The Kelsey prediction markets agree by the way with Hasset now back ahead of former Fed Governor Kevin Worsh who took the lead I think just this week. Hasset leading the odds today with a 53% chance of getting the nod. Worsh down to 34.While the market debates which Kevin could win the horse race, we wanted to ask what would be the real difference between them as far as the market can discern. Let's bring in Dan Clifton. He's head of policy research at Strategus.Dan, the task goes to you. I'm sure everyone ...

Economic Outlook - U.S. Treasury Secretary Scott Bessent forecasts a "bountiful" economy in 2026, with expectations of real affordability relief for families and meaningful progress on prices, wages, and housing [1][2] - Bessent emphasizes that 2025 is a preparatory year, while 2026 is expected to yield significant economic benefits, contingent on the government remaining operational [2] Tax Refunds and Income Growth - Substantial tax refunds for working American households are anticipated in the first quarter, which will lead to increased real incomes and improved job growth [3][6] - Estimated tax refunds of $1,000 to $2,000 are expected to contribute to a productivity boom in 2026, provided political challenges do not hinder progress [6] Inflation and Affordability - Bessent predicts a significant drop in inflation within the first six months of the next year, attributing this to falling rents and lower energy prices [6] - The administration's policies, particularly regarding immigration, are argued to have previously inflated rents, but recent enforcement measures are leading to a decrease in rental costs [6] Economic Growth and Market Performance - The economy is diversifying beyond Big Tech, with positive performance observed in other sectors of the stock market [7] - Bessent asserts that growth does not inherently create inflation; rather, inflation arises from demand exceeding supply, and deregulation policies are enhancing supply across various sectors [8] Future Economic Conditions - The expectation is set for a return to a non-inflationary growth environment where both lower-income households and working Americans benefit, suggesting a favorable year ahead for both Main Street and Wall Street [9]

Group 1: Inflation and Economic Policy - U.S. inflation is currently around 3%, aligning with historical norms, despite fears stemming from President Trump's tariff policies [2][4] - The Trump Administration's tariff policies have raised concerns about potential delayed inflationary effects, although the immediate "3 wave" of inflation has not materialized [2][4] - Former U.S. Treasury Secretary Larry Summers expressed concerns that Trump's economic plans could lead to a more inflationary environment compared to the Biden administration [1] Group 2: AI and Robotics Growth - The Trump Administration is focused on driving AI-driven productivity growth to maintain competitiveness in the global AI race [6] - A significant shift in investment focus is anticipated from large language models (LLMs) to robotics, which is seen as the next wave of AI growth [7][10] - Key stocks to monitor in the robotics sector include Tesla, Honeywell International, Teradyne, UiPath, Ondas Holdings, Serve Robotics, iRobot, and the VanEck Robotics ETF [9]

You're the head of Alultim Alimter Capital. You're a big tech investment firm. You've got top holdings that include Nvidia, Amazon, Alphabet, OpenAI, Microsoft, lots of others.So, let's talk a little bit about what you're seeing in the tech economy, in the broader economy, and where things are headed because there's been a lot more volatility lately. >> Yeah, I I happen to think that volatility is good, and let me tell you why. >> We're coming up on the third anniversary of Chat GPT.We've come a long way fa ...

Economic Outlook - The Federal Reserve is facing deep divisions regarding monetary policy, influenced by differing aversions to inflation and employment issues [2][3] - There is a decoupling of GDP and employment, complicating the economic landscape [3] - The Fed lacks a strategic view on whether the economy is on the verge of a productivity boom, which affects its monetary policy decisions [3] Market Sentiment - The narrative in the marketplace has shifted from expecting rate cuts despite a solid economy to uncertainty about cuts in light of a weakening labor market [4] - Concerns are raised about the effectiveness of the wealth effect on high-end spending, suggesting it may not be as impactful as previously thought [5][6] Policy Recommendations - There is a call for the Fed to cut rates, with the belief that a major productivity boom is on the horizon, which would allow for looser monetary policy [8] - The importance of focusing on sectors that would benefit from rate cuts in the current K-shaped economy is emphasized [8] Inflation Concerns - A significant portion of the Consumer Price Index (CPI) components are above 3%, raising concerns among hawkish Fed officials [11] - Despite a target inflation rate of 2%, there is a belief that the economy is stabilizing around a 2.5% to 3% inflation rate, which could impact productivity and growth outlook [12]

Market Outlook - The current market dynamics reflect a healthy push and pull, with some pullbacks and assessments of growth trends, indicating that concerns about a significant market pullback may be overstated [2][4] - A third of the S&P 500 is down 20% from its 52-week highs, highlighting a strong bifurcation in the market [2][3] Economic Dynamics - The bifurcation in the market is driven by rapid changes and innovation, leading to some companies expanding profit margins while others face challenges [4][6] - This bifurcation is expected to persist, with winners and losers becoming more dispersed than in the past [6] Investment Strategy - Investors are advised to focus on sectors and companies that are expanding profit margins and to use market pullbacks to their advantage [7][8] - There is a concentration risk in the market, but it is seen as an unavoidable feature of the current economic landscape [9] Valuation Insights - Current valuations in the tech sector are not considered extreme compared to historical levels, particularly when considering growth prospects and potential productivity gains [10] - Concerns about valuations are more pronounced in sectors like consumer staples, which are experiencing profit margin squeezes [11][12] Federal Reserve Outlook - The Federal Reserve is expected to adopt a more dovish stance, potentially leading to rate cuts in December, which could support the markets [13][14] - Labor market softness is anticipated to influence the Fed's decisions, with some sectors facing more challenges than others [14][15] Small Cap Performance - Small caps have shown some catch-up potential but are not expected to outperform large caps significantly, especially in the context of current trends and higher debt levels [16]

Market Outlook - The market has experienced six consecutive months of gains, a rare occurrence since 1928, suggesting a strong November ahead with potential increases of 200 to 250 points on the S&P [4][5] - Despite a generally bearish sentiment, with an average sentiment of -11.5% this year, the market has risen by 17%, indicating a potential performance chase by fund managers as over 80% are underperforming their benchmarks [6][7] Inflation and Economic Indicators - Inflation is reportedly declining faster than expected, with true inflation dropping to below 2%, including housing costs, and shelter inflation at 0.16% month-over-month [8][9] - More than 54% of the CPI components are currently deflating, the highest percentage since the onset of COVID-19, suggesting a shift in inflationary pressures [9] Corporate Profitability - Companies are reportedly expanding profits and profit margins despite facing tariff impacts, indicating a potential productivity boom [11] - The market is trying to reconcile the effects of AI on job consumption with corporate profitability, suggesting a complex relationship between technology and economic growth [11][12] Federal Reserve and Market Reactions - The Federal Reserve's recent hawkish stance has caused unease in the market, particularly affecting sectors like homebuilders and regional banks [10] - There is speculation that the Fed may consider cuts if inflation stabilizes and job growth does not strengthen, which could lead to a dovish outlook [12] Private Markets and Fund Performance - Fund managers are experiencing one of their worst years in nearly 30 years, with many underperforming, which contrasts with the strong performance of public stocks [18][19] - Disappointment in private equity returns is contributing to a bearish sentiment among investors, despite the stock market's overall success [19] Cryptocurrency Insights - The cryptocurrency market is consolidating after significant liquidations, with fundamentals like Ethereum stablecoin volumes and application revenues at all-time highs [20][21] - Predictions suggest potential rallies in Bitcoin and Ethereum prices towards the end of the year, with targets of 15,200 for Bitcoin and 7,000 for Ethereum [21]

Core Insights - The Federal Reserve's stance on monetary policy is cautious, with indications that further rate cuts are not guaranteed, reflecting concerns about financial stability and inflation levels [1][2][3] - The labor market is perceived to have issues that may not be resolved through easier monetary policies, despite the Fed's optimistic view [4][10] - The current economic environment shows strong GDP growth, but there are questions about the sustainability of this growth driven by artificial intelligence rather than traditional consumption [8][9][13] Monetary Policy - Federal Reserve Chair Jay Powell has indicated that the decision on interest rates will be made on a meeting-to-meeting basis, suggesting a more cautious approach [2][3] - The Fed's current stance is that interest rates are above the neutral rate, and there is a belief that lower rates may be seen over time [12][13] Labor Market - There is a growing concern about the labor market, with indications that the supply of labor is decreasing, which could impact demand and employment levels [5][7][10] - The productivity boom is being driven by a shortage of labor, which contrasts with previous productivity growth periods [15][16] Economic Growth - Real GDP growth has been over 3.5% for two consecutive quarters, indicating strong economic performance, but there are concerns about speculative excesses in the market [8][12] - The current economic conditions are described as "nirvana," with low unemployment and inflation levels, although tariffs may be influencing inflation rates [13][14] Market Sentiment - There is a sense that market participants may not fully believe in the Fed's current stance, with expectations that the Fed will eventually adopt a more accommodative approach [12][17] - The National Association of Active Managers indicates a high level of bullish sentiment, suggesting potential for a market pullback due to over-optimism [17][18]

Economic Outlook - The Federal Reserve is expected to cut rates, but inflation remains a significant concern, with indications that the Fed will miss its mandate for seven consecutive years [1][15][16] - The current economic environment is compared to the 1990s, with a productivity boom and rising revenue per employee in the S&P 500 [2][5] Market Performance - The U.S. market is anticipated to continue performing well, with particular excitement about corporate reforms in Asia, especially in Japan and Korea [3][4] - The stock market is benefiting from a weak dollar, and there is a trend of companies going private to improve their corporate structures [4][39] Investment Trends - Capital expenditures (CapEx) and research & development (R&D) in AI are currently around 5% of GDP, indicating that the market is not yet in a bubble [6][23] - There is a high demand for skilled labor in the U.S., leading to investment themes around worker retraining and productivity enhancements [20][21] Corporate Developments - Japan is highlighted as a key market for corporate carve-outs, driven by ongoing corporate reforms and favorable financing conditions [33] - The Middle East is evolving from a fundraising region to one where investments are actively made, with partnerships between U.S. firms and Middle Eastern entities becoming more common [41][43] Global Trade Dynamics - There is optimism regarding potential trade agreements between the U.S. and China, with expectations of reduced tariffs [29][32] - China's focus on industrial automation and digitalization is expected to have a deflationary impact globally, while still fostering cooperation with the U.S. [31][32]

Core Insights - Blackstone reported strong third-quarter results, raising $54 billion, marking the fourth consecutive quarter of over $50 billion raised, with distributable earnings up 50% [3][4] - The company is optimistic about the cyclical upturn in deal markets, with significant growth in M&A and IPO activities, particularly in the US [5][6] Financial Performance - Distributable earnings increased by 50% compared to previous periods, indicating robust financial health [3] - The company executed three IPOs in the third quarter across India, Europe, and the United States, a first since 2021 [6] Market Trends - The overall M&A market in the US rose by 64% in the third quarter, while the IPO market doubled, increasing by 100% [5] - The cost of capital has decreased, influenced by the Federal Reserve's rate cuts, leading to tighter spreads [5] Investment Focus - Blackstone is heavily investing in AI and data centers, emphasizing the importance of long-term leases with major companies [7][8] - The global labor cost is $60 trillion, and a 15% efficiency gain from new technologies could yield $9 trillion in annual productivity gains, justifying significant capital investments [10][11] Private Credit Market - There is a perception that the era of high private credit returns has ended, but Blackstone argues that private credit can still yield premium returns due to its direct lending model [12][14] - Despite a normalization in returns, private credit remains attractive compared to liquid credit options [14][15]