Darius Dale recently joined Cheryl Casone on Fox Business to discuss the state of earnings, energy markets, and Fed policy heading into the year-end. Despite short-term volatility, we continue to view our six-month-old Paradigm C theme as supportive of one of the most constructive investment backdrops in years.
If you missed the discussion, here are three key takeaways that likely have huge implications for your portfolio:
1) Corporate Earnings Continue to Defy Bears
Darius noted that despite Tesla’s miss, this is “the best earnings season we’ve seen since Q2 of 2021,” with roughly 85% of S&P 500 companies beating earnings and sales growth accelerating. He emphasized that these results confirm the ongoing resilience of the U.S. economy and the durability of the current Paradigm C bull market.
Key Takeaway: Broad-based earnings strength continues to validate 42 Macro’s Paradigm C framework and supports staying risk-on for investors managing risk over medium-to-long-term time horizons.
2) Small-Cap Rotation on the Horizon
With small-cap earnings turning positive and projected to grow sharply into 2026, Darius sees a coming rotation as underperforming managers chase returns beyond the “Mag 7” as we head into 2026. Fiscal and monetary easing, coupled with deregulation and increased M&A, will likely fuel a new leg of broad-market leadership.
Key Takeaway: Fiscal easing, deregulation, and rotation pressure could make small caps one of 2026’s best-performing factors.
3) Fed Policy Still Playing Catch-Up
Darius warned that the Fed’s delayed response to a weakening labor market and loss of timely data access underscores a recurring pattern of reactionary policy errors. He argued that continued labor softening increases the odds of accelerated easing, and that investors should stay positioned for liquidity-led growth.
Key Takeaway: Our research still indicates structural regime change at the Fed remains as likely, and 42 Macro’s KISS and Dr. Mo frameworks are built to capitalize on it.
Final Thought: Staying on the Right Side of Paradigm C
“Paradigm C remains one of the best investing environments I have seen in my career, which includes helping investors maximize upside capture during the explosive bull markets of 2009-10, 2013-14, 2016-17, 2020-21, and 2023-24,” Darius adds. With earnings strength, policy easing, and broadening market leadership, 42 Macro’s KISS and Dr. Mo systematic frameworks help investors block out the noise and maximize upside capture in the current bull market.
If you are not confident your portfolio is positioned correctly for the evolving macro landscape, partner with 42 Macro for data-driven insights and proven risk management overlays—KISS and Dr. Mo—to help you stay on the right side of market risk.
No catch—just real insights to help you stay ahead in the #Team42 community.
Best of luck out there,
— Team 42
