Fed Pivot Playbook: Growth, Rates, and Hedges

Fresh news and strategies for traders. SPY Trader episode #1440. We break down the market's strong close to November, driven by macro data confirming a soft labor market and pricing in an 87% chance of a December Fed rate cut. Discover our 'Growth with a RateSensitive Cyclical Hedge' strategy, advising core tech exposure (QQQ), tactical plays in ratesensitive sectors like Utilities (UTIL), and essential fixedincome ballast (BND) for defense.

Episode Transcript

(00:00):
Welcome back to Spy Trader !
I'm your host , Barry Bucks , and it is 5 am on Friday , November 28th , 2025 , Pacific Time .
Happy holidayshortened trading day !
We are capping off what has been a truly bumpy November , but the indices are trying to end the month on a high note .

Futures are pointing slightly higher across the board , driven by the most important factor in the market right now (00:18):
the highly anticipated Federal Reserve rate cut .
While the Nasdaq Composite , tracked by QQQ , took the hardest hit this month , falling over 2.15% amid those valuation worries in megacap tech , the S&P 500 is showing resilience .

The core reason for today's optimism is the macro data (00:43):
the latest Beige Book suggests economic activity was ' little changed , ' with a softer labor market .
This softening confirms the Fed’s previous hikes are working , leading the market to price in an aggressive 87% probability of a 25basispoint interest rate cut in December .

(01:07):
Looking at sectors , this ratecut optimism is lifting ratesensitive plays .
Utilities , tracked by UTIL , and Materials are seeing strong recent daily gains .
Technology ( XLK ) is still seeing strong buying pressure , up 1.17% in recent data , thanks to that structural AI infrastructure spending theme .

(01:30):
But remember , selectivity is crucial .
Cloud software companies Zscaler ( ZS ) and Workday ( WDAY ) both experienced significant drops after giving cautious forward guidance , confirming that even in strong sectors , high valuations mean zero margin for error .
On the flip side , we have specific bright spots like the warehouse automation firm Symbotic ( SYM ) , which surged 12.95% following strong quarterly results and multiple analyst price target increases , and Robinhood Markets ( HOOD ) , which popped on news of expanding into futures trading .

(02:08):
So , what is the trade ?
We are running a ' Growth with a RateSensitive Cyclical Hedge' strategy .
First , maintain your core growth exposure .
Despite the November dip , the longterm trend favors tech leadership driven by AI and easing rates .
Use the Invesco QQQ Trust ( QQQ ) for broad technology exposure , or the Vanguard S&P 500 ETF ( VOO ) for core diversification .

(02:36):
For a highconviction microplay , Symbotic ( SYM ) looks compelling based on its solid fundamentals and analyst upgrades .
Second , tactically capitalize on the rate cut .
Since the December cut is so highly probable , own ratesensitive sectors .
Consider the Utilities Select Sector SPDR ETF ( UTIL ) or the Financial Select Sector SPDR Fund ( XLF ) , both of which benefit from lower borrowing costs and reduced recession risk .

(03:06):
Finally , don't forget defense .
Given the volatility , core fixed income is essential .
If the Fed cuts rates , bond prices rise .
Using ETFs like the Vanguard Total Bond Market ETF ( BND ) serves as portfolio ballast and a hedge against any unexpected sharp economic slowdown .

(03:28):
That is all the time we have for this edition of Spy Trader .
Trade smart , stay nimble , and I will catch you on the next move !