Week Ending January 2, 2026

WEEKLY TOUCHPOINT

Big Tech Is Still Building for the Long Game

• Capital spending accelerated in 2025: Across the Magnificent 7 (excluding Tesla), capital expenditures through the first three quarters of 2025 ran ahead of 2024 levels, signaling continued confidence despite higher rates and valuation scrutiny.
• Mega-caps led the charge: The bulk of that spending came from Amazon, Google, Microsoft, and Meta, underscoring how scale, cash flow, and balance-sheet strength continue to matter in this market cycle.
• What this means for investors: Rather than retrenching, the market’s largest companies are leaning into long-term investments—from AI infrastructure to cloud capacity and data centers. That suggests leadership firms are prioritizing durability and future growth over short-term margin protection.
• Portfolio implication: This spending trend reinforces why concentration at the top of the market isn’t accidental. While volatility may persist, companies willing and able to invest through the cycle often emerge with stronger competitive moats—supporting the case for disciplined exposure rather than trying to time pullbacks.

Important Numbers

There are lots of important numbers that clients should keep in mind. In some cases, those numbers are annual limits that change each year. Other times, the figures do not often change, but are used frequently. Given the variety of sources that report relevant numbers, it can be difficult to quickly find the right reference when accurate data is needed.

In response to this challenge, we’ve created the two-page “Important Numbers” summary guide. This quick reference guide covers the most important annual limits as well as figures that are commonly referred to during the year.

Download Our Guide

SOURCE: fpPathfinder

 

Equities

• A pause to end a powerful year: U.S. equities pulled back modestly last week, but 2025 still closed with double-digit gains for the third year in a row—a reminder that short-term wiggles don’t erase long-term progress.
• Earnings remain the backbone: With Q4 earnings growth tracking near 8.3%, the market is on pace for its 10th consecutive quarter of earnings growth, reinforcing that fundamentals—not hype—are carrying the load.
• Looking ahead to 2026: Analysts expect 15% earnings growth next year, well above the historical norm. If realized, it would mark a third straight year of double-digit earnings expansion—a rare and constructive setup for long-term investors.
• Leadership stayed consistent: Large-cap stocks gained nearly 18% in 2025, outpacing small caps by about 5%, while growth continued to beat value, led by technology and communication services.
• Global markets surprised to the upside: Both developed and emerging international equities ended the year up more than 30%, reinforcing the value of diversification beyond U.S. borders.

Bonds

• Rates drifted higher at year-end: Treasury yields rose modestly last week, pressuring longer-duration bonds despite steady coupon income.
• Curve steepening continues: The 2–10 year Treasury spread widened to 0.72%, reflecting expectations that policy rates may stay higher for longer even as growth cools.
• A solid year for core bonds: The U.S. Aggregate Bond Index returned 7.3% in 2025, driven by higher coupons, improving credit spreads, and earlier declines in Treasury yields.
• Credit remains tight: Investment-grade and high-yield spreads sit near historic lows, with yields around 4.82% and 7.10%, respectively—attractive income, but with less margin for error.
• Selectivity matters: With spreads compressed, bond investors are being paid more for income than risk, elevating the importance of quality and duration management.

Macroeconomic Data

• The Fed hits “neutral”: Recent meeting minutes from the Federal Reserve revealed a divided committee signaling a likely pause in rate cuts as policy approaches neutral territory.
• A wait-and-see mindset: Policymakers are balancing sticky inflation against a gradually softening labor market, opting for patience rather than urgency.
• Labor market still resilient: Initial jobless claims fell to 199,000, below expectations, while continuing claims also declined—evidence that employment remains firm despite seasonal noise.
• Housing shows signs of life: Pending home sales jumped 3.3% in November, reaching their highest level in nearly three years, while home prices rose 0.4% month-over-month.
• Economic growth holds steady: Housing and labor data suggest the economy is cooling without cracking, a constructive backdrop for both equities and credit.

(as of Monday’s Market Opening)

	Total Return (1D)	Total Return (1W)	Total Return (MTD)	Total Return (QTD)	Total Return (YTD)
S&P 500	1.02%	0.33%	1.21%	1.21%	1.21%
Dow Jones Industrial Average	1.65%	1.48%	2.33%	2.33%	2.33%
NASDAQ	1.02%	-0.01%	0.99%	0.99%	0.99%
NASDAQ 100	1.32%	0.05%	1.14%	1.14%	1.14%
Russell 1000	0.97%	0.32%	1.21%	1.21%	1.21%
Russell 2000	1.49%	1.04%	2.57%	2.57%	2.57%
Russell 3000	1.00%	0.37%	1.27%	1.27%	1.27%
ACWI	0.99%	1.04%	1.70%	1.70%	1.70%

What Issues Should I Consider When Planning For The Sale, Disposition, Or Succession Of My Small Business?

Planning for the sale, disposition, or succession of one’s business is a challenging process. This topic is on many business owners’ minds, yet many struggle to take action and start planning.

With your guidance, clients will have a better idea of where to start and what questions to ask when addressing their exit strategy.

This checklist covers the key issues to consider when a client must make a decision regarding the sale, disposition, or succession of their business, such as:

• Identifying an optimal successor to take over the business.
• Considering ways to improve the business appraisal and valuation process.
• Developing an optimal buy-sell agreement that is fair to all parties involved.
• Understanding the impact one’s business has on their tax and estate planning goals.

Download Our Guide

SOURCE: fpPathfinder

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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.