It's time for the big three. We've got three stocks for you and three charts. Rick Ducat of course will take us through the charts and here to take us through the picks today, Jessica Insk, director of investor research over at stockbrokers.com. Great to have you both with us as always. Now Jessica, big picture thoughts on the market action we've seen as we start the last month of the calendar year.>> Yep. Normally this is a really great month, but it's been challenging thus far, but I think that's been the ...

Welcome to Market Catalyst. I'm Julie Hyman. We're 30 minutes into the US trading day and here is what we're watching this hour. First off, stocks drop to kick off December trading. We're going to break down the market action heading into year end. Plus, we'll get the latest read on the economy with the ISM manufacturing data crossing the wire coming in and contracting once again. and we'll bring you the latest figures on holiday shopping as investors look for cues, clues, and cues on the health of the US c ...

Summary of Key Points from the Conference Call Industry Overview - The conference call discusses the global macroeconomic outlook for 2026, focusing on the impact of AI, fiscal policies, and the K-shaped recovery in various economies [1][2][16][40]. Core Themes and Arguments 1. **Global Economic Outlook**: - The global economy is expected to grow at 3.3% in 2026, with inflation stabilizing around 2.4% [39][42]. - The US and China are projected to drive strong global growth, with the US benefiting from AI-related investments and fiscal stimulus [42][43]. 2. **K-shaped Recovery**: - The recovery is characterized by uneven growth across sectors and income groups, leading to increased income inequality [16][40][41]. - The divergence in consumer sentiment and equity returns highlights the K-shaped nature of the recovery [19]. 3. **Impact of AI**: - AI is anticipated to boost productivity and influence growth and inflation dynamics, but it may also lead to income redistribution from labor to capital [17][18][40]. - Developed markets like the US, Japan, and Korea are well-positioned to benefit from AI advancements [17]. 4. **Fiscal and Monetary Policy Dynamics**: - Fiscal dominance is becoming a significant factor in market pricing, particularly in the US and Japan, raising concerns about the sustainability of public finances [22][23]. - The call suggests that central banks may face challenges in maintaining independence due to fiscal pressures [22][23]. 5. **Currency and FX Market Outlook**: - The US dollar is expected to remain dominant, but there is a gradual trend towards FX reserve diversification [24]. - The call highlights tactical bullish trades on the USD against JPY and AUD, while remaining bearish beyond Q1 2026 [10][76]. Important but Overlooked Content 1. **Volatility and Market Risks**: - Current market conditions show low volatility and high valuations, making markets vulnerable to shocks [9][12][59]. - The need for tail risk hedges is emphasized, particularly for portfolios that are long carry [9][10]. 2. **Emerging Markets (EM) Outlook**: - EM local markets are expected to deliver double-digit USD returns, particularly in currencies like BRL, COP, and ZAR [11][13]. - However, caution is advised regarding sovereign external debt, with a forecast of 4% total return and wider spreads [13]. 3. **Geopolitical Considerations**: - The US is showing renewed interest in Latin America and other emerging markets for critical inputs, influenced by national security considerations [38]. - The geopolitical landscape is expected to impact supply chains and investment strategies [38]. 4. **Inflation Dynamics**: - Service inflation is expected to remain sticky across most countries, while China is likely to continue exporting disinflation in goods [47][48]. - The call anticipates different central bank reactions to inflation, with most expected to end their easing cycles in 2026 [49][50]. 5. **Investment Strategies**: - Specific investment strategies include long positions in US rates, EM local bonds, and tactical trades in FX markets [20][21][70][75]. - The call suggests a focus on carry trades and hedging against potential market disruptions [61][63]. This summary encapsulates the key points discussed in the conference call, providing insights into the macroeconomic landscape, investment strategies, and potential risks for 2026.

Summary of US Consumer Chartbook 4Q 2025 Industry Overview - The report focuses on the US consumer sector, analyzing labor market trends, income, consumption, sentiment, and credit conditions. Key Points Economic Outlook - The US economy is expected to experience softer consumption growth in the near term due to slower job growth and elevated inflation, with a sequential improvement anticipated throughout 2026 [3][11] - A fiscal boost from higher tax refunds in 1Q 2026 is expected to support disposable income, although spending effects will be more gradual throughout the year [3][4] Consumer Spending Forecasts - Real personal consumption is projected to grow by 1.8% in 2025, 1.6% in 2026, and 1.8% in 2027 [4][8] - After a strong 2024 with a 3.1% growth, consumption growth is expected to slow to 1.8% in 2025 and 1.6% in 2026 [8] Labor Market Insights - Payroll growth has slowed, with an average of 62k jobs added monthly, and the unemployment rate is expected to rise to 4.5% by the end of 2025 [44][45] - Labor force participation is projected to decline slightly, influenced by restrictive immigration policies [52] Wealth and Income Dynamics - Household net wealth has increased by $59 trillion, or 50%, since 2019, reaching $176.3 trillion as of mid-2025 [19][92] - The top 20% of income earners hold 71% of household net wealth, indicating a K-shaped recovery where high-income consumers benefit more from wealth effects [19][20] Tax Refund Expectations - An estimated $40 billion increase in tax refunds is expected due to retroactive tax cuts, potentially rising to $60 billion if more benefits are distributed through refunds [30][31] - The average tax refund is projected to increase by approximately $450, marking the highest average in recent years [31] Consumer Sentiment and Spending Intentions - Consumer sentiment has declined, particularly among low- and middle-income households, with spending intentions softening for holiday purchases compared to the previous year [70][76] - Higher prices are cited as a significant barrier to increased holiday spending, especially in luxury and mid-luxury categories [76] Credit and Balance Sheet Conditions - Net worth remains elevated as asset growth outpaces liability growth, with household debt continuing to rise [104][113] - The personal saving rate has declined slightly, reflecting a drawdown of excess savings accumulated during the pandemic [101][96] Consumption Trends - Goods spending is expected to slow significantly in the near term due to price increases from tariffs, while services spending remains stable [85][82] - Despite a projected jump in disposable income in 1Q 2026, the spending effects of fiscal measures are expected to be more evenly distributed throughout the year [37] Additional Insights - The report highlights the potential for a K-shaped recovery, where high-income consumers are likely to benefit more from economic improvements, while low- and middle-income consumers face ongoing challenges [20][19] - The anticipated fiscal support from tax refunds and easing monetary policy may provide a more favorable backdrop for consumer spending in 2026 [3][11]

Economic Indicators - August construction spending increased by 0.2% month-over-month, contrary to street expectations of a contraction of 0.2% [2] - The previous construction spending figure was revised from -0.1% to 0.2%, indicating a positive adjustment [2][3] - The construction sector is showing resilience despite headwinds from interest rates and government shutdown uncertainties [3] Federal Reserve Insights - The Federal Reserve appears divided, with some members likely to hold rates steady, impacting market expectations for a potential December rate cut [6][9] - The upcoming labor report may be discounted by the Fed due to the government shutdown, complicating data normalization [7][8] - Market sentiment is influenced by concerns over inflation and murky labor market statistics, particularly from the ADP report [10] Retail Sector Analysis - Home Depot's sales have been stable, but large durable goods have seen a slowdown, affecting margins [13][14] - Walmart may face a downward revision in guidance due to delayed SNAP benefits from the government shutdown, potentially impacting revenue by approximately $500 million [16] - Both companies are expected to provide insights into the health of the economy, especially leading into the holiday season [17] Lithium Market Developments - Albemarle and other lithium companies are experiencing significant stock price increases, with Albemarle up 9% and other companies like Lac and Tmq seeing gains of 13% and 11% respectively [18][19] - Chile's recent presidential election may favor the mining industry, positively impacting lithium operations [20][21] - Demand for lithium is projected to increase by 30-40% by 2026, with supply not expected to meet this demand, potentially driving prices higher [22][23] Agricultural Market Dynamics - China's soybean purchasing activity is crucial for broader market dynamics, with current purchases falling behind commitments [25][27] - The USDA data indicates that China has only met 2.76% of its total soybean commitments for the year, necessitating significant weekly purchases to meet targets [27] - A failure by China to follow through on soybean purchases could negatively impact market sentiment and discussions around critical minerals [28][29]

Carol, there there's been a lot going on the past few weeks. A lot of talk of a market bubble, whether we've hit the peak in the bull market. How concerned should investors be with this latest off.Because a lot of strategists have also been telling us that a pullback was coming sooner than later, >> right. Well, a pullback would be normal, especially when you look at the energy that's been deployed coming off of those April lows. So, some sort of a pullback in here would be natural.It's important though and ...

Economic Outlook - The current economic landscape is characterized by a K-shaped recovery, where some sectors, particularly industrials, are thriving while consumers face challenges due to rising import costs from China [2][5] - The booming industrial sectors include data center buildouts, energy, infrastructure, and defense, indicating strong growth in these areas [4] Consumer Challenges - Consumers are experiencing headwinds, particularly related to affordability and the rising costs of goods, which are exacerbated by tariffs on imports from China [3][5] - There is an increasing concern regarding subprime auto loans, which may impact the retail sector and overall consumer spending [3] Labor Market Dynamics - The labor market is showing signs of weakness, with slow job growth, which raises questions about whether this is due to reduced immigration or a broader economic slowdown [7][9] - Despite the soft labor market, consumer spending and capital expenditure (capex) remain robust, suggesting that GDP growth is still on track [10][11] Inflation and Monetary Policy - There are rising inflationary pressures due to tariffs and a weaker dollar, which could complicate the Federal Reserve's decision-making regarding interest rate cuts [12][15] - The consensus anticipates inflation to be around 3% over the next 12 months, significantly above the Fed's target of 2%, indicating potential risks for monetary policy [14][15] Gold Market Insights - Gold prices are rising due to ongoing inflation risks, significant purchases by Chinese households, and central banks diversifying away from US treasuries [18][19] - The demand for gold in China is particularly strong, driven by a lack of alternative investment options, leading to a shift towards gold as a preferred asset [21][22]