U.S. economic growth surprised to the upside in Q3, with GDP expanding at a 4.3% annualized pace, supported by resilient consumer spending and trade. Beneath the headline number, underlying demand remained firm, AI-related investment stayed constructive, and forward indicators continue to point to solid—but evolving—growth as markets look ahead to 2026.

US Economy

 

Q3 GDP expanded at a robust 4.3% annualized rate, significantly above the 3.3% consensus estimate, driven by strong consumer spending and a substantial contribution from net trade.

 

 

This chart compares the contribution of each component to the trailing one-year and ten-year averages.

 

 

Stripping out net exports, inventories, and government spending, real final sales to private domestic purchasers still saw robust expansion.

 

 

AI-related contributions, proxied by information processing equipment, software, and intellectual property, moderated but remained strong.

 

 

Looking beyond Q3, the Atlanta Fed’s initial Q4 GDPNow reading is 3.0%.

Bridgewater’s leading indicator expects US growth to be solid and above FOMC forecasts for the coming year.

 

Source: Bridgewater Associates   Read full article

 

Here are America’s holiday essentials.

 

 

American homes are becoming smaller.

 

Source: Torsten Slok, Apollo

 

OECD PISA data show East Asia dominates global math performance, led by Singapore.

 

 

US Stock Market

 

Investors are most concerned about a plunge in tech valuations in 2026, according to a survey by Deutsche Bank.

 

Source: Deutsche Bank Research

 

The real estate sector has fallen to the lowest level since April, …

 

 

… and remains in a long-term downtrend relative to the S&P 500.

 

 

Investing in a 60/40 stock/bond portfolio in 2019 and leaving it would have made it an 80/20 portfolio in 2025 because of the dramatic increase in equities.

Gold and silver surged to record highs, driven by rising geopolitical tensions.

 

 

Technology represents a higher share of the US market than it does in other regions.

 

 

Historically, the S&P 500 has an average gain of 1.26% during the last five days of December and the first two days of January. Analysts expect record margins over the next year for large caps and a significant move higher for small caps. Treasury traders are placing a large bullish options bet on a near-term bond rally that would push the US 10-year yield back toward 4%.

This holiday season, is your airline getting you home on time?

 

 

US equities are on track for the worst underperformance relative to the rest of the world since 2009.

 

 

Great Quotes

 

“Success is not owned, it’s leased, and rent is due every day.” – J.J. Watt

 

Picture of the Week

 

Appenzell Innerhöden, Switzerland

 

 

 

 

All content is the opinion of Brian Decker