MTC Market Insights

December 1, 2025

Defensive Rotation Takes Hold in November

Key Takeaways

• The government shutdown ended (for now) as markets wait to digest its possible impact during the holiday shopping season. Post-holiday negotiations will resume as the January 30 deadline approaches.

• We had a lighter than usual month of economic data releases due to the government shutdown. Two key economic indicators (CPI and payrolls) most used by the Fed were both punted forward to December.

• Equities pivoted toward value, small-cap, mid-cap and equal-weight segments as tech valuation concerns nudged investors toward defensive sectors led by health care, energy, materials and consumer staples¹.

• Q3 earnings surprised to the upside with double digit earnings growth for the 4th consecutive quarter and positive revisions. Corporate earning resiliency remains intact as we approach 2026.

Sources:

• 1 FactSet