Recession risk remains low, but the torrid pace of GDP growth in recent quarters is expected to downshift in next week’s delayed fourth-quarter report from the government, based on the median for a set of nowcasts compiled by The Capital Spectator.
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New Research Highlights Value Of Forecasts From Betting Markets
Predicting is hard, especially about the future, runs an old joke. Does the “wisdom” of crowds help? There’s a long line of research suggesting it does. Combining forecasts from several models, for example, has an encouraging track record of outperforming any one model as a general rule. The latest twist on this idea arises from betting markets. As researchers study these sites and compares their forecasts with the usual suspects, the results reaffirm the value of the crowd’s view.
Energy Leads This Year as Tech and Financials Fall Behind
Energy, basic materials, and defensive consumer stocks are in. Tech and financials are out. That, at least, is Mr. Market’s view so far in 2026, based on a set of US equity sector ETFs through yesterday’s close (Feb. 10).
Mixed Economic Signals Complicate Fed Rate‑Cut Path
The economy feels like a tale told through fogged‑up glass lately. Pick the “right” indicators and you can argue almost any version of reality. Forecasts are always a little blurry, but this moment feels different — the numbers themselves seem to be hiding the plot.
A New Oil Era—or Just Noise? The Venezuela Factor Lifts Big Oil
The fortunes of companies in the alternative energy sector crushed Big Oil shares last year. The leadership shift in favor of various slices of so-called clean energy shares surprised some market observers. The Trump administration, after all, hasn’t been shy about favoring the fossil fuels industry and changing the regulatory landscape toward that end. But in recent days Big Oil has found a second wind after lagging in 2025. Investors are now wondering: Was last year’s rebound in alt energy a one-off?
Book Bits: 7 January 2026
● The Doom Loop: Why the World Economic Order Is Spiraling into Disorder
Eswar Prasad
Review via The Economist
His book contends that changes to the balance of power between countries—the rise of China and India, the waning dominance of the West—have transformed the world economy into an engine for disorder. Once, this reconfiguration might have offered “opportunities for greater stability”, with countries choosing to “deploy their power in constructive ways for fear of losing influence”. But instead “the feedback loop between economics, domestic politics and geopolitics is spiralling out of control and becoming destructive on every front.”
Is Bitcoin Digital Gold or Fool’s Gold? The Market’s Still Deciding
Bitcoin is back in the headlines after the world’s largest cryptocurrency tumbled sharply on Thursday, briefly slipping below $61,000. The drop marks a decline of more than 50% from its October peak, when it surged past $126,000 to a record high.
Moderate Growth Still Expected For Delayed US Q4 GDP Report
Barring another glitch in the federal government’s on-again-off-again operating schedule, the delayed report for the fourth-quarter GDP report is set for release in two weeks (Feb. 20). When the update arrives, it’s on track to report a softer-but-still-resilient expansion for last year’s final quarter, based on the median for a set of nowcasts compiled by The Capital Spectator.
Small Cap Stocks Continue To Roar In 2026
Three weeks ago I wondered if the leadership rotation this year toward small- and micro-cap stocks would persist. There have been multiple false dawns in recent years as large caps and growth stocks regained the performance crown after a burst of small-cap strength. The case for arguing this time is different is still shaky, but small-cap strength persists, based on a set of equity risk factor ETFs through yesterday’s close (Feb. 3).
Total Return Forecasts: Major Asset Classes | 3 February 2026
The long-term return forecast for the Global Market Index (GMI) held steady in January at 7%-plus while the benchmark’s trailing 10-year shot higher through last month, rising above 10%. The near-three-percentage-point spread between the high-flying trailing results and the relatively moderate outlook is unusually wide. The gap suggests that investors should manage expectations down for the performance outlook for globally diversified portfolios in the years ahead.