Winter Is Here (Ep. 161)

In the latest episode of Facts vs Feelings, Ryan Detrick, Chief Market Strategist, and Sonu Varghese, VP, Global Macro Strategist, discuss how markets are responding to the government’s impending reopening, improving earnings, and shifting political dynamics. They unpack why consumer sentiment remains low despite strong market and economic data, explore the reality behind so-called “K-shaped” growth, and explain why they still see powerful tailwinds for investors heading into 2026.

Key Takeaways

• Government Reopening & Market Optimism: Ryan and Sonu expect the government to fully reopen within a week, though they highlight that split power in Congress has often aligned with positive stock performance.
• Political Shifts & Gridlock Effect: Off-year elections showed strong results for Democrats, setting up a potential split Congress—an outcome that markets have rewarded in past cycles due to reduced legislative volatility.
• Consumer Sentiment vs. Market Reality: Confidence levels remain near historic lows even as inflation cools and the job market holds steady. The hosts argue that perception, not data, is fueling pessimism.
• Earnings Strength & Global Tailwinds: S&P 500 earnings growth surged from 7.9% to 13%, with companies generating more than half their revenue abroad leading the way—evidence that global demand continues to support U.S. markets.
• Debunking the “K-Shaped Economy” Narrative: Sonu breaks down why claims of widening inequality are overstated, emphasizing that spending patterns and income distribution remain consistent with long-term trends.
• Labor Market Stability: Despite attention-grabbing layoff headlines, jobless claims and hiring plans show a resilient labor market, reinforcing the broader theme of economic strength beneath the noise.

Connect with Ryan:

• LinkedIn: Ryan Detrick

• X: @ryandetrick

Connect with Sonu:

• LinkedIn: Sonu Varghese

• X: @sonusvarghese

 Questions about the show? We’d love to hear from you! [e-mail]

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