Economic Differences - The U.S. economy is expected to benefit from fiscal and monetary stimulus in 2026, with the One Big Beautiful Bill (OBBB) projected to contribute approximately 1% to GDP this year [3] - Tax refunds are anticipated to be spent quickly, similar to COVID stimulus payments, with lower-income households spending around 80% of their refunds [4] - Wage growth has moderated, which is typically a sign of a maturing economic expansion, but this moderation is not currently leading to inflationary pressures [9] Market Differences - Current capital expenditures (capex) in the tech sector are primarily financed through corporate free cash flow (FCF), contrasting with the late 1990s when funding was largely through debt and equity issuance [27] - The equity market's rise is driven by improving earnings per share (EPS) expectations rather than price-to-earnings (P/E) expansion, indicating less speculative behavior among investors [29] - Valuations for today's market leaders, such as the Magnificent Seven, are elevated but not at bubble levels compared to historical peaks, with a significant portion of current valuations driven by Tesla [35] AI and Economic Outlook - Rapid AI adoption is expected to enhance productivity and potentially lead to disinflation, which could be bullish for financial markets [21][22] - The anticipated growth in AI capital expenditures is expected to support both the economy and markets, with current spending levels below those seen during previous tech cycles [23] - The labor market may experience weaker job gains due to AI, but the overall economic impact is expected to resemble a jobless recovery rather than a recession [42]