12/1/2025 ValuEngine Weekly Market Summary & Commentary

What a difference a week makes! In last week’s update, we documented empirically that the story of November 2025 thus far was rotation from mega-cap tech and growth stocks to value stocks. The Invesco Nasdaq-100 ETF, QQQM, and the SPDR S&P 500 ETF, SPYM, were both deep into negative territory.

Upsetting the narrative, Thanksgiving week was one that “mega-tech” should be thankful for. Both large-cap ETFs were up every day. This recovery shaved the decline on QQQM to a mere 1.6% on the month while SPYM fell just 0.5%. Foreign markets had similar shavings of earlier declines for the month. EEM, the iShares MSCI Emerging Markets ETF, lost just 1.6% while the loss for the month in developed markets on the iShares MSCI EAFE ETF was just 0.2%. Value still was the US winner for the month with VTV, Vanguard Value ETF, gaining 1.6% while Vanguard Utilities ETF rose 0.5%. IBIT also shaved its −23% decline to −19% for the month, not enough to save it from being called Black October by Bitcoin traders. Untouched by this reversal was gold as GLDM, SPDR Gold MiniShares Trust, continued to outclimb everything with a 3.4% gain.

Most strategists see last week as the start of the proverbial Santa Claus rally and given that the month of December has generally been a good month to own stocks, we would tend to agree. The opinions are more mixed on whether large-cap growth will continue to lead. In terms of our ETF ratings, our models are in the large-cap camp. QQQM is rated 5 (Strong Buy) with SPYM rated 4 (Buy). Our prediction model is still bullish on NVDA despite its high volatility, with a 5 rating. Most of the other top six stocks in the S&P 500 are rated 4 including Microsoft (MSFT), Amazon (AMZN), Broadcom (AVGO), and Alphabet (GOOGL).

Interestingly, although our model doesn’t like small-cap standard bearer IWM, the iShares Russell 2000 Small Cap ETF (rated 2), it loves its largest 10 holdings. Eight of the 10 are rated either Buy or Strong Buy. This list includes Credo Tech (CRDO), Nextracker (NXT), Guardian Health (GH), and Madrigal Pharmaceutical (MDGL), all rated 5. The 4-rated stocks include Bloom Energy (BE), Fabrinet (FN), Kratos Defense (KTOS), and BridgeBio Pharmaceutical (BBIO).

Similarly, we rate Vanguard Value ETF (VTV) at 3 (Hold) but three of the top 10 stocks are rated 4: JP Morgan Chase (JPM), Johnson & Johnson (JNJ), and BankAmerica (BAC). There are a number of other low P/E stocks that are considered relatively undervalued by our valuation model and rated 4 or 5. These include UBS Group (UBS), CVS Corp. (CVS), Coca-Cola (KO), Anheuser-Busch ADR (BUD), Mitsubishi ADR (MUFG), Novartis ADR (NVS), and CME Group (CME). On the flip side, the one stock in the top 10 of VTV rated 2 (Sell) is United Healthcare (UNH).

Finally, since ’tis the retail season, one retail stock that is rated 5 is ERMENEGILDO ZEGNA (ZGN), the luxury designer.