New Year Weekly commentary / stock picks (2025 Wrap up)

Executive Summary: Strong Year, Cautious Near-Term Outlook

Despite solid gains in 2025—led by a 16.87% rise in the S&P 500 and a 20% advance in the Nasdaq—recent market behavior suggests growing near-term caution. Shaky holiday trading, weakening technicals, an increase in distribution days, narrowing leadership within technology, defensive sector rotation, prolonged crypto weakness, and unfavorable seasonal and presidential-cycle dynamics all point to a market losing momentum. While the long-term outlook remains constructive, the lack of a meaningful pullback to reset sentiment makes another strong upside year unlikely, increasing the probability of a choppy or relatively flat market ahead, with elevated downside risk if these warning signals persist.