I suspect the disinflationary force from weakness in real economic activities will more than offset any additional inflationary force from tariffs. The chart below shows the average growth of 7 key metrics relative to CPI inflation. See my full report @ paulsenperspectives.substack.com

US Confidence has been depressed since 2022 primarily because of chronic recession fears tied to an inverted YC. The Fed is finally easing and recession probabilities declining. Thus, confidence & stocks should rise in the coming year. See my latest report @ paulsenperspectives.substack.com

Since the Fed has finally opened the basement door, my latest piece asks, "how low can bond yields go"? The CPI inflation rate, resource unemployment, and Dr. Copper as well as several other strong historical relationships all say bond yields remain too high. paulsenperspectives.substack.com

A Fed ease will be BIG for the stock market. This is the only Bull market in post-war history which has lived its entire existence with negative excess financial liquidity growth and with an inverted yield curve. This is about to change and #stocks will love it! paulsenperspectives.substack.com

Economic Capacity is oddly expanding as the recovery matures. Labor & factory capacity are growing, policy capacity (e.g., YC is still inverted, excess money growth is still low), private balance sheet capacity & liquidity remain immense. See my latest report at: paulsenperspectives.substack.com

See my latest report "It's Time to Discard the 2% Inflation Obsession". As the charts below demonstrate, there is nothing magical about 2% inflation for real GDP, jobs, or real profits & income growth. For further insights, click the link below. paulsenperspectives.substack.com

The fearful fuel underlying the gold rally is finally starting to fade and the price of gold is increasingly at risk. See the relative price chart below. Could its relative price return to its range since 1980? Click the link for my latest report "Golden Risk" at paulsenperspectives.substack.com

Is there really any mystery why homebuyer affordability has risen and stayed so high? The chart below offers one compelling reason. Affordability may also why consumer confidence is so low. A Fed easing could improve much on both Main and Wall. See my work at PaulsenPerspectives.Substack.com

Since 1970, intl. stocks have only had 3 secular leadership cycles and each of these coincided with a secular decline in the US dollar. Has a 4th secular decline in the dollar begun making the case for a secular overweight in intl. stocks? See my latest at paulsenperspectives.substack.com

Health care stocks have been a dismal investment during this bull market. But relative to real drug prices, the S&P 500 health care sector finally trades in its cheapest quartile for the first time in 15 years. See my latest report for all the details at paulsenperspectives.substack.com

If the Fed begins easing will recession fears again rise? Perhaps the better question is 'can' the economy recess? Many characteristics are evident today which rarely are seen at the start of past recessions like the two examples below. See my latest report @ paulsenperspectives.substack.com

Excess economic liquidity divided by the cash hoarding/dumping indicator has demonstrated a close relationship with inflation and yields since 1960. If inflation risk is overblown, stocks & bonds may have another leg left. For the details, See my latest report @ paulsenperspectives.substack.com

The S&P 500 trades at a premium to its post-war trendline of 43%, higher than 93% of the time. However, much of the broader US stock market continues to sell below respective trendlines. See my latest report for the implications of the narrowest bull since WWII. paulsen.perspectives.substack.com

US economic surprise indices measure real growth & inflation momentum. As the chart below shows, today's environment looks much more like "weak growth" than it does "stagflation". See my latest report "A Pictorial Look at Inflation" at paulsenperspectives.substack.com

My latest "A Small Company Story" considers whether the Fed has been tightening during a split US economy since 2022-a recession for small companies and an ongoing recovery for large companies. Is this about to end with a Fed ease and small leadership? paulsenperspectives.substack.com

Whether the Fed cuts rates or not, monetary policy is starting to change its stripes. Excess real liquidity growth has turned positive this quarter for the first time in this bull market! As shown on the chart, this is good news for stock investors! paulsenperspectives.substack.com

The recent jobs report implies U.S. real economic growth has slowed significantly. Are inflation surprises (reflecting inflationary momentum) suggesting CPI inflation is more likely to drop than rise? Are the Fed's growth & inflation stories both falling apart? paulsenperspectives.substack.com

Bear market fears have risen since Friday's jobs report. However, at least since 1950, the US has never had a bear market when confidence has been as low as it is today. If worried about a lurking bear, pessimism may be the best kryptonite. See my latest report at paulsenperspectives.substack.com

For the first time since 1960, economic policy has remained contractionary (i.e., TPS below the 50th percentile) throughout the entire bull run. This has led to a very narrow bull which could broaden if TPS rises above 50% -- i.e., if the Fed eases. See my latest@ paulsenperspectives.substack.com

The heated Trump/Powell debate perhaps is because since 1970, fiscal & monetary policy have never been this out of sync! Fiscal force is currently stronger than 90% of the time while monetary force is more restrictive than 80% of the time? See my latest@ paulsenperspectives.substack.com

The heated Trump/Powell debate perhaps is because since 1970, fiscal & monetary policy have never been this out of sync! Fiscal force is currently stronger than 90% of the time while monetary force is more restrictive than 80% of the time? See my latest report @ paulsenperspectives.substack.com

Earlier this week, I had the great pleasure of joining @jjcarbonneeau and @practicalquant on the Excess Returns Podcast. Thanks Jack & Justin for having me! We had a lively discussion, and I hope you have a listen. paulsenperspectives.substack.com youtu.be/Vsfp9Um1l0k

Fear of Bond Vigilantes is back. However, the relationship between govt. deficits and real bond yields changed in the last 30 years. Mostly, real yields now decline when the deficit/GDP ratio rises. The Vigilante died some time ago. See my latest @ paulsenperspectives.substack.com

I had the pleasure of joining Caroline Woods at the TheStreet. We visited about stock market narrowness, an abundance of cheapness, and a potential leadership change for stocks. Please take a listen. Thanks Caroline for having me! paulsenperspectives.substack.com www.youtube.com/watch?v=duNI...

Corporate profits have remained weak causing a very narrow bull market run. However, if the Fed finally eases and broadens profits to the middle 2 quartiles, bull market leadership may shift toward value and small cap stocks. See my latest report @ paulsenperspectives.substack.com

This year, consumer sentiment among the rich has collapsed relative to sentiment among the poor. While this sounds concerning, as the chart below highlights, it's actually been a good sign for future stock market performance. Sign up for a free trial of my work @ paulsenperspectives.substack.com

I have the great privilege of joining @MorganLBrennan and @jonfortt.bsky.social today on @CNBCOvertime at approximately 4:15 pm est. Always fun to talk markets and the economy with Morgan & Jon. I hope you can tune in for the discussion. paulsenperspectives.substack.com

What are microcap investors seeing that is not yet evident to small cap investors? I don’t know. But perhaps, leadership is finally starting to shift away from large caps truly from the “bottom-up”? Hmmm. See my full report @ paulsenperspectives.substack.com

It's been a long couple decades for value investors. One factor holding back value has been unrelenting strength in the US dollar. However, recently the dollar has been easing perhaps allowing for a period of value stock leadership. See my latest at PaulsenPerspectives.Substack.com

The #FederalReserve has been saying its only "soft data" reports which are weak. Hard data reports remain healthy. However, in the last month, Hard data economic reports have collapsed! The Fed needs to ease. See my latest report "A Charts Consult" at paulsenperspectives.substack.com

The degree of relative PE cheapness among the 72 S&P industry indexes comprising the S&P 500 Index is a decent gauge of future broadening in stock market performance. Currently, this gauge is very high pointing to improved market breadth. See my full report @ paulsenperspectives.substack.com

My Monday missive discusses a few unrelated but hopefully interesting relationships. Below is a look at the ongoing narrow stock market leadership and when it may change. Please click the link below to see my entire report. paulsenperspectives.substack.com

Today, investors are scared & loaded. The Cash/Confidence ratio is currently higher than 97% of the time since 1952 allowing investors to buy stocks today with a similar character to past bear market lows. Get my free report at paulsenperspectives.substack.com

For the first time in the post-war era, since 2022, the US has enjoyed sustained real GDP growth without private sector debt usage. This is why real GDP growth is relatively slow but is also why falling into a recession is much less likely. paulsenperspectives.substack.com

Monetary policy has been contractionary in this bull market. If it is finally eased, a plethora of supports for the stock market could be unleashed - lower interest rates, bond yields, and US dollar, and quicker money growth and improved confidence. See my report paulsenperspectives.substack.com

Here are two charts showing the Fed will likely ease sooner than expected. The financial market's positive correlation between stock price and bond yield changes say they are not worried about inflation and US economic momentum has clearly slowed since year end. See latest report at t.co/Fudz1SzBoj

Most Americans believe a strong U.S. Dollar is sacrosanct. However, as the charts below demonstrate, investors interested in strong returns should cheer for a weak dollar. See my latest post "Hooray for a Weak Dollar" at paulsenperspectives.substack.com

I am looking forward to joining @jonfortt.bsky.social On @cnbcovertime today at approximately 4 pm est. Always a privilege to join Jon in the conversation. I hope you can tune in! Paulsenperspectives.Substack.com

Financial market liquidity (M2%YOY less GDP growth) is still negative. Is this why the bull market has been so narrow? If the bull is to continue for a few more years, market liquidity needs to soon turn positive. Is this likely? See my full report @ paulsenperspectives.substack.com

Is SP500 performance bifurcation justified? Unlike the .com boom, tech stocks have delivered an unprecedented rise in real profit per job (profit productivity) while SP ex-tech has not. Does this explain and justify the bifurcation. See my full report @ paulsenperspectives.substack.com

Year 3 of bull markets are typically of light return & greater volatility. But if the bull reaches its 4th birthday, it has a good shot of lasting several more years when the returns are again great! See my latest report @ paulsenperspectives.substack.com

Yesterday I had the privilege of joining @ben_levisohn at @barronsonline to visit about the economy and the markets. Ben is a great guy and wonderful to work with and I hope you enjoy listening to the conversation. Thanks Ben! bigmarker.com/barrons-even... paulsenperspectives.substack.com

#BondYields are OUT OF WHACK! Here is just one example that suggests bond yields are more likely to decline than rise this year. See my full report on bond yields just out @ paulsenperspectives.substack.com

#Technology company EPS are being pressured by a strong US #dollar. LC Tech darlings have sizable overseas markets which could weaken significantly due to dollar strength. The Dollar was last this strong in the 2022. See chart below and my latest report @ paulsenperspectives.substack.com

Will Technology stocks soar or stall in 2025? Innovation appears poised to continue amazing all of us in the New Year, but the macro-environment may become far less hospitable for tech investors. Will slower real GDP growth challenge tech? See my latest report @ PaulsenPerspectives.Substack.com

I had the great pleasure of joining the Wealth Consulting Group last week for an interview. Great Bunch to visit with. Thanks Jimmy, Jim and Talley for having me! We covered a lot of ground, and I hope you can watch the podcast. PaulsenPerspectives.Substack.com youtu.be/A5RXsYemw2Q

The economy is poised to slow as we enter 2025 as suggested by economic surprises. The question is how much will deteriorating financial conditions impact the Tech-Darlings? Should Tech correct, so will the overall stock market. See my latest report @ paulsenperspectives.substack.com

With a lag, the rise in #BondYields, sluggish monetary growth, and a strong #dollar is crushing US #economic momentum. Financial conditions are worsening so expect recession fears to again spike in the New Year. Sign up for a free trial of my work @ paulsenperspectives.substack.com

See my latest piece "Economy to Slow & Recession Fears to Return?" The Fed may be easing but there are several contractionary forces hitting the economy. See charts below and check out my full report @ paulsenperspective.substack.com

The Federal Reserve is far too TIGHT! The real Fed Funds rate is about 80% higher today than its average since 1960 and relative to annual job growth, it has seldom been higher without a recession. The Fed needs to ease. See my work @ paulsenperspectives.substack.com