Market Trends & Investment Themes - The market is experiencing ebbs and flows, with a resurgence in the AI sector [1] - The engagement of the US consumer and the performance of the holiday season are key factors to watch in early January [2] - AI is expected to remain a significant tailwind, contingent on capex investments from companies beyond the technology sector, including industrials and financials [4] - Healthcare sector price cuts may provide a tailwind [4] Small Cap vs Large Cap - Small caps are favored entering the year, particularly if economic growth strengthens, rates decrease, and liquidity is infused around tax time in April and May, potentially leading to strong performance in the first half of 2026 [5] - The recent rally in small caps has been primarily in lower-quality companies with low or no earnings [5] Interest Rates & Monetary Policy - At least one more interest rate cut is anticipated in the first quarter [6] - The Fed's actions in the second half of the year remain uncertain [6] - The potential for inflation to decrease may lead the Fed to adopt an easier monetary policy in the second half of the year [7] Global Markets - The US market continues to show significant strength [8] - Optimism surrounds the Japanese market, making developed markets excluding the US (Developed XUS) attractive [8] - Emerging markets (EM) are becoming more appealing, despite concerns about the Chinese consumer and real estate [8][9] - Korea is seen as offering opportunities in the next phase of the AI trade [9] - When considering EM exposure, diversification beyond China is recommended [10]

Group 1 - Fresh US economic data indicates easing inflation pressures, but consumers are still under strain, suggesting improving macro conditions with potential near-term volatility for Bitcoin and the broader crypto market [1] - US consumer sentiment increased to 52.9 in December, which is nearly 30% lower than a year ago, while short-term inflation expectations dropped to 4.2% and long-term expectations eased to 3.2% [2][3] - Falling inflation expectations suggest households believe price pressures are easing, supporting the Federal Reserve's goal of cooling inflation without maintaining restrictive policies for too long [3][4] Group 2 - Lower inflation expectations reduce the necessity for high interest rates, leading markets to price in earlier or deeper rate cuts, which is significant for risk assets like crypto [5] - Historically, Bitcoin has responded more to liquidity conditions than to consumer confidence or economic growth, indicating a potential positive outlook for the crypto market as financial conditions loosen [5][6] - Lower interest rates typically reduce returns on cash and bonds, leading to a gradual loosening of financial conditions [6]

Who's going to be the next Fed chair. No pressure, Mike. Kevin Hassett, still the favorite on this was Polly Marcus.Well, it's funny because he's gone up and down. Yeah, he was up, then he was down and Kevin Warsh was up and now he's down. And Chris Waller making a late bid on the outside.It's like a horse race. It actually really is. And then I heard today that recruiters actually coming in my personal Mara Mar-A-Lago, to do his interview with the president.How do you make sense. Is this what normally happ ...

Let's check in on the bond markets now. While the US is cutting rates, the Bank of Japan raised interest rates to 30-year highs. And that has yields on the move globally, pushing its 10 and 30-year to multi-deade highs, as you can see there.Rick Santelli is tracking all the action in the bond report. Rick, what can you tell us. >> Absolutely.And we'll get to the foreign global interest rates in a second, but you know, this morning, University of Michigan sentiment, it was definitely weak. current uh situati ...

Monetary Policy - Colombia's central bank held interest rates steady [1] Economic Factors - The strong peso is helping to control inflationary pressure [1]

Let's continue the conversation right here with Toron Slack. He's chief economist at Apollo Global Management. Um, you have a favorite in that Fed race, by the way.Well, so I don't have a personal favorite, but I think it's clear that the market is trying to chew hard on which of these candidates will have implications for what's happening, especially of course in rates. What the conclusion of course here is that it all becomes about can the new fetcher persuade the other FOMC members about whatever his vie ...

>> WHY DON'T WE GET OVER TO STEVE LIESMAN. HE'S GOT A VERY SPECIAL GUEST THIS MORNING. A SPECIAL INTERVIEW WITH NEW YORK FED PRESIDENT JOHN WILLIAMS.STEVE. >> ANDREW. THANK YOU.YES, I AM HERE AT THE NEW YORK FED WHERE I'VE BEEN. WE DON'T KNOW HOW MANY YEARS IN A ROW NOW, BUT SEVERAL WITH PRESIDENT JOHN WILLIAMS FOR A TRADITIONAL DECEMBER HOLIDAY INTERVIEW. WELL, WELCOME BACK, STEVE.THANKS. AND JOHN, I WAS JUST REMARKING ABOUT HOW GREAT OUR TEAMS ARE WHO SCHEDULED THIS MONTHS IN ADVANCE, KNEW THERE WOULD BE ...

>> WHY DON'T WE GET OVER TO STEVE LIESMAN. HE'S GOT A VERY SPECIAL GUEST THIS MORNING. A SPECIAL INTERVIEW WITH NEW YORK FED PRESIDENT JOHN WILLIAMS.STEVE. >> ANDREW. THANK YOU.YES, I AM HERE AT THE NEW YORK FED WHERE I'VE BEEN. WE DON'T KNOW HOW MANY YEARS IN A ROW NOW, BUT SEVERAL WITH PRESIDENT JOHN WILLIAMS FOR A TRADITIONAL DECEMBER HOLIDAY INTERVIEW. WELL, WELCOME BACK, STEVE.THANKS. AND JOHN, I WAS JUST REMARKING ABOUT HOW GREAT OUR TEAMS ARE WHO SCHEDULED THIS MONTHS IN ADVANCE, KNEW THERE WOULD BE ...

Five things to know ahead of the opening bell this morning. Japan's central bank raising its short-term interest rates to a three decade high of 75% that helped lift the country's 10-year Treasury yield past 2%. And the Bank of Japan also signaling readiness to tighten further.Meanwhile, data center deals hitting a record $61 billion in 2025. That's according to the S&P Global. European Union leaders agreeing to loan Ukraine more than hundred billion dollars to help the country defend itself from Russia for ...

All right. So, give us a sense. Uh, we have the the data through Q3.What are we seeing in Q4 and what's the outlook for 2026. Are you expecting it to be another busy year for activist investors. >> Yeah, we do.Well, well, it's been it's been busy. Um, we expect there to be even busy in 2026. uh as as investors stop pouring money into Max 7 stocks like they have been which has been slowing down and they start looking for value and and frankly value stocks um we we we see activism a lot of good activist oppor ...