the stupid inflation. Inflation finally came down when they stopped printing money and they started raising rates because they were forced to."

Why Powell Doesn't Get Blamed: "Remember, the reason why he doesn't get buried for the inflation is because he is not elected. So they all blame Biden. Biden gets the blame because he called the transitory and also his S-9, S-10, S-11 federal spending increase in the government."

"As much as I am not through with Trump, Biden was the worst president we have ever had by far."

The Rule: "What have we said to you for a very long time about the Fed and rates? That they had better listen to the market. If the market is screaming, else there could be problems."

"If the market is screaming, don't lower rates, and they lower rates, there could be a problem. If the market is screaming, lower rates, and they don't, there could be a problem."

The Trump/Hassett Problem: "You have President Trump who has telegraphed Kevin Hassett as the next head of the Central Bank after Powell's gone, which means Donald Trump will be running the Fed."

"Kevin Hassett's just a puppet, nothing personal, and I'm not even saying that as a put-down, it just is. It's the nature of the beast. The President likes control, and he's going to put somebody in there that he can control. There's no doubt in my mind."

Gary's Worry: "Right now, you have a little bit of persistence to the upside in long yields. And when we say long, that's duration."

"Powell has never listened to the market because he thinks he's God. And certainly the President won't listen to the market because he thinks he's double God. He can do no wrong."

"And probably if I'm a billionaire and I became President for a second time after being blasted for a few years and impeached twice, I'd probably think I'm God too."

Stock Selection Critical: "So we're just letting you know there's a lot of ick. Still, while the indices are up near the highs, the Russells up near the highs, even the mid-caps. So very important stock selection. Muy importante right now."

"Again, you better be in the right spots. These areas I just told you about."

"Market's quite interesting, I must say. Again, you better be in the right spots, kids. You better be in the right spots."

Key Observations 💡

How Gary Knows What to Avoid: "There's still a lot of areas to definitively avoid. And how do we figure that out? We know what bear markets look like. We know what bearish markets look like. We know where trouble lies based on the action, not based on what somebody thinks."

Webcast Today: "I also have to let you know we did an early webcast today. And I have to tell you, there's still a lot of areas to definitively, definitively avoid."

Payroll Companies = Job Market Warning: "We already know the jobs market is on the troublesome side. ADP and paychecks remain in a brutal bear market. And if that ain't something to watch, I don't know what is. Brutal bear markets."

"Just so you know what they do, I use paychecks. They handle all my stuff." (Gary's personal endorsement of what they do, even though stock is brutal)

Healthcare Reversal: "Remember we were telling you how healthcare really coming on? Well, that didn't last too long. It didn't last too long."

"I was actually a little bit mad about it. I'm not mad anymore. They're actually really hitting it pretty darn good and brought it down pretty quickly."

Eli Lilly Drug Works: "It really works. I hadn't seen, I'm not going to mention who, somebody in about four months, who was not thin and more than, and just lost everything. Took whatever and boy, oh boy, wow. Look great. They say they feel great. Stuff works. Just letting you know."

Hotels Pattern: "About two weeks ago, the hotels looked like they had a battle. Sitting near the highs, looked like they're about to go topside and a nice little breakout to the upside. They have all tucked in badly like frightened turtles."

Norwegian Insider Buying: "Norwegian, big insider buying as of recent. But just because somebody's buying insider-wise doesn't mean the stock goes up."

Home Depot Channel Checks: "We've done our own little channel checks at Home Depot. And I wouldn't say things are bad, but they're soft. Stock's saying so."

Cracker Barrel CEO: "How the hell can the CEO keep a job? Nothing personal. She's overseen a stock going from $72 to $23.50 now in the aftermarket. Hey, let's keep her."

Alcohol Stocks: "Don't get me started on the alcohol stocks. That's good news. Bad news for the stocks, good news that people aren't drinking as much. Bearish."

Amgen Move: "Amgen was at new yearly highs four days ago at 346. It's 313 in four days. That's what we mean by coming after the healthcare."

The Broad Market Lost: "We've had a good broad base move in the market, but I think we're already losing that broad base, particularly."

Powell Commentary: "Again, nothing personal. I don't know the guy. He's nauseating. Overrated adult. Seriously. About as overrated as can be."

Personal Note - Weather: "I'm back in Florida. I left 15 degree weather, I believe we have like 68 or 70 here in Florida. Why do I even go up to the Northeast? I gotta tell you, 15 degrees, that's cold, kids."

Fantasy Football: "I'm in first place in my fantasy league all by myself with three weeks to go. I should have already won it. But there were a couple of weeks where Lamar Jackson just screwed me. But I am in first place."

Luigi/UnitedHealth CEO Murder 🚨

Gary's Disgust: "I saw a video. It looked like about 25 women outside the court. One poster said, I want to marry you, Luigi. Another one, what the frick is the matter with these people? What happened to these people?"

"They're actually going to the court and praising him and celebrating. They're cheerleading a guy that took out a frickin' gun and, like a cowardly prick that he is, shot a man in the back dead who has two kids and a wife and never did anything to anybody."

"And these women, what the hell is going on? Are they nuts? By the way, it was mostly, there was some men too. And they've raised money for his defense. He's a murderer."