The Rate Cut Trade: Three ETFs to Buy Now

Fresh news and strategies for traders. SPY Trader episode #1446. Amid economic softening, the market anticipates a Fed rate cut. We analyze recent corporate volatility (MDB, BA) and provide three actionable strategies: hold VOO, buy dips in QQQ/XLK, and accumulate TLT for a profitable duration play.

Episode Transcript

(00:00):
Welcome to Spy Trader , the only podcast that gives you actionable insights before the market even wakes up .
I'm your host , Barry Cashflow , and it's 5 am on Thursday , December 4th , 2025 , here on the Pacific Coast .
The US market is currently defined by cautious optimism , caught between a slowing economy and the desperate hope for a Fed rate cut .

(00:23):
Let’s dive into what’s driving the SPY , QQQ , and TLT today .
The biggest news is the macroeconomic softening .
The Fed’s policy rate is in the 3.75 percent to 4.00 percent range , but the market is pricing in a strong probability of another quarterpoint cut soon .
This expectation is fueled by weakening domestic data .

(00:46):
The ADP privatesector employment report showed a surprise drop in jobs , and the Fed’s Beige Book indicated declining employment and weaker consumer spending , especially among middle and lowerincome households .
This softening is why the overall market , tracked by SPY , remains bullish longterm — bad economic news is suddenly good news for stocks , as it forces the Fed’s hand .

(01:12):
On the corporate side , we saw massive volatility .
MongoDB , or MDB , exploded twentyfive percent after reporting a blowout quarter and upbeat guidance , proving that strong companyspecific execution can override macro fears .
Industrial heavyweight Boeing , ticker BA , jumped nine percent after its CFO projected a return to positive free cash flow .

(01:37):
However , we saw signals of overoptimism .
Macy’s , M , sank six percent despite beating revenue and earnings estimates , showing that a strong quarter was already fully priced in .
Our analysis confirms a heavy reliance on the rate cut narrative .
While Technology , driven by NVIDIA and Microsoft , continues its structural outperformance in the QQQ and XLK , high valuations led to a recent selloff in thematic investments like Palantir .

(02:09):
This means tech stocks are still driving the longterm trend , but volatility remains high .
A key tactical insight comes from the bond market .
The iShares 20Year Treasury ETF , TLT , recently dropped due to international news — specifically from the Bank of Japan — temporarily overshadowing US domestic data .

(02:32):
This drop creates a fantastic entry point if you believe the Fed is truly committed to domestic easing .
So , how do we trade this ?
We have three concrete recommendations today .
First , for core portfolio exposure , we recommend you hold or add to broad market ETFs like Vanguard S&P 500 ETF , VOO .

(02:56):
This strategy captures the momentum from large caps without the concentrated risk of a pure Nasdaq fund .
Second , for tactical technology exposure , we recommend you buy dips in growth funds .
Use news of valuation concerns to accumulate small positions in the Invesco QQQ Trust or the Technology Select Sector SPDR Fund , XLK .

(03:20):
The AI growth story is structural ; volatility is your friend here .
Finally , for a fixedincome duration play , we recommend increasing exposure to the iShares 20 Year Treasury Bond ETF , TLT .
Since its recent decline was driven by external factors and not domestic policy , buying TLT now allows you to profit if the expected US rate cuts materialize , which would push bond prices higher .

(03:49):
That’s all for this morning’s Spy Trader .
Manage your risk , keep your cash dry , and I’ll catch you on the next update .
Good trading .