Latest / Earn Your Leisure / Will the Bull Market Continue? Economic Outlook for 2026 with Caleb Silver

Transcript

Will the Bull Market Continue? Economic Outlook for 2026 with Caleb Silver · Earn Your Leisure

• 0:01
  Speaker 1: This episode is brought to you by P and C Bank.
• 0:03
  Speaker 1: A lot of people think podcasts about work are boring,
• 0:06
  Speaker 1: and sure they definitely can be, but understanding of professionals
• 0:10
  Speaker 1: routine shows us how they achieve their success little by little,
• 0:14
  Speaker 1: day after day. It's like banking with P and C Bank.
• 0:18
  Speaker 1: It might seem boring to save, plan and make calculated
• 0:21
  Speaker 1: decisions with your bank, but keeping your money boring is
• 0:24
  Speaker 1: what helps you live or more happily fulfilled life. P
• 0:27
  Speaker 1: and C Bank Brilliantly Boring since eighteen sixty five. Brilliantly
• 0:32
  Speaker 1: Boring since eighteen sixty five is a service mark of
• 0:35
  Speaker 1: the PNC Financial Service Group, Inc. P and C Bank
• 0:39
  Speaker 1: National Association Member FDIC.
• 0:43
  Speaker 2: So let's talk about some other economic factors. The jobs
• 0:47
  Speaker 2: report was canceled for the first time in our instruy.
• 0:51
  Speaker 2: So what does this say that amongst other things, but
• 0:55
  Speaker 2: what does it say about the state of the economy
• 0:58
  Speaker 2: and what's your thoughts on where we're headed into twenty six?
• 1:01
  Speaker 3: Yeah, the fact that we haven't gotten the government jobs data,
• 1:05
  Speaker 3: that is troubling for you know, business journalists like me
• 1:08
  Speaker 3: on the one hand, but we're getting so much data anyway.
• 1:11
  Speaker 3: We get great stuff from ADP every month on the
• 1:13
  Speaker 3: private payrolls. I think that tells you a lot more
• 1:15
  Speaker 3: than the BLS survey of households and businesses, when they
• 1:19
  Speaker 3: literally calling tens of thousands of them on the phone
• 1:21
  Speaker 3: and emailing and saying are you hiring? How many people
• 1:24
  Speaker 3: are you hiring? Are you planning to hire in the
• 1:26
  Speaker 3: next three months. They do it in the first two
• 1:27
  Speaker 3: weeks of every single month, so by the time you
• 1:29
  Speaker 3: get it anyway, it's already three weeks late, and it's
• 1:31
  Speaker 3: based on a certain extrapolation.
• 1:33
  Speaker 4: Of all those phone calls and emails.
• 1:35
  Speaker 3: So I never thought it was that exact, and it
• 1:37
  Speaker 3: was getting muddier by the second getting everything that was
• 1:39
  Speaker 3: going on in the labor.
• 1:40
  Speaker 4: Department with the Trump administration.
• 1:42
  Speaker 3: So the economy, I think, is in better shape than
• 1:45
  Speaker 3: people think, and certainly than the way people feel. People
• 1:48
  Speaker 3: feel terrible about the economy right now. Consumer confidence, guys,
• 1:52
  Speaker 3: as you know, is almost as low as it was
• 1:53
  Speaker 3: during the Great Financial Crisis, and we're in much better
• 1:56
  Speaker 3: shape than we were back then. Just people feel terrible
• 1:58
  Speaker 3: because inflation, they feel it's coming even going to come
• 2:01
  Speaker 3: even more in twenty twenty six, especially in the form
• 2:04
  Speaker 3: of higher healthcare payments and healthcare premiums. They feel like
• 2:06
  Speaker 3: prices have gotten out of control, that nobody can control it,
• 2:09
  Speaker 3: so they blame the government and they blame corporations for that.
• 2:12
  Speaker 3: But in reality, if the unemployment rate really is somewhere
• 2:15
  Speaker 3: between four point four and five percent, that's still relatively
• 2:19
  Speaker 3: low right now. Wages has been increasing like three and
• 2:22
  Speaker 3: a half to four percent, that's decent. We are hearing
• 2:26
  Speaker 3: about growing, drumming about more layoffs and you know the
• 2:28
  Speaker 3: AI fears about it taking people's jobs. Those are significant
• 2:32
  Speaker 3: and just that psychology can weigh in on people. But
• 2:34
  Speaker 3: we continue to spend because that's what we're really good at,
• 2:37
  Speaker 3: is consumers. And as long as we're doing that, and
• 2:39
  Speaker 3: you have all these you know, multi trillion dollar companies
• 2:42
  Speaker 3: pledging to spend tens hundreds of billions of dollars with
• 2:45
  Speaker 3: each other, that's driving the other part of the economy.
• 2:47
  Speaker 4: Economic growth is going to be there.
• 2:49
  Speaker 3: Economic growth is going to be there with lower interest
• 2:51
  Speaker 3: rates next year, and we're going to hear that on
• 2:53
  Speaker 3: Wednesday when the Fed comes out with its decision, which
• 2:55
  Speaker 3: will probably lower rates by a quarter point, but it'll
• 2:58
  Speaker 3: signal through the dot plot it's you know, it's sort
• 3:01
  Speaker 3: of summary of where FED governors think interest rate should
• 3:03
  Speaker 3: be a year from now, that they're going to be
• 3:05
  Speaker 3: probably a full percentage point lower one year from now.
• 3:07
  Speaker 3: So this combination of lower interest rates in the economy
• 3:10
  Speaker 3: not falling off a cliff, and tariffs being more smoke
• 3:13
  Speaker 3: than fire really at this point in time, and corporate
• 3:16
  Speaker 3: profits are growing. All these things signal the fact that
• 3:19
  Speaker 3: the economy is probably going to grow and might be
• 3:21
  Speaker 3: actually okay, although people on the low end of things
• 3:24
  Speaker 3: are not going to feel it, and they never do.
• 3:26
  Speaker 3: They're just going to feel worse as the investing class
• 3:28
  Speaker 3: does even better.
• 3:30
  Speaker 5: I saw you on your skateboard today talking about the
• 3:32
  Speaker 5: Fed dut plot. I appreciate that that content. So there
• 3:35
  Speaker 5: was a report today all over the weekend when they
• 3:38
  Speaker 5: were talking about the Max seven and how it's had
• 3:40
  Speaker 5: this amazing run and at some point the reality check
• 3:44
  Speaker 5: is going to happen, and some analysts are saying it
• 3:46
  Speaker 5: will happen in twenty twenty six. The same analyst was
• 3:48
  Speaker 5: saying that the S and P is going to have
• 3:50
  Speaker 5: a great year next year. I find it kind of
• 3:54
  Speaker 5: hard to figure out how the two things are going
• 3:55
  Speaker 5: to work, right, if the max seven you're talking about
• 3:58
  Speaker 5: some of the biggest companies, these big hyperscales the MAX
• 4:01
  Speaker 5: I think they make up thirty five to thirty six
• 4:03
  Speaker 5: percent of the SMB. So if those don't do well,
• 4:06
  Speaker 5: how do we see the rest of the S and
• 4:08
  Speaker 5: P picking up that lift and saying, all right, we'll
• 4:11
  Speaker 5: carry the market from here.
• 4:12
  Speaker 4: What are your thoughts on this? Yeah, great question, And
• 4:15
  Speaker 4: you guys know this well.
• 4:16
  Speaker 3: If you look at the S and P five hundred
• 4:18
  Speaker 3: versus the equal weight S and P five hundred, Remember
• 4:20
  Speaker 3: the S and P.
• 4:21
  Speaker 4: Five hundred is market weighted.
• 4:22
  Speaker 3: The biggest stocks weigh the most and account for the
• 4:24
  Speaker 3: biggest part of the index like in video, Microsoft, Meta, Amazon, Apple,
• 4:28
  Speaker 3: you name it. But if you just take an equal weight,
• 4:30
  Speaker 3: it is underperforming the SMP five hundred by a fair amount,
• 4:33
  Speaker 3: by about ten percent this year. But what we've seen lately, guys,
• 4:36
  Speaker 3: which is I find very interesting. After that five percent
• 4:39
  Speaker 3: pull back a few weeks ago, which seems like forever ago, now,
• 4:43
  Speaker 3: the market rebounded almost almost to where it was. We're
• 4:45
  Speaker 3: about one percent away from all time highs. And in
• 4:48
  Speaker 3: that rebound, we saw with the technical analysis like to
• 4:51
  Speaker 3: call breath thrust sounds like a fencing term, but what
• 4:55
  Speaker 3: it really is is a majority of stocks rallying at
• 4:59
  Speaker 3: the same time, right, And that's what you want to
• 5:01
  Speaker 3: see in a healthy bull market. You want to see
• 5:03
  Speaker 3: a lot of stocks rallying, not just ten stocks, twenty
• 5:06
  Speaker 3: stocks rallying into to make the market make new heis,
• 5:10
  Speaker 3: And that's really what it was with all these big
• 5:13
  Speaker 3: megacap tech socks and AI socks. Now you're seeing better breath,
• 5:16
  Speaker 3: and you're seeing better breath in sectors that actually matter.
• 5:19
  Speaker 3: You're starting to see a little bit in commodities because
• 5:22
  Speaker 3: interest rates are cooling out a little bit on the
• 5:24
  Speaker 3: short term. You're starting to see it in healthcare, which
• 5:26
  Speaker 3: we haven't seen in a long time. You're starting to
• 5:28
  Speaker 3: see it in financials because lower rates are coming. That's
• 5:31
  Speaker 3: going to be good for them in terms of their
• 5:32
  Speaker 3: net interest margins. So you're seeing broader participation in the market,
• 5:36
  Speaker 3: and that's a healthy sign of a bull market in
• 5:39
  Speaker 3: its fourth year. And this bull is getting a little
• 5:41
  Speaker 3: bit tired. That said all, we're going into a midterm
• 5:44
  Speaker 3: election year. Those are always a little volatile, but the
• 5:46
  Speaker 3: trend is up until the right, especially with lower interest
• 5:49
  Speaker 3: rates on the horizon that power small to mid cap
• 5:51
  Speaker 3: stocks and sectors outside of megacap tech. That's actually good
• 5:54
  Speaker 3: news for momentum. I'm not saying we're going to get
• 5:56
  Speaker 3: another eighteen nineteen percent year. Probably will get annoy normal
• 6:00
  Speaker 3: a year unless something terrible happens.
• 6:02
  Speaker 6: Do you to follow up in Short's question, do you
• 6:04
  Speaker 6: think we have a reformulation of the MAX seven Well,
• 6:07
  Speaker 6: do you think it'll be a consolidation into five or
• 6:10
  Speaker 6: do you think they'll keep the MAX seven and just
• 6:13
  Speaker 6: change the waiting in the structure of it.
• 6:16
  Speaker 3: I think just by the nature of investor preference, it'll change.
• 6:21
  Speaker 3: As you know, you've seen investors, especially big investors like
• 6:24
  Speaker 3: Berkshire Hathaway another stocks like Apple, But the leadership is
• 6:28
  Speaker 3: still the leadership and the biggest stocks in the index
• 6:31
  Speaker 3: right now.
• 6:32
  Speaker 4: So you know MAX seven.
• 6:33
  Speaker 3: I think that was Kramer who came up with that term,
• 6:35
  Speaker 3: along with Fang to come up with a name for that.
• 6:38
  Speaker 3: It's really ben as you guys know, more like you
• 6:40
  Speaker 3: know a dozen stocks and you named a few that
• 6:42
  Speaker 3: were a real part of the rally or the oracles
• 6:45
  Speaker 3: of the world, the sales forces of the world. They
• 6:47
  Speaker 3: were a big part of that rally as well. Anybody
• 6:48
  Speaker 3: that was tied to the AI build out and has
• 6:51
  Speaker 3: a big market cap was useful and helpful in bringing
• 6:55
  Speaker 3: the market to record highs eighteen times already so far
• 6:57
  Speaker 3: this year. But you'll get a broadening out of participation
• 7:00
  Speaker 3: and you're seeing stocks making record highs. You know, you're
• 7:03
  Speaker 3: seeing the banks start to roll back and the record highs,
• 7:05
  Speaker 3: the JP Morgans and Goldman's, those were dancing our record
• 7:08
  Speaker 3: high So when you see financials doing well and you
• 7:11
  Speaker 3: see starts to see other sectors rallying along with it
• 7:13
  Speaker 3: outside of tech, that's a good sign. So I you know,
• 7:16
  Speaker 3: you'll you'll always have leadership. But well, we'll come up
• 7:19
  Speaker 3: with a new name in the next year or two
• 7:21
  Speaker 3: whatever next group of stocks outperforms the rest of them.
• 7:24
  Speaker 5: Yeah, we got to figure out how to get broad
• 7:25
  Speaker 5: Common to your seven side there.
• 7:27
  Speaker 4: Yeah, Broadcom has been an outstanding stock. Yeah, also Walmart too.
• 7:33
  Speaker 6: Can I do a follow up? Real quicker shot? The
• 7:35
  Speaker 6: stock is valued of what forty times earnings? They think
• 7:39
  Speaker 6: the stock is up twenty five percent this year? Why
• 7:41
  Speaker 6: do you think Walmart doesn't get the same respect in
• 7:43
  Speaker 6: Amazon may receive even though if you look going back
• 7:48
  Speaker 6: to twenty eighteen, less parts at twenty cents currently a
• 7:52
  Speaker 6: one thirteen fifty six. Despite classification of where they landed,
• 7:57
  Speaker 6: why do you think that they aren't put in that
• 7:59
  Speaker 6: Mad seven or Elite eight type of range.
• 8:02
  Speaker 4: Well, did you notice what just happened in the last
• 8:04
  Speaker 4: couple of weeks? Where did that? What happened with Walmart?
• 8:06
  Speaker 4: What exchange did it move to?
• 8:09
  Speaker 3: It moved to the Nasdaq, great point, right, It's been
• 8:12
  Speaker 3: on the nearest stock exchange forever, right, and it decided
• 8:16
  Speaker 3: that it needed to be listed on a different exchange,
• 8:19
  Speaker 3: the NASDAK. Now why the Nasdaq, Right, that's where the
• 8:21
  Speaker 3: fastest growth stocks in the world live. That's where growth stocks,
• 8:24
  Speaker 3: that's it, that's where you list. And so it wanted
• 8:27
  Speaker 3: to be included in those conversations. So you're not the
• 8:29
  Speaker 3: only one that noticed it. And they noticed it themselves.
• 8:32
  Speaker 3: They are much more than the biggest retailer in the world,
• 8:34
  Speaker 3: and they are that, but they are a logistics company, right,
• 8:37
  Speaker 3: They're a data company, right, that is what they're into
• 8:40
  Speaker 3: these days. And I was just out in Bettonville for
• 8:43
  Speaker 3: the first time. If you guys haven't been out there.
• 8:44
  Speaker 3: First of all, we should go out there and do
• 8:46
  Speaker 3: a market Monday's out there. There's nothing it is outstanding
• 8:49
  Speaker 3: that it blew my mind being in that town and
• 8:52
  Speaker 3: you see the history of Walmart, which is really the
• 8:56
  Speaker 3: history of America, and just just all over the place,
• 9:00
  Speaker 3: in the infrastructure that's around the Walmart trooper centers there,
• 9:03
  Speaker 3: it's phenomenal.
• 9:04
  Speaker 4: So it wants to be a tech company.
• 9:05
  Speaker 3: It wants to be thought of as a growth company,
• 9:07
  Speaker 3: and so it changed where it was listed and maybe
• 9:09
  Speaker 3: able to get that respect because now you've got to
• 9:11
  Speaker 3: include it in the qqqs of the world, right, you
• 9:14
  Speaker 3: got to include it.
• 9:15
  Speaker 4: With growth stocks.
• 9:15
  Speaker 3: Indexes and portfolio managers that own those sectors are going
• 9:19
  Speaker 3: to have to buy it if they.
• 9:20
  Speaker 4: Don't own it already.
• 9:21
  Speaker 3: And it's actually outperformed I was checking this out. It's
• 9:25
  Speaker 3: outperformed the NASAC over the past five years. So it
• 9:28
  Speaker 3: definitely belongs in that exchange and maybe it'll get the
• 9:30
  Speaker 3: respect that it deserves.
• 9:32
  Speaker 2: What opportunities do you see in twenty twenty six.
• 9:36
  Speaker 3: Well, I think this sector rotation is helpful and good.
• 9:39
  Speaker 3: We have all been piled into the same group of
• 9:42
  Speaker 3: stocks forever and it's been great. It's been very rewarding
• 9:46
  Speaker 3: for shareholders. Right, if you picked the five to ten
• 9:49
  Speaker 3: fastest growing stocks in the market, especially in tech, especially
• 9:52
  Speaker 3: in Internet and communications and AI, you have had an
• 9:55
  Speaker 3: incredible run as a shareholder. And no surprise that we
• 9:58
  Speaker 3: have more four to one k millionaires than any time
• 10:00
  Speaker 3: in history. We've all been piled into the same socks.
• 10:02
  Speaker 3: But when everyone's piled into that side of the boat,
• 10:05
  Speaker 3: you can see what happens.
• 10:05
  Speaker 4: We saw, you know, the.
• 10:06
  Speaker 3: NVIDIAs of the world, the Oracles of the world, of Microsoft,
• 10:09
  Speaker 3: the Matters, these were down beyond correction territory. They're almost
• 10:13
  Speaker 3: down in baar market territory. So you've had a healthy
• 10:16
  Speaker 3: valuation resizing there, which is good. But in a lot
• 10:19
  Speaker 3: of ways they've become value stocks or safety stocks.
• 10:23
  Speaker 4: Right.
• 10:23
  Speaker 3: It's either gold or that, right, and it all depends
• 10:26
  Speaker 3: on the equity risk premium for investors right now. So
• 10:28
  Speaker 3: I think you're going to see a rotation into a
• 10:31
  Speaker 3: little bit more defensive, but also a little bit more
• 10:34
  Speaker 3: broadening into the healthcare sector. As I mentioned earlier, biotech
• 10:37
  Speaker 3: finally caught a bid and then smaller down the market
• 10:41
  Speaker 3: value chain as you get into the midcaps and the
• 10:44
  Speaker 3: small caps that are going to benefit from lower interest rates.
• 10:46
  Speaker 4: There's a lot of.
• 10:47
  Speaker 3: Good companies there that are doing business in a way
• 10:50
  Speaker 3: that's not necessarily tearff sensitive, that are operating great businesses.
• 10:54
  Speaker 3: So I watch midcaps. You can buy the MidCap ETFs
• 10:58
  Speaker 3: if you want, or you can buy the small caps.
• 11:00
  Speaker 3: You have to get some exposure to.
• 11:02
  Speaker 2: Explain because some people might not be familiar from your website.
• 11:05
  Speaker 2: Can you explain the difference when you say mid caps
• 11:07
  Speaker 2: small cap?
• 11:08
  Speaker 4: Oh? Sure, large cap? Yeah, small cap stocks.
• 11:11
  Speaker 3: We're talking like five billion to ten to fifteen twenty
• 11:14
  Speaker 3: billion in marketcap, right, and market cap means the stock
• 11:18
  Speaker 3: price time, the amount of shares outstanding. The more shares outstanding,
• 11:21
  Speaker 3: the bigger your stock price, the higher your market cap.
• 11:23
  Speaker 3: And videov obviously the biggest of the mar of the
• 11:26
  Speaker 3: companies in the world in terms of market caap. Mid
• 11:29
  Speaker 3: caps are more in that twenty five I would say,
• 11:32
  Speaker 3: two hundred billion dollars market cap range. And these are
• 11:35
  Speaker 3: manufacturing companies, these are financial services companies. Some of these
• 11:39
  Speaker 3: are even tech companies or working on the fringes of
• 11:41
  Speaker 3: AI or on the fringes of semiconductors, and they have
• 11:46
  Speaker 3: fabulous businesses that are super profitable, and right now, you
• 11:49
  Speaker 3: want to have very strong profit margins. If you are
• 11:53
  Speaker 3: a publicly traded company, this matters more than anything revenue
• 11:57
  Speaker 3: per employee, how much productivity are you squeezing out of
• 12:00
  Speaker 3: your labor force, how are you using a AI to
• 12:02
  Speaker 3: do that, and how is that powering your profit margins
• 12:05
  Speaker 3: and your profits Because at the end of the day,
• 12:07
  Speaker 3: as investors, that's what we're paying for. Grow your profits
• 12:10
  Speaker 3: because it's going to be reflected in your share price
• 12:12
  Speaker 3: and in the dividends you pay back to investors. So
• 12:14
  Speaker 3: in that mid cap range, they're going to benefit from
• 12:16
  Speaker 3: lower interest rates because these companies borrow a lot of
• 12:18
  Speaker 3: money and as rates go down and they refinance their debt,
• 12:21
  Speaker 3: that eases the stress on their balance sheets and they're
• 12:24
  Speaker 3: more profitable and that's usually a benefit to shareholders. So
• 12:27
  Speaker 3: I would look down down the chain a little bit
• 12:29
  Speaker 3: as well.
• 12:30
  Speaker 2: And then large cap did you talk about large gap?
• 12:32
  Speaker 3: Yeah, large cap are the biggest companies in the world.
• 12:34
  Speaker 3: The two hundred billion to now five trillion megacap, Oh mega,
• 12:38
  Speaker 3: those are megacaps. Those are the one trillion to five trillion.
• 12:41
  Speaker 3: Large cap would be the two hundred billion to one
• 12:45
  Speaker 3: trillion dollars in market CAAP now, but that you know,
• 12:47
  Speaker 3: those ranges have expanded over time because we live in
• 12:50
  Speaker 3: the land of the giants.
• 12:51
  Speaker 5: You had to update Invesclopedia because we didn't have a
• 12:54
  Speaker 5: trillion dollar company until like recently. You're right, I gotta
• 12:59
  Speaker 5: all get right now that I want it because you
• 13:02
  Speaker 5: sit in a unique seat and we're trending towards the
• 13:05
  Speaker 5: end of the year. I wonder from a retail investors side,
• 13:08
  Speaker 5: what are you seeing in people searching?
• 13:11
  Speaker 3: Like?
• 13:11
  Speaker 1: What are the things that people are looking into? I
• 13:13
  Speaker 1: know there's a lot of talk of recession and what
• 13:16
  Speaker 1: the future is going to look like? Becker, what are
• 13:17
  Speaker 1: those trends that you're seeing from the investorpedia side that
• 13:20
  Speaker 1: retail investors or any investor really is looking forward to.
• 13:24
  Speaker 1: On your site, Earners, what's up? You ever walk into
• 13:26
  Speaker 1: a small business and everything just works, like the checkout
• 13:29
  Speaker 1: is fast, or seats are digital, tipping is a breeze,
• 13:33
  Speaker 1: and you're out the door before the line even builds.
• 13:36
  Speaker 1: Odds are they're using Square? We love supporting businesses that
• 13:40
  Speaker 1: run on Square because it just feels seamless, whether it's
• 13:43
  Speaker 1: a local coffee shop, a vendor at a pop up market,
• 13:46
  Speaker 1: or even one of our merch partners. Square makes it
• 13:49
  Speaker 1: easy for them to take payments, manage inventory, and run
• 13:53
  Speaker 1: their business with confidence, all from one simple system. One
• 13:56
  Speaker 1: of the things we love most is seeing neighborhood businesses
• 13:59
  Speaker 1: level up. Dises's West Indian Spired writing our community that
• 14:03
  Speaker 1: started with a small takeout counter. Now with Square they've
• 14:06
  Speaker 1: been able to expand into a full sit down restaurant
• 14:09
  Speaker 1: and even started catering events across the city. That's the
• 14:13
  Speaker 1: kind of growth that inspires us, and it's powered by Square.
• 14:17
  Speaker 1: Square is built for all types of businesses, from the
• 14:19
  Speaker 1: corner bagel shop that turned into a local chain, to
• 14:23
  Speaker 1: the specialty market with thousands of unique items, to the
• 14:26
  Speaker 1: stylist who's been holding you down for years. If you're
• 14:29
  Speaker 1: a business owner or even just thinking about launching something soon,
• 14:33
  Speaker 1: Square is hands down one of the best tools out
• 14:35
  Speaker 1: there to help you start, run and grow. It's not
• 14:39
  Speaker 1: just about payments, it's about giving you time back so
• 14:42
  Speaker 1: you can focus on what matters most Ready to see
• 14:44
  Speaker 1: how Square can transform your business, visit Square dot com, backslash, go, backslash,
• 14:50
  Speaker 1: eyl to learn more that Square dot com backslash, Go,
• 14:55
  Speaker 1: backslash EYL, don't wait, don't hesitate. Let Square handle the
• 14:59
  Speaker 1: back end so you can keep pushing your vision forward