Market breadth gives us more confidence for 2026 performance, says US Bank's Tom Hainlin

Market Overview - The market reached an all-time high on Christmas Eve, driven by industrials and financials rather than technology, indicating a broadening of sector performance [2] - Strong performance has also been observed in mid and small-cap stocks, suggesting a more diverse market participation beyond just technology [3] Consumer Confidence - The consumer remains a key driver of US economic growth, supported by anticipated rate cuts and tax benefits from recent legislation [4] - Layoffs are a critical area of focus; as long as they remain subdued, consumer spending is expected to continue positively into 2026 [5] Business Investment - Businesses are investing their earnings into capital equipment and AI, which are crucial for driving economic growth [6] - Continued investment in AI and productivity tools is expected, benefiting not only the AI industry but also companies leveraging these technologies for growth and profit margin maintenance [7] Investment Opportunities - In the bond market, there are good yields available, particularly in mortgages not backed by federal agencies, which can capture additional income from a healthy consumer base [8] - Foreign equities in Europe and Asia present opportunities due to favorable valuations and supportive monetary and fiscal policies, along with potential for dividend yields and share buybacks [9] - A broad allocation strategy is preferred for foreign equities, focusing on both multinationals and local champions in Europe and Asia, especially those involved in AI investments [10][11]