January 1, 2026
By Peter Bower
Our economy is not bad, but it’s also not good. Too much growth has come from the buildout of data centers for artificial intelligence. Consumption is being driven by the top 10% of earners. These are both narrow slices of our economy. Narrow economies and stock markets are vulnerable to rapid changes and shifts. Unfortunately, these are not predictable, only the vulnerabilities are.
However, the Bull and his partners do think there is a good case for the economy and stock market to both broaden out. Tax cuts have been made, bigger-than-usual refunds will soon be in the mail, and government largess continues. Afterall, our federal government is spending far more than it takes in, and programs such as the Chip Act, Inflation Reduction, and Infrastructure Bills continue in some form. Perhaps, in time, the benefits from AI will kick in, too.
Our best assessment is that our economy will muddle through and begin to accelerate in this new year. Our stock market may make more shifts, back and forth, from growth to value, but both should do well over time. However, keep a little cash on the sideline. If you need it soon, then keep a lot! The key in this coming year will be to be disciplined and stay steady my friends.
-The Lonely Bull
