As of Monday’s close (Dec. 15), several big-picture indicators for evaluating sentiment continue to indicate a risk-on bias. Extending signaling from recent history, the trend remains positive for the ratio of two global asset allocation ETFs via an aggressive strategy () vs. its conservative counterpart ().
Risk-on signaling also rolls on for the US equity market, based on the ratio for a conventional measure of the US stock market () vs. a low-volatility () counterpart, which proxies as a relatively conservative strategy for holding US shares. This indicator has surged this year, following the April selloff. As the end of the year comes into focus, this measure of the risk appetite continues to skew strongly positive.
A similar story applies to another dimension of investor sentiment for US stocks vis-à-vis the ratio of cyclical stocks () vs. defensive shares ().
Meanwhile, the long-suffering run for small-cap stocks () vs. large caps (SPY) has been showing hints of reversing lately, but not enough to break the trend in favor of big-cap shares, at least not yet.
Ditto for the relative weakness for value risk factor () in the equities market vs. large-cap growth ().
Meanwhile, relative strength in foreign stocks () vs. US shares () continues, but recent trading activity shows the trend has flatlined lately, raising questions about whether offshore equities will continue to outperform in 2026.
