Good morning, investors. All year I’ve written to you about the K-shaped economy, and the disconnect between those who own assets and everyone else.

I expect the gap will continue to widen in the coming years.

Yet at the same time, I’m not convinced bleak headlines and flagging sentiment data paint the most accurate picture of the real economy.

The S&P 500 is breaking records to end the year but consumer sentiment remains historically bleak.

While the Santa Rally delivers for investors, the Conference Board’s consumer confidence index fell again in December to one of its lowest readings since early 2021.

It marked the fifth monthly decline in a row, with respondents growing more uneasy on jobs and wages. 

That pessimism shows up across surveys.

Both the University of Michigan and the OECD reported roughly decade-low consumer sentiment readings in November. 

To be sure, sentiment data isn’t what it used to be.

Lower response rates, gaps in sampling, and political biases have all weakened their reliability since the pandemic. 

In a vacuum, this data offers an incomplete snapshot of the economy. 

Still, the disconnect between confidence and asset prices is hard to ignore.

Historically, rising consumer confidence has coincided with strong stock market returns. But since 2020, that dynamic has fractured. 

Equity prices have compounded sharply while confidence measures have remained structurally depressed. 

On one hand that reinforces the idea of a K-shaped economy, but it also highlights the shortcomings of sentiment surveys. 

Confidence peaked during the dot-com bubble and never reclaimed those levels, even as the S&P 500 has gained more than 1,400% since then.

Meanwhile, consumer spending continues to largely beat expectations and 2025 holiday shopping has smashed records. 

In effect, rather than capture economic stress, “low” sentiment may suggest a ceiling on how optimistic consumers are willing to report feeling, regardless of how high asset prices go. 

It’s true that the economy and market have changed over the last two decades.

Stock prices — fueled by earnings and liquidity — have less and less ties to household mood. At the same time, the tools used to measure that mood have grown noisier and less reliable. 

That helps explain why Wall Street keeps notching record highs regardless of historically weak sentiment surveys. 

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📈 Silver prices are exploding. The metal has gained 21% in the last five days, putting its year-to-date returns above 165%. Debt fears and geopolitical tensions have sent other metals higher all year, too. (Fortune)

📊 Companies don’t have plans to hire in 2026. Large employers indicate that they either want to keep the same size staff or let go of workers. Forecasts by Indeed point to minimal hiring in the coming months. (WSJ)

👀 Wall Street doesn’t see an AI bubble anymore. Fears of a bubble have rolled over in the last month, and strategists are optimistic about what comes next as earnings continue to expand. (Yahoo Finance)

🗓December 29, 1916: The Federal Reserve System completed its first full year of operations, and it would go on to permanently reshape financial cycles and crisis response.

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📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

I write our flagship newsletter and host our show, Full Signal, to prepare you for each trading day — unpacking markets, economic data and Wall Street with analysis you won’t find anywhere else.

Feedback? Reply to this email, ping me on X @philrosenn, or write me directly at [email protected].