Week Ending December 26, 2025

WEEKLY TOUCHPOINT

Markets Trade on Expectations, Not Just Results

• Measuring Actual Real GDP Growth vs Consensus Estimates: The chart shows the quarterly spread between reported real GDP growth and the median consensus estimate, highlighting when economic growth exceeded or fell short of expectations over the past decade.
• Largest Beat Over The Past Decade In Q3: Q3 2025 recorded the largest positive gap between actual real GDP growth and the median consensus estimate during this period, marking a notable upside surprise relative to forecasts.
• Investment Implications: The Q3 2025 real GDP report indicates that economic growth was stronger than analysts had anticipated, reinforcing recent signs of economic resilience. While outcomes will continue to depend on incoming data and evolving conditions, the report underscores how economic momentum can differ meaningfully from expectations.

Why is this Important for Investors?

• Markets Trade on Expectations, Not Just Results: Asset prices are set based on what investors think will happen. When actual GDP growth meaningfully beats expectations—as it did in Q3—markets are forced to reprice risk, growth, and opportunity.
• Upside Surprises Support Risk Assets: Stronger-than-expected growth often provides a tailwind for equities, particularly cyclicals and earnings-sensitive sectors, because it signals healthier demand and revenue potential.
• Rates & Policy Signals Shift: A resilient economy can influence interest-rate expectations. Investors may recalibrate assumptions about future rate cuts, bond yields, and the path of monetary policy.
• Narrative vs. Reality Gap: Investor sentiment is frequently shaped by headlines and forecasts. GDP surprises remind us that economic momentum can diverge sharply from prevailing narratives—sometimes for extended periods.
• Portfolio Discipline Pays: For long-term investors, this reinforces a core principle: reacting to forecasts is far less reliable than maintaining a diversified strategy built to withstand both pessimism and unexpected strength.

 

Are You Ready for the New Year?

As we approach the dawn of a new year, it’s the perfect time to reflect on the achievements and lessons of the past and set our sights on the exciting possibilities that lie ahead.

Remember, the New Year is not just a change in the calendar; it’s an opportunity for a fresh start and new beginnings.

Wishing you a joyful and prosperous New Year!

 

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SOURCE: fpPathfinder

Equities

• Equities advanced last week with major indices reaching record highs during the holiday-shortened trading period.
• Strong GDP data and improving AI-related sentiment supported markets despite low trading volumes.
• Large-cap stocks extended their year-to-date outperformance versus mid and small-caps, while growth modestly outpaced value.
• Market breadth improved as all 11 S&P 500 sectors finished higher, led narrowly by cyclicals.
• Precious metals continued to rally, with gold ending the week above $4,500 per ounce.
• International equities also moved higher, with both developed and emerging markets posting gains.

Bonds

• Bonds traded higher as Treasury yields ended the week modestly lower within a range-bound environment.
• The 2-Year Treasury yield declined to 3.46% while the 10-Year fell to 4.14%, leaving the 2-10yr slope unchanged at 0.68%.
• Long-duration bonds slightly outperformed short-duration bonds, while corporate bonds outpaced both government and high-yield debt.
• Credit spreads were little changed and remain historically tight. Investment-grade and high-yield corporate yields continued to drift lower, ending the week at 4.81% and 7.10%, respectively.

Macroeconomic Data

• Economic data releases were limited during the holiday week, but investor focus centered on Q3 GDP, which expanded at its fastest pace in two years.
• The initial estimate showed 4.3% growth, well above expectations of 3.3%.
• Growth was driven by resilient consumer demand and a favorable trade balance supported by higher exports.
• Other economic indicators were mixed. Industrial production rose 0.2% in November, while capacity utilization was largely unchanged at 76%.
• Durable goods orders declined 2.2% in October but showed modest growth when excluding volatile components.
• The Conference Board reported that the Consumer Confidence Index fell 3.8 points in December to 89.1, driven by a 9.5 point decline in the Present Situation Index as consumers grew more pessimistic about current business conditions and the labor market.

(as of Monday’s Market Opening)

	Total Return (1D)	Total Return (1W)	Total Return (MTD)	Total Return (QTD)	Total Return (YTD)
S&P 500	-0.30%	0.44%	0.88%	3.30%	17.47%
Dow Jones Industrial Average	-0.35%	0.37%	1.73%	4.62%	14.10%
NASDAQ	-0.65%	0.04%	0.31%	3.44%	21.38%
NASDAQ 100	-0.50%	0.22%	0.32%	3.39%	21.44%
Russell 1000	-0.44%	0.24%	0.83%	3.30%	18.12%
Russell 2000	-0.72%	-1.57%	0.68%	3.51%	14.23%
Russell 3000	-0.45%	0.15%	0.77%	3.22%	17.93%
ACWI	-0.43%	0.38%	1.46%	3.83%	23.10%

A Quiet Lesson from the Back of the Shop

 

A business owner once told me his favorite place to think wasn’t the boardroom—it was the back of the shop. No emails. No meetings. Just the hum of equipment and a whiteboard covered in half-erased ideas.

Years earlier, when he first started the company, every decision felt urgent. Cash flow. Payroll. Sales. Survival. He measured success by how busy he was. But one afternoon, standing back there watching his team work without him stepping in, something clicked.

The business didn’t need more of his time.

It needed better structure.

So he started making small, boring changes:

1. Documenting processes instead of keeping them in his head
2. Delegating decisions instead of approving everything
3. Separating company cash from family security
4. Thinking about what happens if he’s not there tomorrow

Nothing flashy. No headlines. Just intentional design.

Fast forward a few years: revenue was up, stress was down, and the business could run—profitably—without him touching every lever.

His biggest realization? True freedom didn’t come from growth. It came from engineering the business to support his life—not consume it.

For many owners, the most valuable work isn’t chasing the next deal. It’s stepping back and asking:

• What actually depends on me?
• What happens if I step away for 30 days?
• Is my business an asset… or just a very demanding job?

 

Because the businesses that last—and the owners who thrive—aren’t built on hustle alone.

They’re built on design, discipline, and clarity.

 

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Disclosures

1. Wealth Mechanics™ is a registered trademark of Cestia Wealth Management. Unauthorized use of the trademark, including but not limited to commercial use, reproduction, or imitation without explicit written permission from Cestia Wealth Management, is strictly prohibited.
2. Market commentary provided by NewEdge Advisors
3. Charts concerning market data are provided by Exhibit A.
4. Guides and other downloadable firm material respective to financial planning processes and data are provided and powered by fpPathfinder.
5. Advisory services offered through NewEdge Advisors, LLC, a registered investment adviser. Securities offered through NewEdge Securities, LLC. Member FINRA/SIPC. NewEdge Advisors, LLC and NewEdge Securities, LLC are wholly owned subsidiaries of NewEdge Capital Group, LLC.
6. Cestia Wealth Management is not a legal tax professional. We offer tax gap analysis for clients who desire to have a comprehensive financial plan, which requires in-depth tax strategy and planning as a distinct part of the overall customized solution. Please consult your tax professional on all matters addressed in this report.
7. Information about annuities are not to be considered a recommendation. The information provided should not considered a recommendation to purchase or sell any particular security.
8. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of future results. Please note that individual situations can vary. Therefore, the information presented here should only be relied upon when coordinated with individual professional advice.