Merry Christmas and happy holidays everyone.

I'm Nathan Hager, welcoming you to a special edition of Bloomberg Daybreak.

Markets are closed for the Christmas Day holiday, but we've got a lot coming up for you this hour, including holiday cheer at a premium.

Don't you know if you noticed, but this year the twelve Days of Christmas got just a bit more expensive.

We're going to break it down with Amanda Agatti, chief investment officer at PNC.

But first we want to take a look at the stock market because by some estimations, that got a little bit expensive as well, with twenty twenty five certainly turning profits for the bulls, but not without a little bit of pain along the way.

So for more on what to expect in twenty twenty six, we're very pleased to bring you a special holiday roundtable on equities.

Cameron Dawson is with us on this holiday program, chief investment officer at New Edge Wealth.

And joining us as well is Brian Levitt, global market strategist at Investco.

Really appreciate both of you taking the time out of your holiday to join us.

But before we look at head to stocks for twenty six, let's just quickly assess the year gone by.

What did you make of the downs and ups of twenty twenty five camera, Does it feel like that April low if the back of the tariff announcement is way back in the rearview mirror now?

Well, Mary Christmas Nathan, certainly it does seem that way.

And I think one of the most important things about that April low is just how bearish most investors got during that Liberation Day period.

We saw impositioning indicators that we got all the way down to the first percentile, meaning only one percent percent of the time in the last fifteen years have investors been more underweight the market than they were in early April.

So that created an incredible wall of money that could be pulled into this market over the course of the last eight months.

That just meant that all dips got bought rather quickly.

We saw very little volatility, and that allowed us to levitate, as as you mentioned, at these very high valuations.

But it's important to note we started the year at high valuations, we're ending the year at high valuations.

But the real source of returns all came from earnings growth.

You had a really solid ten eleven percent earning growth for twenty twenty five, and it's also important to note that consensus expects that to continue with thirteen percent earnings growth for twenty twenty six.

So it certainly seems that investors are expecting the good times to keep on rolling.

Let's turn to you now, Brian, what did you make of the market moves this year and where do you see things going into twenty six?

The markets were volatile around periods of policy uncertainty, and that's almost always the case, So I often get asked, you know, when it's too good to be true, or people think it's too good to be true, When does volatility come?

When do market drawdowns come?

Well, they almost always come during periods of policy uncertainty.

And as we got towards that peak policy uncertainty, historically in this time as well, you tend to do, markets tend to perform well in the aftermath of that.

Again, this time was no different.

So as we came through that, it was important that the administration start to provide greater clarity on where the tariffrights were going, and as inflation expectations stay contained, we started to get better clarity on where the Federal Reserve might be going and so that created the recipe for a bottom and an improving advance.

Now, the reality is this was the year where the markets did broaden out, not to the extent that we may have hoped for at the beginning of the year, and I think tariffs and policy uncertainty had something to do with that, but nonetheless a year in which most parts of the market did well.

Expectation as we head into twenty twenty six is lower interest rates from the FED.

An emergence out of this global mid cycle slowdown could help to continue to support other parts of the market, which may not be as disconcerting from evaluation perspective as some people fear.

And to Brian's point, Cameron, we are starting to see a little bit of that rotation happening out of big tech as we head into twenty twenty six.

But thinking about the idea of policy certainty now, is there still a risk of policy uncertainty around what the tariff regime could be after the Supreme Court rules sometime next year.

Oh, this is very important as we think about not just in the context of what it means for American businesses with certainty about how trade will be treated, but really how the bond market digests this, because what we've seen is that the collection of tariffs have eased some pressure on Treasury to issue more debt to fund these big, huge deficits that we know that we have.

And so the question would be is that if there is pushback by the Supreme Court where it looks as if those tariffs cannot be collected going forward, you start to have bigger holes in the budget that will need to be filled by more treasury issuance.

So it could be one of the reasons why we're seeing a little bit of perkiness in the long end of the yield curve.

Tenures are still very well contained, but the thirty year bond has been able to break above resistance, potentially starting to price in some of these fears about fiscal doant dominance and the need for more treasury supply.

But I would note that this is much more of a global phenomenon.

You're seeing a lot of movement hiring yields as we move, as we look at places like Japan and Germany and France, all just suggesting that even though there might be policy certainty about expectations for more FED cuts, so we look globally, it's not necessarily that certain.

What do you think, Brian, about the possibility of some policy uncertainty around tariffs in the new year.

Is that something that investors need to keep in mind?

Could there be something of a push pull between the Treasury and the equity markets?

No, I don't think investors need to be concerned about it.

Regardless of what the Supreme Court rules.

The Trump administration has steps that they can take to continue to impose tariffs, whether that's Section one twenty two of the Trade Act of nineteen seventy four, they can use Section two thirty two of the Trade Expansion Act of sixty two, section three oh one of the Trade Act of nineteen seventy four.

So they're going to figure out a way to continue to collect tariff for revenue, whether that's for better or for worse.

So I wouldn't put that as the big policy uncertainty as we head into the year.

I think that one of the risks you have is what will ultimately happen with the FED in terms of FED independence.

To me, that would be a bigger tail risk, And I want to be clear, Nathan, I categorize it as a tail risk because I continue to believe that this is a FED that is going to maintain its autonomy and independence.

I do believe it's important to this FOMC.

If you start to get whiffs of that changing, then you may have some challenges at the long end of the yeal curve, and that would be a very different environment where if the US Treasury starts US Treasury bond start to trade more like a credit, that's a very different outcome than we've dealt with for years.

Short of that, I continue to expect US Treasury bond to trade like a US Treasury bond, and what I mean by that is not based on its corporate it's credit fundamentals, but more based on the growth and inflation potential of the US and I expect it to be a pretty reasonable year from a growth and inflation perspective without substantial treasury rate volatility.

We're speaking with Brian Levity's Global market strategistic and investco along with New Edge Wealth Chief investment Officer Cameron Dawson.

Cameron, I want to take the conversation more specifically to the stock market now, because you know, looking ahead at twenty twenty six, a lot of the twelve month forward targets for the S and P five hundred are pretty bullish.

There seems like a lot of optimism baked into this market about where stocks are going to go in the new year.

What do you think, is this going to be the year we see something like an S and P eight thousand As we hover close to seven thousand right now.

Yeah, there's certainly some estimates out there that we get to S and P eight thousand.

I think what's interesting is that if you look at the collection of strategists, there's not one single strategist who is expecting a down year in twenty twenty six.

And of course that makes sense when you start thinking about some of the things that Brian mentioned earlier.

You talk about a supportive FED, you talk about supportive fiscal policy, continued earnings growth driven by things like the AI infrastructure build out.

It is hard to be bearish, and so thus there aren't any bearish estimates in those strategists forecasts.

One of the things we'd know is that because you are starting the year at twenty two and a half times forward earnings on a valuation basis for the S and P five hundred and thirteen percent earnings growth that a lot of this bullishness is already well contemplated in the price, so we wouldn't expect a lot of further multiple expansion going into twenty twenty six, and likely that the returns that we get are closer to what we get as far as earnings growth.

That would actually be very similar to what happened this year in twenty twenty five, where the majority of returns did come from earnings growth.

So a lot of bullish is out there.

Very tough to find bears simply because the narrative doesn't support it, But that doesn't mean that we won't experience volatility along the way.

Yeah.

To Cameron's point, Brian, you look at the an R function on the SMB five hundred, is really tough to find anybody who's looking very bearish on this market.

Given that with so much bollishness bake, then could that be a bearish indicator?

I don't think so.

I think in most years you tend to see most analyst expectations being positive.

You don't last in this industry very long putting out bearish outlooks on the S and P five hundred each year.

I guess there's a couple of prominent perma bears.

But for the most part, markets tend to go up far more often than they tend to go down.

And that's because in most years things get better rather than get worse.

I mean, twenty twenty two, if you want to think about it, was a year in which things got worse relative to expectations.

That's a down year.

Inflation when higher, the Fed had to raise rates more.

In most years, things get better, And when you look at twenty twenty six, the setup is for things to get better.

As Cameron also mentioned, so by better a lower discount rate, there's an opportunity unity for improving global growth.

Investors shure, remember we've been in a little bit of a soft patch here.

That's what trade wars will do, or that's what you know trade conflict will do.

So what you have now European Central Bank has already lowered rates significantly, and the Europeans are committed to fiscal investment.

China needs to combat deflationary impulses.

The US is probably a little bit too restrictive on policies.

So all of that creates a backdrop of what should be an improving economic activity.

And on top of all of that, it should start to be a year where more of the gains and efficiencies of artificial intelligence start to approve to other parts of the market.

And so you know that all creates a reasonably good backdrop.

If you're expecting a bad year for markets, what you really would have to assume, Boom, is that something's going to happen to cause the US economy to roll over meaningfully, or the Chinese economy for that matter, or the FED to have to reverse course.

And it's difficult right now to see what that could be.

We're going to continue this special conversation on the stock market looking ahead to twenty twenty six, the backdrop for equities in the new year, along with the central bank policy possibilities, as we continue this special market roundtable with Invesco's Brian Levitt and Cameron Dawson of New Edge Wealth on the special edition of Bloomberg Daybreak for Christmas.

I'm Nathan Hager, and this is Bloomert.

Thanks for being here on this special festive edition of Bloomberg day Break.

Markets are closed for the Christmas holiday, Ethan Hager, and we want to continue our special holiday roundtable on the stock market with Cameron Dawson, chief investment officer at new Edge Wealth, and Brian Levitt, global market strategist at Investco.

And I want to pick up on some points you both made at the beginning of this program focused on the FED, because investors, it's safe to say, are betting on at least a couple more rate cuts in the new year after J.

Powell Company ended twenty twenty five with three in a row.

This is how Powell explained the latest cut just a couple of weeks ago at the December meeting.

Why did we move today?

You know, I would say point to a couple things.

First of all, gradual cooling in the labor market has continued.

Unemployment is now up three tenths from June through September, payroll jobs averaging forty thousand per month since April.

We think there's an overstatement in these numbers by about sixty thousand, so that would be negative twenty thousand per month.

So still clearly a lot of focus on vulnerability in the labor market.

Cameron, I'll start with you.

Does this make the case for cuts sooner maybe than the market might be expecting.

We do think it does, simply because if you look at what market expectations are baking in right now.

It's about two point four cuts through the end of the year, which would get us just to neutral based on the FED funds median doot in their dot plot for the long run neutral rate.

So that just suggests that the market isn't expecting a lot of incremental weakness within labor market data.

But as we saw in the recent payrolls print from November that we now already have an employment rate at four point six percent, so we think that there is room for unemployment to move higher that could potentially pull those FED cuts sooner.

And that raises a really important question for risk assets like credit and equity markets, which is that the last one hundred and seventy five basis points of cuts that we got for the FED came with a backdrop where forecasters were actually raising their estimates for both EPs and GDP growth, which just meant that even though we were getting FED cuts, people were becoming more optimistic about the growth backdrop.

That is a fantastic backdrop for risk assets to continue to rally.

So if we continue to see weakness within the labor market, could it potentially challenge growth forecast consensus?

Has two percent growth expected for twenty twenty six, and could that be an environment where instead of celebrating rate cuts as they have the last two years, we see markets take it as more of a negative sign that this economy needs FED support.

So it definitely will be a data dependent FED and a data dependent market.

Brian, let's turn to you.

What's your view on where the FED goes in the first half of twenty twenty six.

Could we see those cuts sooner than later and what could that mean for the equity market?

I think we could.

And the things I watch, you know, just like the fedhair is looking at payrolls and yes they've weakened substantially, unemployment rate up a bit.

The other thing that I've been so laser focused on is the inflation expectations in the bond market.

And if you look at a three year break even, it has really rolled over in the last days.

So you're looking at a bond market that's expecting about two and a quarter inflation over the next three years.

Now, a lot of people may look at that and say, what's wrong with that?

That's right in the fed's comfort zone, but it's starting to move down fairly rapidly.

So I would watch it closely.

From from my perspective, We're sitting here or have been sitting here with a relatively flat yel curve.

That feels too restrictive to me in an environment where the economy's just not going gangbusters from a job's perspective.

So if it were me, if I were running the FED, yeah, I would want to have the short rate down closer to three percent.

That all else being equal, gives you of one hundred to one hundred and twenty five basis points spread between short rates and the ten year treasury.

That's historical average.

To me, that seems far more appropriate for the environment that were in in terms of what that means.

Typically, that's a good backdrop for risk assets, particularly smaller capitalization stocks, but also as the ill curve steepens, more value oriented parts of the market, and so for investors that may have some concerns about valuations in the top heavy part of the market, FED cuts and a pick up an activity from that could give you the backdrop where more value oriented parts of the market perform well.

And quite frankly, some of the biggest value markets were outside of the United States, and you saw some of that performance already this year.

That does raise the question cam about whether the market is possibly depending on rate cuts from the Federal Reserve to keep that rotation or broadening away from big tech going into small and medium cap stocks.

Certainly it is dependent the rally in smaller meeting cap stocks on the FED remaining supportive, because smaller cap stocks need two key things.

They need a resilient economy in order to drive earnings growth, and they also need lower interest rates in order to ease some pressure on balance sheets.

Small cap stocks tend to have a lot more debt and a lot more floating rate debt, So if there's any cohort that celebrates FED rate cuts more than others, it would be those small cap stocks.

Now it should be noted, though, is that if we look at consensus for the Russell two thousand, there is a very industrious sixty percent earnings growth that is forecasted for twenty twenty six.

And that might look encouraging to investors because it's well higher than what we see in the large cap portion of the market, but it should be taken with a grain of salt.

If we look at the beginning of twenty twenty five, there was an estimated fifty percent earnings growth coming into this year, but the actual returns on earnings growth ended up being just three percent.

So those estimates, just because they are expected by consensus, does not guarantee that they will be delivered.

But certainly more rate cuts of resilient economy a cyclical uplift could help those those smaller capsized stocks.

But just note the bar is already pretty darn high.

Yeah, it seems to be the case, And I'll turn back to you, Brian, thinking about your role as a global market strategist.

With the FED considering further rate cuts into twenty twenty six, we've got a European central bank that seems to be on pause, a Bank of Japan that's starting to hike interest rates for the first time in years.

Talk to me a little bit more about the global central bank dynamics and what that could mean for equities more broadly.

Yeah, the US is expected to lower rates more than any other developed central bank, and I think that that is critical.

Typically, as the FED lowers rates and those rates converge towards the rest of the world, you tend not to see a very strong dollar environment.

Investors aren't used to that we haven't seen a gradual easing cycle in the US in decades because we ran into crises and then the US stimulated the economy better than the rest of the world did in eight and twenty twenty.

So this is the first gradual rate easing cycle that most investors in the United States have seen, at least for a very long while.

So what that usually means is you don't have a strong dollar, may even mean that the dollar goes sideways or moderates, and in that type of a backdrop, that's when capital can start to look to other parts of the world where valuations are more compelling.

You saw a lot of that this year.

If you look at the MSCI AQUIXUS total return, it significantly outperformed the S and P five hundred.

So that's something that can continue, particularly when you think to the emerging markets.

If you look at emerging economies, they tend to perform best when the dollar is either going sideways or weakening, and as the US lowers rates, that gives some more flexibility to central banks in the emerging world.

So that's a place that investors could look if they're trying to diversify out of the US.

Take advantage of better valuations and take advantage of what could be a better global macro backdrop.

We're speaking with Brian Levitt, Global Market Strategistic Investco and New Edge Wealth Chief investment Officer Cameron Dawson.

In the minutes we have left, let's talk about the US markets more specifically in twenty twenty six.

A lot of quests about whether the tech trade can continue with the valuations it's at right now.

Cameron, What sectors are you looking at that could provide a little bit more return in twenty twenty six.

Well, one of the things that we're watching really closely is that over the last couple of months you have seen a big rotation into some left behind sectors over the last few years.

If you look at places like healthcare, for example, going from being a laggard into now a leading sector in the market, which is really more of a valuation story and somewhat of an earning's recovery story because of depressed earnings over the course of the last couple of years.

The other thing that we're watching closely is you're starting to see some signs that very cyclical sectors are turning up.

In addition to industrial commodities, So look at copper soaring, and all of this suggests that maybe the market is starting to bacon expectations of that cyclical uft after we've had this mid cycle slow down.

The question, of course, is that optimism warranted.

Will we see some of that cyclicality actually deliver.

It should be noted that November through May are typically really strong times for cyclicality, and that those trades tend to fade as we get towards the middle of the year.

So for now, it seems like a good time as we start to see some of that cyclicality come back into markets.

Brian, you're looking at cyclicals, what kind of sectors are you considering into the new year.

I couldn't agree more And Cameron is spot on with this.

When we look at our leading indicators of the economy, it's giving us a three to six month view of the global economy returning more to a trend like environment.

It had been globally below trend, and so what that means is a more environment that favors more cyclical assets.

Now that's generally a three to six month view, so we'll have to see the carry through from that.

Do we come from a do we go from a recovery to more of an expansion.

I agree with Cameron's timing a lot.

We will reassess monthly, certainly six months from now see where we are with it.

But when you're thinking about cyclical sectors, yeah, financials, industrial, commodities, energy, those tend to be materials, those tend to be the our performers.

And what I also like what Cameron mentioned.

Is this idea of perhaps even rotating within growthier parts of the market, and you know, perhaps biotech is an example of that.

In our last minute, Cameron, what are some potential risks that investors should keep in mind into the new year.

The big wild card for US is oil prices.

We should not underestimate or underappreciate just how powerful falling oil prices have been for the disinflation move of lower headline inflation, as well as helping consumers effectively acting as a tax cut.

Oil prices are very low, Gasoline prices are very low, but a turn in that trend towards more of an uptrend could certainly be a shock.

It's not our base case, but something we're watching closely as it is very important.

Thanks to both of you for being with us on this Christmas holiday.

That's Brian Levitt, global market strategist at Invesco and New Edge Wealth Chief investment Officer Cameron Dawson.

And up next, the twelve Days of Christmas got a little pricier this year.

We'll break it down with Amanda Agatti of PNC.

I'm Nathan Hagar, and this is Bloombern.

On the first day of Christmas.

My true love sent to me a park hygeen, a pear tree.

Welcome back to this special edition of Bloomberg Daybreak.

The markets are closed for the Christmas holiday.

I'm Nathan Hager.

But if you're talent up the cost of Christmas, it might not be music to everybody's ears, especially if you go that full twelve days.

So how much will a partridge in a partree and all those turtle doves and gold rings set you back this Christmas season?

Joining us is someone who knows.

Every year PNC Chief Investment Officer Amanda Agatti publishes PNC's Christmas Price Index, a festive indicator that turns the twelve days of Christmas into a holly jolly reid on the US economy.

And Amanda is here with us to break it down, Amanda.

So great to have you on this Christmas holiday.

So let's get the top line number.

What's the twelve days of Christmas cost and Christmas twenty twenty five.

Well, Merry Christmas, Nathan, I'm so thrilled to be with you celebrating the holiday here.

Believe it or not, True Love's gifts wrap up at a tree topping fifty one thousand, four hundred and seventy six dollars.

It's up about four and a half percent year over year.

So the cost of Christmas continues to be on the rise.

Out pacing the FEDS two percent target more than doubles.

Should we go day by day, how do you think about the cost of a partridge in a pear tree on the first day?

Well, yeah, I mean we could spend all day talking about you know how we're trying to tie the analysis to what's happening in the real world.

I think what's notable about the partridge in a pear tree is not so much the partridge.

The cost of the partridge itself didn't move on a year over yr basis.

I can't imagine why True Love doesn't want a partridge, but the pear tree is really the driver for that combo gift, and so we always tie the pear tree to sort of a proxy for housing costs, which continue to increase year after year.

There's a lot of sort of interesting supplying dynamics as it relates to housing in this country.

But I think what's interesting this year is even though mortgage rates have sort of fallen off the rooftop, as they say, by more than one hundred bases points, as the Fed's been lowering rates, it really hasn't made much of a difference in terms of affordability.

So I don't know if the partridge needs to rent that pear tree or what, but it's going to cost true love a lot this holiday season.

Wow.

Okay, so we're not thinking about the pairs necessarily either, looping in fruit prices maybe, But we do have a lot of birds in the next few days of the twelve days, turtle doves, calling birds, French hens.

Are we thinking about chicken and eggs here?

We certainly can be.

We can think of a lot of fun bird puns and references, there's no question.

But I just I think it's I think it's notable that the two turtle doves, the three French hens, and the four calling birds are all flat year over year basis.

It's that recurring theme with that darn partridge.

I can't imagine why people don't want birds as pets this holiday season, So there hasn't been a whole lot of demand on a year over year basis for the birds.

Let's call it a silent night of okay for those birds.

Well, maybe a new year's resolution to get back to the pet store.

But in the meantime, I got to think that the most eye popping sector in this analysis has to be the five gold rings.

When we think about the record levels that gold has been hitting in just the last couple of months.

Here, yeah, single largest increase by far on a year over year basis a heartbreaker for me as it's my all time favorite gift.

My true love is going to have a tough time this holiday season shopping for me.

There's no question, but the five Golden rings are up about thirty two and a half percent year over year.

It's a little bit of a bargain.

This is small, constantly, but a little bit of a bargain compared to the move in gold commodity prices, which are up forty five plus percent over the same time period, So you know what's going on here.

I mean, it's certainly a function of concern and the macro backdrop investors have been flocking.

There's a bird pun for you two precious metals this year with some of the macro uncertainty, the geopolitical concerns, we've had some inflationary pressures that have been sort of consistent throughout the year, and even more recently fed rate cuts one would think would be helpful, but it's effectively lowering the opportunity cost of holding gold, so on a relative basis, it's a bit more attractive than yield bearing assets.

Yeah, you certainly have to wonder where those five gold rings are going to go next Christmas, given the crazy track that gold has taken in just the last few months.

Moving further along into the next couple of verses, here, six geese laying, seven swans of swimming.

I think we're back into birds that we find maybe a little bit in the grocery aisle.

Well, let's just be relieved that the six geese did not lay golden eggs this holiday season.

There increases there's a little bit of a move on a year of your basis up about three point three percent, so a little bit closer to broader inflationary trends.

So let's just say true love doesn't have to sweat it out buying the six geese a laying this year.

It's not too bad relatively teame on a year over year basis.

Those seven Swans, though, I think that one's really interesting.

It's one of the biggest dollar values in the entire index, but it didn't move on a year over year basis, And so what's great about that, I think for investors is you know, black no black swan sightings over the course of Yeah, so that's how we think about that one and sort of a key to perhaps the market rally continuing in the new year.

Okay, yeah, I'll hope springs eternal, especially this time of year.

Here we go into eight Maids of Milking?

Where do where do they fit?

In Amanda?

The Eight Maids of Milking are sort of a frustrating line item for many because the analysis is always tied to the minimum wage in this country, and so it's always flat on a year over year basis unless we see Washington take steps to adjust the minimum wage.

And it's been a very very long time since we've seen that, So I don't know whether you know Washington wants to take that up in twenty twenty six from a policy stance or not.

But it's been also a silent night on a year of your basis for those eight maids.

Okay, well maybe another new years as depending on where you stand on that going to nine Ladies Dancing, ten Lords of Leaping.

Things start to get a little bit more interesting in this part of the index.

Yeah, The performers, or let's just call it the services components of the index are always kind of an interesting driver on a year of ear basis.

There's a little bit of a distinction between the different types of performers this year, whereas in past years we've seen it running really red hot Rudolph's red nose hot on a year of your basis, And it lines up very I think nicely with how consumer behavior and consumer spending has shifted from goods and things and stuff to services and experiences.

So we're definitely seeing the services side of the index kind of transform over time to be a bigger driver in alignment with how the economy is evolving.

I think the one that's the standout for me is the ten Lords a Leaping.

It's the single biggest services or performer increase on a year over year basis.

And I have to say, though this is not part of the analysis, that it's got to be a reflection of Oasis concert tickets.

It's the hottest ticket in town all year.

Maybe you could refer to them as the ten Lords of Rock as opposed to Lord's a Leaping, but I think that's that's probably the closest comparison we could make to ten Lords a Leaping.

Concert tickets still very, very hot this holiday season.

And we certainly saw Powerhouse Lady dancing this year with the Taylor Swift effect as well.

Were talking about that pretty much throughout twenty twenty five long.

That's exactly right.

I think we're probably keeping it in the entertainment realm as well, with the eleven pipers piping and twelve drummers drumming.

All those Lords of Leaping, I guess need backup bands as well.

Huh, Yes, I think you know, there isn't something in particular that's notable relative to the ten Lords.

For eleven and twelve, they're all sort of sitting in that same category of consumers are just willing to pay up for services and experiences.

The translation is there's a lot of pricing power in the services and the experiences and the entertainment side of the equation, Whereas I would say, for sadly the five Golden Rings jewelers are losing on a relative basis.

They're feeling the margin squeeze.

There's not that much pricing power to push through higher input costs, so the services are still running red hot, There's no question about it.

So I guess if we were to put this all together with that price tag we mentioned at the beginning, north of fifty five thousand, if I'm remembering right, that tells us I think a lot about maybe how consumers might be feeling squeezed is certainly at the lower end of the income spectrum around this holiday sees.

Is that something that you're seeing reflected in this report?

Absolutely?

You know this is with this is a very whimsical fun analysis that we do every year to try and make sense of, you know, broader inflationary and economic trends.

But the reality is that this is such a specialty gift basket of goods and services that it skews higher end in terms of gauging what the higher end consumer might be facing.

In terms of trends, we know without a shadow of a doubt that the lower end consumer has been feeling the squeeze really all year and really over the last few years.

We don't see a lot of relief on that front at all.

I think the challenge in twenty twenty six will be how does the consumer on balance?

How does the US consumer hang in there on a relative basis.

We've seen retail sales trends hang in there.

I think back to school shopping season was pretty strong.

Black Friday trends looked really good.

Twenty twenty five holiday shopping season, it's again it's early, but indications are that consumers continue to spend, which is the good news.

But at what point does the consumer exhaust itself.

We've been worrying about it for the last few years.

It hasn't materialized.

So I think a key question for twenty twenty six is does the consumer start to fade a bit and what does that do to the trajectory for growth, which all for all intents and purposes, look still quite solid as we round out twenty twenty five.

And I think as we mentioned at the top here.

This index is something that P and C has been doing for quite a few years now.

In the time that you've been putting out this twelve days analysis, what do you feel like you've learned about the trajectory of the US economy.

Well, it's a great question, and believe it or not, we've been at this analysis for forty two years, so the evolution of the US economy has really seen a lot of change over the decades, for sure, and I think the big notable shift is that even though this is a specialty gift basket of goods and services, again very whimsical and lighthearted.

Thank you, Amanda, This is great.

Really appreciate you coming on with us.

Amanda Gotti with us there, chief investment officer at PNC.

Thanks as well to Investo Global market Strategist Brian Levitch and New Edgewelth Chief investment Officer Cameron Dawson for being here.

Thanks to you as well for spending a little bit of your holiday with us.

Merry Christmas.

I'm Nathan Hager.

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