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For active links, see https://discussion.fool.com/t/control-panel-sticki...


The economic shock of Covid-19 can be seen in the charts. The potential for a severe recession was obvious. Quick, decisive action from the Federal Reserve and Congress stimulated the economy. They overdid it a bit, resulting in inflation, but that’s a small price to pay for the robust recovery.

Some economists predicted that the Fed’s increase in the fed funds rate to tamp down inflation would lead to recession. In fact, the Fed guided the economy into a soft landing with low unemployment and good economic growth.

https://www.wsj.com/economy/federal-reserve-soft-l...


The Economy May Have Stuck the Soft Landing. Nobody Wants to Jinx It.
Inflation is easing, jobs are holding up, and growth is solid. But declarations of victory feel premature.

By Nick Timiraos, The Wall Street Journal, Feb. 14, 2026

The vital signs of the American economy are pointing in the same, favorable direction more convincingly than at any point since before the pandemic. Inflation is falling. The labor market is holding. Growth has been solid.

It is a snapshot, not a verdict—but it is the closest the economy has come to achieving a soft landing, a moderation in inflation without recession…

Friday’s inflation report showed so-called core prices, which strip out volatile food and energy costs, rose 2.5% in January from a year earlier—the lowest since the pandemic price surge began in 2021…

Meanwhile, separate data Wednesday showed the unemployment rate ticked down to 4.3% in January, with employers adding a larger-than-anticipated 130,000 jobs…
[But not so fast…that’s not the real number since it includes “birth-death” adjustment …]

Annual revisions showed the economy added an average of 15,000 jobs a month in all of 2025, lower than in almost any year outside of recessions since World War II. Job growth has been narrowly concentrated in healthcare and education… [end quote]

The Labor Department requires several months to track down all the real numbers so this is just a snapshot subject to later revision. Because employment has large seasonal swings, the Labor Department reports both Seasonally Adjusted (SA) and non-Seasonally Adjusted (NSA = actual raw numbers). For a worker seeking a job, the NSA is the most relevant since that’s what tells us how many real people were working.


Bureau of Labor Statistics
Employment Situation Summary - 2026 M01 Results

In accordance with annual practice, the establishment survey data released today have been
benchmarked to reflect comprehensive counts of payroll jobs for March 2025. These counts are
derived principally from the Quarterly Census of Employment and Wages (QCEW), which counts
jobs covered by the Unemployment Insurance (UI) tax system. The benchmark process results in
revisions to not seasonally adjusted data from April 2024 forward. Seasonally adjusted data
from January 2021 forward are subject to revision. In addition, data for some series prior to
2021, both seasonally adjusted and unadjusted, incorporate other revisions.

The seasonally adjusted total nonfarm employment level for March 2025 was revised downward by
898,000. On a not seasonally adjusted basis, the total nonfarm employment level for March 2025
was revised downward by 862,000, or -0.5 percent. Not seasonally adjusted, the absolute
average benchmark revision over the prior 10 years is 0.2 percent.

The change in total nonfarm employment for 2025 was revised from +584,000 to +181,000
(seasonally adjusted). Table A presents revised total nonfarm employment data on a
seasonally adjusted basis from January to December 2025. [end quote]

For a job-seeking worker, the ratio of job openings to unemployed job seekers is very important. The ratio hit 2.0 in 2022 when there was a post-pandemic labor shortage and it was very easy to find a job. Now it’s less than 1.0 which means there are more unemployed job-seekers than jobs. Polls show that workers find it hard to find a job. It’s especially hard for new entrants to the job market.

fred.stlouisfed.org
Job Openings: Total Nonfarm/Unemployment Level

Job Openings: Total Nonfarm/Unemployment Level

The Atlanta Fed’s GDPNow forecasting model provides a “nowcast” of the official estimate prior to its release by estimating real GDP growth using a methodology similar to the one used by the US Bureau of Economic Analysis. The latest GDPNow Estimate for 2025:Q4 is 3.7%. This is strong but believable growth. The estimate of the Nowcast in past months has been much higher than the “Blue Chip consensus” but they are now converging.

atlantafed.org
GDPNow

GDPNow forecasting model provides a "nowcast" of the official estimate prior to its release by estimating GDP growth using a methodology similar to the one used by the US Bureau of Economic Analysis.

There was a surge in Net Exports in January 2026 that boosted the Nowcast. But that surge in exports was mostly gold sent overseas.

Exports are at a record high.
fred.stlouisfed.org
Exports of Goods and Services

Exports of Goods and Services

But imports are higher than exports leading to a severe trade deficit. The spike down in 2024 was from imports brought in to front-run the Trump tariffs.
fred.stlouisfed.org
Net Exports of Goods and Services

Net Exports of Goods and Services

It’s been almost a year since Trump’s tariffs were imposed. Many companies that didn’t raise prices on existing inventory in 2024 intend to raise prices in 2025. Combined with the extra money in consumer pockets from tax refunds that will put upward pressure on prices.

The price of a stock, like any other commodity, is driven by supply and demand. The supply of listed stocks has declined as many previously public companies were bought by private equity and de-listed. Meanwhile, demand has soared as financial conditions are very loose and a new generation, locked out of buying homes, has invested in the stock market, driving P/E ratios to bubble heights.

https://www.wsj.com/personal-finance/gen-z-investm...


Gen Z, Locked Out of Home Buying, Puts Its Money in the Market
The share of young people transferring funds to investment accounts has climbed steeply over a decade

By Rachel Wolfe, The Wall Street Journal, Updated Feb. 15, 2026

A generation of young people locked out of homeownership has found another way to build wealth: putting money into the stock market.

The share of people 25 to 39 years old making annual transfers to investment accounts more than tripled between 2013 and 2023 to 14.4 percent, outpacing increases for those 40 and over, according to data from the JPMorgan Chase Institute. The share of 26-year-olds who transferred funds to investment accounts since turning 22 shot up from 8% in 2015 to 40% as of May 2025. The numbers don’t include people investing in 401(k)s… [end quote]

The 2026 stock market resembles 1999 in many ways. Not least because of “soonicorns.”

https://www.nytimes.com/2026/02/15/business/soonic...


Will 2026 Be the Year of the ‘Soonicorn’?

As venture capital funding pours into start-ups large and small, more firms are pitching themselves as the next big thing.

By Lora Kelley, The New York Times, Feb. 15, 2026

Once upon a time, becoming a “unicorn” — a private start-up worth more than a billion dollars — was a founder’s dream. …

But today, more than a thousand of them exist, and the world of ’corns has broadened to include “decacorns,” private companies valued at $10 billion or more; and “hectocorns,” worth more than $100 billion. There’s even a word for start-ups that pitch themselves as poised to become the next crop of unicorns: “soonicorns.”

These companies, backed by venture capital and worth $500 million to $999 million at a post-money valuation, can tell us a lot about the start-up world and where it’s heading…

There are now “dramatically more soonicorns in the United States than 10 years ago,” he added, noting that, by the end of last year, more than 2,000 companies had reached the status. … the artificial intelligence craze has lowered the barriers to receiving funding at heady valuations. Investors are pouring capital into new projects, making it relatively easy to start a company (especially compared with the fallow days of the early 2020s)…

The mega start-ups Anthropic, OpenAI and SpaceX (all hectocorns) are reportedly taking steps to go public this year… [end quote]

Can you say “dot-com”?

The “soonicorns” are owned by private equity and not listed on the markets yet. But the froth and excitement are definitely there.

The stock market has become more skittish. The SPX has plateaued and NAZ has dropped recently. VIX is climbing. The Fear & Greed Index is in Fear. The trade is risk-off as both SPX and junk bonds are falling relative to Treasuries.

The Treasury yield curve has fallen along its entire duration. Gold and silver fell out of their speculative peak but gold is now climbing again. Copper is stable. Oil is climbing. Bitcoin is still crawling along the floor.

The METAR for next week is partly cloudy with some unsettled weather. Overall conditions are good but the markets are in a metastable state due to overvaluation.

Wendy


stockcharts.com
CandleGlance | Free Charts | StockCharts.com

Quickly and easily view and analyze mini-charts of up to 12 different symbols simultaneously, all displayed side-by-side on a single page
stockcharts.com
CandleGlance | Free Charts | StockCharts.com

Quickly and easily view and analyze mini-charts of up to 12 different symbols simultaneously, all displayed side-by-side on a single page
stockcharts.com
CandleGlance | Free Charts | StockCharts.com

Quickly and easily view and analyze mini-charts of up to 12 different symbols simultaneously, all displayed side-by-side on a single page
CNN
Fear and Greed Index - Investor Sentiment | CNN

CNN’s Fear & Greed Index is a way to gauge stock market movements and whether stocks are fairly priced. The index uses seven market indicators to help answer the question: What emotion is driving the market now?
stockcharts.com
Dynamic Yield Curve | Free Charts | StockCharts.com

Visualize the relationship between interest rates and stocks over time using our draggable, interactive yield curve charting tool.
chicagofed.org
National Financial Conditions Index: Current Data - Federal Reserve Bank of...
Multpl
Shiller PE Ratio - Multpl

Shiller PE Ratio chart, historic, and current data. Current Shiller PE Ratio is 39.74, a change of +0.03 from previous market close.

read

As venture capital funding pours into start-ups large and small, more firms are pitching themselves as the next big thing.

Meanwhile, wrt the last "big thing", EVs

Updated Feb. 6, 2026,

Stellantis sells stake in Windsor battery plant to Koreans for $100

Stellantis NV on Friday sold its 49% stake in a Canadian battery plant for $100 after the automaker behind brands including Jeep and Dodge announced $26.5 billion in electric vehicle-related losses amid a major pivot back to gas-powered vehicles.

South Korean battery maker LG Energy Solution now fully owns the Windsor, Ontario, battery plant built under a 2022 joint venture between the companies.

https://www.detroitnews.com/story/business/autos/c...

Strabismus reportedly put $980M into that plant, before selling it for a Benjamin.

Steve

Meanwhile, separate data Wednesday showed the unemployment rate ticked down to 4.3% in January, with employers adding a larger-than-anticipated 130,000 jobs…
[But not so fast…that’s not the real number since it includes “birth-death” adjustment …]

Annual revisions showed the economy added an average of 15,000 jobs a month in all of 2025, lower than in almost any year outside of recessions since World War II. Job growth has been narrowly concentrated in healthcare and education… [end quote]

The January numbers I have documented as false. The month of January 2026 is not part of the 2025 revisions.

This is cute. Don't tell me AI can not be micro-managed.

Yes, the January 2026 employment data was significantly influenced by changes to the Bureau of Labor Statistics (BLS) corporate birth-death model, which updated how it estimates job gains from new firms and losses from closures.
Following massive downward revisions to 2025 data—which showed 862,000 fewer jobs were created in the 12 months through March 2025 than initially reported—the January 2026 report introduced a modified model designed to be more responsive to current economic conditions.

Key Impacts of the Birth-Death Model on January 2026 Data:
Methodological Change: Effective with the January 2026 release, the BLS began incorporating current sample information into its birth-death forecasts each month, rather than relying solely on older, ARIMA-based historical trends.
Boost to Job Growth: Analysts suggested the revised model boosted the January 2026 job growth figure (130,000 nonfarm payrolls) by roughly 70,000 relative to December.
Sector-Specific Impact: A significant portion of this boost came from the health care and social assistance sectors, which continued to drive overall job growth, with 81,900 jobs added in health care and 41,600 in social assistance.
Revisions to 2025: The updated model, combined with annual benchmarking, revealed that job growth in 2025 was "exceptionally soft," with initial estimates of 584,000 jobs added last year revised down to 181,000.
Increased Volatility: While the new, more responsive model is expected to improve accuracy over time, it may also lead to higher volatility in the initial monthly estimates in the short term.
The January 2026 report (showing 130,000 jobs and a 4.3% unemployment rate) was largely viewed as a "credibility report" attempting to correct previous overstatements of employment strength, with analysts noting that without the healthcare sector, the labor market was showing signs of significant, ongoing contraction.

The price of a stock, like any other commodity, is driven by supply and demand...


A side note / talking head moment ---

I believe this to be a common, sometimes fatal, category error. It's true in the very short term, but not for long.

That's because financial assets are fundamentally unlike capital goods (and commodities).

A purely capital good like a painting or a Beanie Baby or a bitcoin has a price set entirely by supply and demand, since it doesn't and can't ever earn anything. It's worth what somebody will pay for it. More demand relative to supply will generally lead to a higher price.

Purely financial assets aren't like that. (I say "purely" financial because there's a middle ground for nominally financial assets which are purchased more as capital goods. Stocks of Tesla and Ferrari stock are often owned partly for the feeling they generate rather than the expectation of a particular return)

A purely financial asset has price elasticity around the consensus of what it ought to earn: rising demand doesn't cause rising price, rather rising price causes falling demand and (extremely weak) mean reversion. The fair value is the present value of all future possible distributions and any terminal value. The consensus of that estimate will certainly change a lot over time, changing the asset's price, but a change in demand alone generally won't (usually not much longer than the time for news to be disseminated).

Consider the example of a bag clearly containing a hundred $100 bills. That's a purely financial asset, unless you happen to like the bag. This will probably have a market price of about $10k. The important thing to note is that the going price will NOT change based on how many such bags are for sale, nor how many people are looking to buy one. Shares are the same thing. There is variation in how much the consensus value is, sometimes even wild variation, but incremental demand is rarely an issue simply because there is essentially infinite demand for free money. The few exceptions are short time periods (a "sell at market" order of a billion shares), insufficient visibility to cause sufficient liquidity (75% stock overhang on a microcap hitting the market), or an utter lack of information from which to build any kind of value estimate so the only thing left is speculation (a startup visiting a VC office with nothing but a business plan).

There is a subtle case to be made regarding price elasticity falling in recent years because such a large fraction of fund fiduciaries are now forbidden from changing their equity allocations: a price rise causes them to want to sell but they can't. So that's another possible exception. But that's a flaw in current market structure, not a case that financial securities trade purely on demand. Remember that an already-running business tends to trade for between 5 and 25 times its annual earnings, and most of the time closer to the middle of that range. The same was true 1000, 2000, or 3000 years ago. I'm pretty sure demand has changed quite a lot in that time, but the desire for income hasn't.

For the sort of securities that people pay attention to the most, large cap liquid equities with the observable factors driving their future value well known, it's generally changes to the perceived future that matters to what bid goes in, not the number of market participants pondering the issue. Generally : )

Jim

slightly OT :
"...large fraction of fund fiduciaries are now forbidden from changing their equity allocations..."

i often wondered about this. seems there are plenty of funds that set their own rails, particularly if active multi-asset.
(e.g., fund is expected to hold 30-70% in common stock equity)
of course there must be timing rules if\when changing this. but i expect a general weakening if\when mass market private asset is allowed for retail retirement.

i also find brokers seem to add\change their own rules regarding how and what can be traded, on top of strictly regulatory guidelines.

"...large fraction of fund fiduciaries are now forbidden from changing their equity allocations..."

i often wondered about this. seems there are plenty of funds that set their own rails, particularly if active multi-asset.

I took Jim to be referring to index funds.

I took Jim to be referring to index funds.

Yes, but also all fixed allocation funds.

There was a recent research paper on this, which I found very much worth pondering. I'm not sure I swallow it all without more pondering for the simple reason that their conclusions are astounding, but definitely worth looking up.

In Search Of The Origins Of Financial Fluctuations: The Inelastic Markets Hypothesis, by Gabaix and Koijen.

A poor summary of some of their thinking:
If an equity fund or a fund with a fixed equity percentage mandate gets new money in, they MUST buy more stock, and they are completely price insensitive when they do so. That much is obvious.

If this class of fund comes to dominate markets, who are the willing sellers to them who think prices have become too high? Actual humans who value and own individual stocks are vanishingly rare, so statistically they have to buy from another such fund. It can't be an equity fund, as they have to remain fully invested. (It could be a mutual fund or managed portfolio that is allowed to increase cash allocation, but even they have limits, and they are fading as a factor) So prices probably have to rise sufficiently for some other fixed allocation fund or "closet fixed allocation" portfolio to be above their target equity allocation due to price movement. So prevailing prices go up: if the bid doesn't go up, the allocation doesn't get above target, and nobody will sell. The authors estimate that in recent years each dollar of new money into equities (not from the sale of other equities, but new to the equity world) drives up aggregate global market cap by around $5 (!).

They note that this process could go into reverse. If there are net *withdrawals* from the equity world...shares being sold where the proceeds are not going into other equities...it could become a negative feedback loop. Fixed allocation funds can't be buyers until prices fall enough that their equity allocation is below target.

This is all obviously at odds with my prior post that supply and demand generally don't matter for purely financial assets : ) There is still an infinite demand for free money, perhaps setting a lower bound when prices get below consensus value, but there isn't much (enough) elasticity in the other direction lately: there seems to be a structural shortage of people who own stocks and are willing to sell them when they're plainly trading for more than they think they're worth. At least for times like this of "new" money steadily going into equities without regard to price.

Jim

The wise and highly respected mungofitch wrote, "A purely financial asset has price elasticity around the consensus of what it ought to earn: rising demand doesn't cause rising price, rather rising price causes falling demand and (extremely weak) mean reversion. The fair value is the present value of all future possible distributions and any terminal value. The consensus of that estimate will certainly change a lot over time, changing the asset's price, but a change in demand alone generally won't (usually not much longer than the time for news to be disseminated)."

In theory, that's true. But as the wise and respected Yogi Berra noted, "In theory, theory and practice are the same. In practice, they're not."

Wise and respected economist John Maynard Keynes noted, "The market can stay irrational longer than you can stay solvent."

I won't say anything, but I will post a chart.

https://www.multpl.com/shiller-pe

And I will note in passing that I have my grandfather's passport, which was issued on October 30, 1929 in preparation for a cruise my grandparents took to Europe with my infant father. Just in time to meet American expatriates in Paris who had lost everything in the stock market crash and couldn't afford a ticket back home to the U.S.

Wendy

I won't say anything, but I will post a chart....

Oh, I absolutely agree that prices can do anything, and for remarkably long times.

But I argue that this has very little to do with a conventional view of "supply and demand" as would be the main factor in the price of, say, gold. Stock prices can go up or down with a lot of people owning stocks, and can go up or down with fewer people playing the market. You can have a doubling in the number of people watching and interested in making money on a given stock, but if the median opinion among those people of what you should pay today to make a buck doesn't change, the stock price doesn't change.

Changes in price, even large ones, are primarily changes in the consensus of what price one should pay for something today in order to make a profit from it on a target time horizon, which is different. Admittedly many (probably most) of them will be ignoring any consideration of true value and just speculating on price movements, but they still have an opinion of what should and should not be paid today to make a buck.

It's a subtle distinction, but sometimes and important one.

As an example from the pure capital goods side: the price of gold or bitcoin can not, and will not, rise unless there is an increase in demand: a larger number of people who are willing to pay a bit more or a smaller number of people willing to sell at the current price range. Without a change in aggregate demand (at any give price), the price will forever be flat. This is not true of shares of stock. A company generally has actual earnings, and the true value of a share goes up over time. Most stockholders know and expect this, and it's an effect entirely separate from rising multiples or rising demand.

As another example, Berkshire's stock seems to be at a valuation level maybe 9% above its 20 year average, and very close to the 30 year average. Nothing remarkable at all. A fellow on the Berkshire board is absolutely convinced that the extra "supply" of stock coming onto the market from continuing sales of stock by foundations to which Mr Buffett has donated shares have driven the price down an unacceptable amount, and heroic efforts must be undertaken urgently to offset this problem so that the price will be much higher. By extension of his reasoning, does this mean that if the extra "supply" hadn't come to market, the price would today be 20% or 30% or 40% above its long run average valuation level? Not likely. I think the most simple explanation is that the "supply" (shares included in the free float) isn't really a factor here. People are just plain willing to pay a certain amount for the stock, so beyond the time interval that a specific sell order goes in, a fresh bit of supply doesn't make a material difference because it doesn't change the perceived consensus value of a share.*

Supply and demand certainly matters where liquidity is insufficient to allow much at all to be discerned from price movements, but for big liquid things it generally just doesn't matter that much in the strict sense. Apple and Nvidia have about 15 and 25 billion shares outstanding, but that mountainous level of "supply" doesn't seem to have crushed their share prices. Half the people paying attention to the share price and able to trade think they can make a buck by owning at these prices, so that's where it trades. More people with the same mix of opinions would not change the price.

Jim


* (issuance of new shares, especially at prices below fair value as with stock grants, of course is a different kettle of fish: that is additional supply that directly drives down the true value of already existing shares because each one owns less of the underlying business. This is true whether those shares enter into float this year or not)

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