South Korea’s consumer confidence stayed above the neutral level for an eighth straight month in December, pointing to continued household optimism. https://t.co/UvecjtfBsK ...

Core Viewpoint - The US economy experienced its fastest growth in two years during the third quarter, driven by strong consumer and business spending along with more stable trade policies [1] Group 1: Economic Growth - The US economy expanded at a rapid pace in the third quarter, marking the fastest growth in two years [1] - Resilient consumer spending and business investment were significant contributors to this economic expansion [1] - Calmer trade policies also played a role in supporting the growth of the economy [1] Group 2: Market Impacts - The discussion included the potential impacts of AI on markets projected for 2026 [1] - Consumer confidence data was highlighted as a key indicator of economic health [1] - Gains in mega-cap technology stocks were noted as a significant trend in the current market environment [1]

Core Insights - U.S. shoppers are willing to spend during the holiday season, driven by attractive deals despite declining consumer confidence and price anxiety [1][2] - Retailers are heavily discounting to attract consumers, resulting in sustained traffic and sales at Tanger's outlet centers [1][2] - Holiday traffic at Tanger's outlets has been strong, with full parking lots and consistent activity noted through November and December [2] Retail Spending Trends - U.S. retail spending increased by 4.2% year over year during the holiday season before adjusting for inflation, with in-store shopping accounting for 73% of total spending [3] - Online sales also contributed to growth, rising by 7.8% compared to the previous year [3] Consumer Confidence - Consumer confidence weakened in December, with the Conference Board's index dropping to 89.1, reflecting concerns over high prices and tariffs [4] - A recent survey indicated that 41% of Americans planned to spend less this holiday season, an increase of 6 percentage points from the previous year [5] Retailer Sentiment - Retailers express confidence in demand for 2026, indicating a positive outlook despite current consumer sentiment [5] - There is a trend among brands to control their own physical retail presence as department stores consolidate [6]

Economic Growth - U.S. gross domestic product (GDP) increased at a seasonal and inflation-adjusted annual rate of 4.3% in Q3, marking the highest growth rate in two years, driven by strong consumer spending, exports, and government spending, despite a decrease in investment [2][3] Consumer Spending and Confidence - Consumer spending remains robust, particularly on healthcare and recreational vehicles, but consumer confidence has declined by 3.8 points in December, marking the fifth consecutive drop across various demographics [3][4] - The Conference Board's findings indicate that while consumers are optimistic about spending on big-ticket items like homes and cars in the coming months, overall consumer sentiment is pessimistic due to concerns over prices, inflation, and political factors [4][5] Inflation and Financial Pressure - Although price growth is slowing, consumers continue to face higher prices on essential goods, leading to a disconnect between perceived inflation and actual spending power, which affects spending decisions and brand loyalty [6] - Different age groups experience financial difficulties in varying ways, with older Americans on fixed incomes feeling the pressure from rising costs of essentials, while younger adults face challenges from unstable income and credit card debt [7]

Consumer Confidence and Spending Trends - December consumer confidence data shows the fifth consecutive month of declines, reaching the lowest level since April [1] - Despite declining confidence, overall consumer spending is reported to be 4% higher than last year, indicating resilience among consumers [1] Holiday Spending Insights - The National Retail Federation (NRF) projects holiday spending to exceed one trillion dollars for the first time, highlighting a significant milestone [3] - Retail traffic in shopping centers remains strong, with full parking lots and active customer engagement observed [3] Retailer Strategies and Consumer Behavior - Retailers are discounting products to align with consumer expectations, leading to increased shopping activity [4] - Consumers are showing a preference for aspirational brands, purchasing items that may typically be above their price point but are available at value prices [6] Brand Performance - Notable brands such as Ralph Lauren, Gap, Kate Spade, Michael Kors, Coach, and Tory Burch are performing well in the current market [6]

Consumer Confidence and Economic Outlook - Consumer confidence data for December came in at 89.1%, below the expected 91, but higher than November's reading, which was the second lowest since the pandemic [6][8] - The current conditions index has significantly declined, indicating consumers are feeling worse about their financial situation, with a notable drop into negative territory for the first time in four years [11][12] - A slowdown in economic growth is expected going into 2026, influenced by high inflation and tariffs impacting consumer prices [14][19] Restaurant Industry Trends - The restaurant industry is experiencing a shift, with a 10% move away from dining out towards grocery shopping due to high prices, particularly in the QSR burger segment, which has seen over 50% price increases since 2019 [44][45] - Domino's Pizza is identified as a top pick for 2026, having only increased prices by about 27% since 2019, making it more affordable compared to QSR burger chains [47][48] - The value meal strategy is becoming crucial as QSR chains like McDonald's aim to regain lost customers by suppressing check growth to align with grocery inflation [51] Venture Capital and AI Investment - In 2025, 40% of deals and 65% of capital invested were in AI companies, indicating a strong focus on AI across various sectors, including life sciences and fintech [79][80] - The investment environment for AI companies is expected to remain robust in 2026, with a quality gap emerging where only companies meeting high growth benchmarks will attract significant funding [82][83] - The IPO landscape is anticipated to be favorable for sectors like crypto and AI, with companies like Circle benefiting from regulatory support [84][86] Tax Implications for Consumers - The child tax credit has been increased by $200, and a new $6,000 deduction for seniors will be available, providing some tax relief for families in 2026 [21][25] - Tariffs are estimated to cost US households an average of $1,100 in 2025, expected to rise to $1,400 in 2026, impacting consumer spending and sentiment [27][29] - Despite tax cuts, the burden of tariffs may lead consumers to feel worse off, as the perception of affordability is affected by rising prices [40][42] Future of Circle and Economic Infrastructure - Circle's CEO envisions the company playing a significant role in the future economic infrastructure, focusing on AI-driven productivity gains and the frictionless exchange of value [70][72] - The company aims to be foundational to a new economic system that integrates AI and enhances global economic prosperity through innovative financial solutions [75][76]

Economic Growth - Q3 GDP growth was reported at +4.3%, significantly exceeding the +3.2% expected by analysts, marking the strongest growth in two years and an increase from Q2's +3.8% [2] - Core GDP for Q3 reached +2.9%, 30 basis points above expectations and the highest since Q1's +3.3% [3] Consumer and Business Sentiment - December Consumer Confidence is expected to improve to 91.7 from 88.7 in the previous month, indicating a positive outlook among consumers [6] Durable Goods Orders - Durable Goods Orders for October fell to -2.2%, below the consensus estimate of -1.1%, marking the fourth negative print of 2025 [4] - Excluding volatile Transportation costs, Durable Goods Orders showed a slight increase of +0.2% in October, the weakest performance since April [5] Market Implications - The strong GDP growth suggests a lower likelihood of interest rate cuts by the Federal Reserve, particularly at the upcoming January FOMC meeting, where the chance of a cut was previously at +24% [5]

Market Overview - The VIX index settled at its lowest level in 12 months, indicating low volatility in the market, while equities are near all-time highs, suggesting that option premiums for hedging are relatively cheap [2][3] - Despite low volatility, historical trends suggest that such low levels of the VIX do not last long, typically only a few sessions [5] Economic Indicators - Recent consumer confidence data showed a reading of 89.1, below the estimate of 91, but above the previous reading of 88.7, indicating mixed consumer sentiment [6] - The GDP growth for Q3 was reported at over 1% above expectations, but there are concerns about the reliability of this data due to significant month-over-month changes, particularly an 18% increase in consumer exports from August to September [10][11] Consumer Behavior - There appears to be a bifurcation in the economy where consumer confidence is low, yet spending remains robust, supporting economic activity [7] - The healthcare sector is noted as a strong area for job growth, while manufacturing shows signs of weakness [17][18] Interest Rates and Monetary Policy - Expectations for a Fed rate cut in January have decreased significantly, from above 25% to 13%, reflecting market skepticism about the need for further cuts given the current economic data [19] - The Fed's potential for rate cuts may be limited if GDP growth remains strong, with the possibility of only one cut as an insurance measure to boost employment [17][19] Commodity Market Insights - The commodity market is experiencing strength, with gold reaching an all-time high above $4500 per ounce and silver also hitting record levels, driven by inflation concerns and economic growth [20][21] - Structural supply shortages in copper are expected to support prices, and there is anticipation of significant inventory builds in the grain markets [22][23] - The physical commodities market is likely to benefit from ongoing economic expansion, with potential impacts on housing market prices due to rising input costs [24][25]

Group 1 - Consumer sentiment in the U.S. weakened for a fifth consecutive month in December [1] - Concerns over jobs and business conditions persist among consumers [1]

Busy day for data and we're getting a little bit more right now out of Conference Board. Let's get back to Rick Santelli. Hey Rick.Yes indeed, Carl. December consumer confidence from conference board expected to come in around 91 is a disappointment. Comes in at 89.1%.However, last month's 88.7% shoots all the way up to 92.9%, which makes this number at 89.1% the biggest since the revision of last month. And last month's revision at 92.9% will be the best since the month before that October when it was 95 a ...