Core Viewpoint - Morgan Stanley's Chief Investment Officer Mike Wilson presents a bullish outlook for the U.S. equity market, predicting high teens earnings growth and focusing on the consumer goods sector as a key investment area [1][5]. Group 1: Economic Drivers - Wilson describes the market's path as "crystal clear," driven by a stabilizing Federal Reserve and legislative support that will rejuvenate the consumer sector [2]. - He emphasizes a combination of falling interest rates and fiscal stimulus as factors that will unlock pent-up demand in the consumer goods sector [2][3]. Group 2: Consumer Goods Sector Performance - Wilson identifies consumer goods as his top conviction pick for the year, suggesting that the sector is poised for a rebound after experiencing a "rolling recession" [2]. - The Dow Jones U.S. Consumer Goods Index has shown a performance of 9.62% over the last six months, while year-to-date performance is -1.40% and one-year performance is 6.42% [4]. Group 3: Earnings Outlook - Contrary to concerns about a slowdown, Wilson asserts that the earnings outlook is strengthening, forecasting earnings growth in the "high teens" as the market rally expands beyond the technology sector [5]. - A significant factor in this optimism is the Federal Reserve's renewed asset purchasing to stabilize funding markets, which Wilson views as a positive development for investors [6].

Group 1: Market Outlook - Morgan Stanley's Chief Investment Officer Mike Wilson presents a bullish outlook for the U.S. equity market, predicting high teens earnings growth and focusing on the consumer goods sector [1][5] - Wilson describes the market's path as "crystal clear," driven by a stabilizing Federal Reserve and legislative support that will rejuvenate the consumer sector [2][6] Group 2: Consumer Goods Sector - The consumer goods sector is identified as a top conviction pick for the year, expected to rebound after a "rolling recession" [2] - Wilson highlights favorable factors such as falling interest rates and fiscal stimulus that will unlock pent-up demand in the consumer goods sector [2][3] Group 3: Earnings and Federal Reserve Support - Wilson argues that the earnings picture is strengthening, forecasting earnings growth in the "high teens" as the market rally expands beyond the tech sector [5] - A key factor in this optimism is the Federal Reserve's shift in policy, including asset purchases to stabilize funding markets, which Wilson views as a significant support for investors [6] Group 4: Market Performance - The Dow Jones U.S. Consumer Goods Index has shown a performance of 9.62% over the last six months, while year-to-date performance is at -1.40% [4] - The iShares US Consumer Staples ETF has a one-year performance of 5.25%, indicating some resilience in the consumer staples segment [4] Group 5: General Market Trends - Year-to-date, the S&P 500 index is up 0.63%, and the Dow Jones is up 2.41%, while the Nasdaq 100 is down by 0.07% [9] - The SPDR S&P 500 ETF Trust and Invesco QQQ Trust ETF closed lower recently, with SPY down 0.01% and QQQ down 0.60% [10]

Core Viewpoint - Underinvestment in the energy sector is a significant reason to invest in oil, with expectations of price recovery due to supply/demand imbalances and geopolitical factors [1][2][4]. Group 1: Oil Price Forecasts - The average forecast for oil prices is $58 per barrel for 2026, reflecting a supply/demand imbalance [1]. - Josef Schachter predicts crude oil will reach $80 per barrel this year, driven by demand from non-OECD countries and the transition to green energy requiring more fossil fuels [7]. Group 2: Investment Opportunities - Kevin Muir suggests that the current geopolitical climate, particularly the American takeover of Venezuela, presents a buying opportunity for oil [2][3]. - Muir's previous advice to invest in gold miners has proven successful, with one ETF rising 157% over the past year, indicating potential for similar gains in oil investments [5]. Group 3: Market Dynamics - The cycle of oil prices typically begins with low prices leading to reduced investment, followed by a gradual rise as the market adjusts to the underinvestment, ultimately resulting in a price squeeze as short sellers are forced to cover their positions [4]. - Muir emphasizes that global growth is expected to surprise positively, suggesting that oil prices will likely follow the upward trend seen in other commodities like gold, silver, and copper [8].

Summary of Euro Area Outlook 2026 Industry Overview - The report focuses on the Euro area economy and its outlook for 2026, highlighting both cyclical improvements and structural challenges. Key Points Economic Growth Forecast - Euro area growth is forecasted at **1.3%** for 2026, with a slight increase to **1.4%** on a Q4/Q4 basis, up from **1.3%** last year, aligning with consensus expectations [3][6][34] Factors Driving Cyclical Improvement 1. **German Fiscal Stimulus**: - Germany's fiscal expansion is expected to provide a significant boost, with the deficit projected to rise to **3.7%** of GDP in 2026, contributing **0.5 percentage points** to growth [9][12] 2. **Diminished Global Trade Tensions**: - The negative impact from global trade tensions is anticipated to lessen, with a previous **0.4%** hit to real GDP from tariffs expected to fade [15][19] 3. **Robust Consumer Spending**: - Real household income growth is projected at **1.5%**, with consumption growth also expected at **1.5%** in 2026, supported by lower energy prices [19][44] Structural Headwinds - Despite cyclical improvements, significant structural challenges remain: - Increased competition from China's renewed export push is expected to negatively impact European trade, particularly affecting Germany (estimated **0.9%** hit to GDP) and Italy (estimated **0.6%**) [23][30] - High energy costs, underinvestment in high-tech sectors, regulatory burdens, and demographic shifts are identified as ongoing domestic challenges [27][30] Labour Market and Inflation - Unemployment rates are expected to remain near historic lows, with wage growth projected to slow to **2.9%** by the end of 2026, aligning with a medium-term inflation target of **2%** [37][41] - Core inflation is expected to dip slightly below **2%** by the end of 2026, influenced by a stronger Euro and lower energy prices [44][50] Monetary Policy Outlook - The European Central Bank (ECB) is expected to maintain current rates in 2026, with potential cuts requiring a clear catalyst, such as a significant economic downturn or a pronounced inflation undershoot [48][51] - A return to rate hikes would depend on demand-driven inflationary pressures or significant shocks leading to deviations from inflation targets [55][56] Country-Specific Focus - **Germany**: Monitoring the quality of public spending and reform agenda is crucial for improving medium-term growth [62] - **France**: Political and fiscal risks remain, with a projected government deficit reduction from **5.4%** to **5.1%** of GDP in 2026 [66] - **Southern Europe**: Continued economic resilience is noted, with structural transformations in Spain, Portugal, and Greece [71] Policy Initiatives - EU policymakers have an opportunity to implement reforms that could enhance economic performance, focusing on reducing vulnerabilities and building a single market [74] Additional Insights - The report emphasizes the importance of monitoring fiscal policies and structural reforms across member states to sustain the cyclical recovery and address long-term challenges [4][61]

Summary of US Softlines Retail Industry Outlook Industry Overview - The report focuses on the **US Softlines Retail** industry, indicating a positive outlook for 2026 based on consumer sentiment and spending intentions [2][4]. Core Insights 1. **Consumer Sentiment Improvement**: Recent survey data shows US consumers are feeling more optimistic, leading to a more bullish stance on Softline stocks compared to the previous month [2][3]. 2. **Holiday Season Expectations**: A satisfactory finish to the 2025 Holiday season is anticipated, with few companies expected to miss consensus EPS expectations for Q4 [2][4]. 3. **Spending Intentions**: Consumer spending intentions for softgoods over the next 90 days are projected to increase by **2.9%** year-over-year, with a **535 basis points** acceleration month-over-month [4][14]. 4. **Fiscal Stimulus Impact**: The potential for US fiscal stimulus is expected to drive sales growth in the Softline industry, contributing to stock momentum into January 2026 [2][3]. Financial Metrics 1. **P/E Ratio Analysis**: Softline stocks currently have a P/E ratio **10% above** the past 10-year average, yet a **24% potential upside** is identified, suggesting further P/E expansion as spending growth rates improve [3][4]. 2. **Stock Recommendations**: Analysts favor stocks such as ONON, RL, GIL, LEVI, and others, while advising against NKE and Sell-rated M, KSS, and DDS [3]. Consumer Behavior Insights 1. **Spending Plans**: **27.0%** of consumers plan to spend more this Holiday season, compared to **23.2%** who plan to spend less, marking a **380 basis points** improvement from the past 11-year average [8]. 2. **Post-Christmas Shopping**: **70.1%** of shoppers intend to participate in post-Christmas sales, slightly down from the previous year but above the 10-year average [8][91]. 3. **Shopping Completion Rates**: **44.2%** of consumers had completed their Holiday shopping by the survey date, an increase of **160 basis points** year-over-year [8]. Economic Outlook 1. **Consumer Confidence**: Confidence among consumers has increased across all income demographics, with notable improvements in spending intentions among middle-income consumers [9][28]. 2. **Financial Security**: **42%** of respondents feel they are saving enough for future needs, up **120 basis points** month-over-month, indicating improved financial security [9][79]. 3. **Wealth Perception**: **22%** of consumers feel wealthier than the previous year, the highest percentage since 2019, with the average value of financial assets (excluding homes) at **$472K**, up **8%** year-over-year [9][66]. Additional Insights 1. **Concerns Over Economic Factors**: Consumers are less worried about macro issues like inflation and tariffs, which may contribute to their improved willingness to spend [5][9]. 2. **Demographic Spending Trends**: Upper- and middle-income consumers, who account for approximately **90%** of industry spending, are showing stronger spending intentions compared to lower-income households [9]. 3. **Political Influence on Spending**: The report notes differences in spending intentions based on political affiliation, with Democrats showing lower confidence and willingness to spend compared to Republicans [99][100]. This comprehensive analysis highlights the positive trajectory of the US Softlines Retail industry, driven by improved consumer sentiment, spending intentions, and potential fiscal stimulus effects.

Market Overview - The Dow is up by 0.5% today, but remains in the red for the week [1] - The NASDAQ has increased by over 1% today, turning positive for the week, while the S&P 500 is up just under 1% [2] - The bond market shows a slight increase in yields, with the 10-year Treasury yield up by 3 basis points today [3] Sector Performance - Technology has been a strong performer this week, with large-cap tech (XLK) up by 2% [4] - Consumer discretionary, led by Tesla and Amazon, is up by 1.3%, while energy has seen a decline of about 3% [5] - Notable stock movements include Nvidia up by 3.74% and Goldman Sachs up by 2% [6] Economic Outlook - Markets are reacting to cooler inflation data and a strong growth backdrop anticipated for 2026 [7] - Investors are focusing on potential rate cuts, earnings, and sector rotation as they prepare for the new year [7] - The Federal Reserve has cut rates by 175 basis points from the highs, indicating a move closer to a neutral rate [13] Fiscal Stimulus and Growth - Significant fiscal stimulus is expected to impact the economy in 2026, including corporate and personal tax changes [16] - The potential for increased capital expenditures (capex) is anticipated due to new corporate stimulus measures [16] AI and Technology Sector - The AI theme remains volatile, with a shift from broad market exposure to more selective stock picking expected in 2026 [18] - The MAG 7 tech stocks have shown mixed performance, with some like Alphabet and Nvidia performing well, while others like Microsoft and Meta have lagged [19] Small Cap Stocks - Small caps have recently rebounded, but there are concerns about sustainability given past performance trends [23] - The current small-cap index composition differs significantly from historical norms, leading to skepticism about future growth [25] Retail Sector Insights - Rivian's stock has been upgraded by Wedbush, citing 2026 as a pivotal year for the company [27] - KB Home reported fourth-quarter earnings that missed estimates, indicating ongoing challenges in the housing market [29] - Nike's second-quarter results reflect a turbulent year for retailers, with uneven performance across the sector [31] Honeywell's Performance - Honeywell's stock has underperformed compared to the broader industrial market, largely due to limited exposure to AI and data center growth [90] - The company is expected to benefit from the spin-off of its aerospace business, which could enhance its market position [92] EV Market Outlook - The EV market is facing headwinds, including the expiration of tax credits, but long-term demand is expected to remain strong [74] - ChargePoint's CEO emphasizes the importance of innovation and product development to drive growth in the EV charging sector [78] - The commercial and fleet markets for EVs are anticipated to grow as businesses seek lower total cost of ownership [86]

Scott Croniner joins us from uh city. He's US equity strategist. Scott, not to ask how much you can deadlift, but feel free to offer, you know, [laughter] >> let's just say, Kelly, I can lift my weight, but that's about it.>> Which is looking like a little less than that. All right. So, you do think a more dovish Fed is is a plank of this bull market story.>> Yeah, it's it's kind of interesting. We just published a note that hit a few minutes ago that I I titled uh the data is dead, long live the data. And ...

Core Viewpoint - The state of the labor market is critical for determining the Federal Reserve's future actions, with expectations of a weaker labor market leading to a more dovish Fed stance than currently anticipated [2][3]. Economic Outlook - The expectation is for one more rate cut from the Fed, while the market is pricing in two or more cuts [4]. - Growth is expected to hold up better, and inflation is anticipated to improve, which will lead the Fed to adopt an accommodative policy [5]. - The fixed income market is projected to be less volatile in the coming year compared to the previous year, with a return to a carry trade keeping long-term rates stable [6]. Monetary Policy Divergence - There is a divergence in monetary policy globally, with some countries tightening while the US and China are expected to maintain accommodative policies [7]. - Recent Fed votes showed significant divergence among members regarding rate cuts, highlighting the importance of upcoming economic data [8]. Equity Market Expectations - The equity market outlook for 2026 is constructive, with expectations of increased nominal growth and strong earnings supported by fiscal stimulus and deregulation [8][9]. - Fiscal stimulus is expected to be front-loaded in the first half of 2026, which includes tax refunds and incentives for capital expenditures [10]. Fed Chair Impact - The credibility of the Fed chair is crucial for maintaining bond market stability, and the leadership of the new chair will significantly influence this credibility [12][14]. - All candidates for the Fed chair position are viewed as credible, and the independence of the Fed is seen as a gradual process rather than a binary state [13].

The Swedish economy is set to break a three-year spell of near-stagnation as monetary and fiscal stimulus help revive household spending in 2026 https://t.co/g0baOSsOb9 ...

Very good morning to you. So we're busy waiting for nonfarm payrolls. One and a half non-farm payrolls.Looking at us features a little bit weaker, weighing on sentiment for tech here in Europe as well. What do you make of the price action heading into the yet important data points. It's been very disappointing price action and I think this kind of choppy price action with a negative bent is going to be the dynamic for the festive period.I don't think it's so much about the jobs data. I think the job today i ...