We're positioned positively for 2026, says Bespoke Investment's Hickey

Mike Santoli (Senior Markets Commentator) 00:00.000

Joining us now with a look at the markets is Paul Hickey, Bespoke Investment Group co-founder. Paul, good to see

Paul Hickey (Co-Founder) 00:05.560

you. Good to be here, Mike.

Mike Santoli (Senior Markets Commentator) 00:06.640

Um, you know, point to point, 2025 doesn't look so unusual, right? It's a bull market year, we're up almost 20%. That's kind of more common than being down or being even up less than 10%. The path was very unique though or somewhat unique. Uh, looking ahead to next year, I mean,

Mike Santoli (Senior Markets Commentator) 00:23.560

how do you build your expectations and tendencies uh and give us a sense of what we should expect?

Paul Hickey (Co-Founder) 00:29.040

You know, I I think, you know, kind of first the lessons you look back at the year, expect the unexpected. There was so much consensus coming at the end of last year that we were going to see, you know, great growth, the market do very well. And then suddenly we saw the tariff

Paul Hickey (Co-Founder) 00:44.000

talk uh coming on and which sort of derailed things. And then by April, we're looking at the certainty of an election of a recession was over 60% in early April through early May. And the question, you know, you would hear on the news empty store shelves in the summer and then

Paul Hickey (Co-Founder) 01:00.000

at the same time the market though was rallying a historic turnaround. So I think to expect the unexpected coming into this year we're positioned positively for the year ahead but nobody knows what's going to happen by let alone by the end of January let alone by the end of the

Paul Hickey (Co-Founder) 01:16.880

year but so on the negative side of things what you tend to look for early on in bull market stocks rally on bad news looking at stocks selling off on good news we started to see some of that in some large cap stocks this year. We saw it in Oracle in September. We saw it in

Paul Hickey (Co-Founder) 01:34.000

Nvidia in November when he sort of almost saved the market with its earnings report and then quickly sold off. And then we saw it again with Broadcom earnings. So that's something to watch for. But I think the pros outweigh the cons much more, I think. So the economy is doing

Paul Hickey (Co-Founder) 01:48.640

well. All the concerns over the economy never materialized. So we're seeing the economy do good. Inflation is above where the Fed wants it to be, but it's also declining. We saw a four-year loan inflation, uh, and, but it's still above target. If you look back historically, you

Paul Hickey (Co-Founder) 02:05.040

saw that in the 70s, but you also saw it in the 80s and throughout almost all of the 90s. And those were all, the 80s and 90s were pretty good times for to be invested in the stock market. So, as long as you have inflation, I think, under control and steady, I think the stock

Paul Hickey (Co-Founder) 02:18.960

market can do

Mike Santoli (Senior Markets Commentator) 02:19.600

very I mean, the markets really have not been on inflation alert for a year, basically, right? I mean, in terms of how they're pricing future inflation, in terms of how they're reacting

Paul Hickey (Co-Founder) 02:29.320

to Right, so you Yeah. Yeah, sure. Absolutely And you get back to the all the talk about the bubble in the market. Well, okay, is there a bubble in the NASDAQ since the bare market lows in October 2022, the NASDAQ's up 130%. Well, gold's up 170%, platinum's up 180% and and

Paul Hickey (Co-Founder) 02:55.680

platinum and silver's up 300%. So, if we if there's a bubble anywhere, I think it's in some of these these precious metals stocks uh which to vastly outperform the broader market.

Sara Eisen (Co-Anchor) 03:02.840

Um, three kind of structural forces that are also providing a nice tailwind for the equity markets or the dollar, oil, and tenure which have

Paul Hickey (Co-Founder) 03:10.640

Yes. So supportive Yes, what we call those are the three-headed monster. And when when all of those are rising in unison, it's usually a big headwind for the market and the market has trouble advancing. When they're all falling or near 52-week lows like they are now, it's like

Paul Hickey (Co-Founder) 03:26.280

they're rolling out the red carpet for equities. You look historically when you've seen periods when all three have simultaneously been at the low end of their 52-week range, the forward outlook for the market has been very strong. And so, I think in in that respect, it's a

Paul Hickey (Co-Founder) 03:40.080

positive sign to look at. And then we just going back to the comparison, we've been bringing it up for over two years now. The comparison with ChatGPT and Netscape, the launch of Netscape in the early 90s. And the Nasdaq's track has tracked it almost step for step over the last

Paul Hickey (Co-Founder) 03:57.800

three years. Uh, 700 167 trading days after the launch of Netscape. The NASDAQ was up 114%. It's up 111% over this current period. Every time we bring it up, people laugh at us and I hope they keep laughing at us because the market has continued to defy and and to defy the

Paul Hickey (Co-Founder) 04:16.920

conventional wisdom and track that performance very well.

Mike Santoli (Senior Markets Commentator) 04:21.040

You You're doing that from the launch of Netscape the product, not the IPL. Yeah,

Paul Hickey (Co-Founder) 04:25.040

the launch of Netscape the product because the launch of Netscape the product was what brought the internet to to like mainstream