Oil prices jump after Iran says critical Strait of Hormuz to remain shut
I do not like to say I told you so, but as I discussed with Maria on Fox Business, the Consumer Price Index (CPI) came in better than expected, due partially to lower shelter costs (owner’s equivalent rent) that rose only 0.2% in October and November. Specifically, the Labor Department announced that the CPI came in at 0.2% in November, which was below economists’ consensus estimate of 0.3%. In the past 12 months, the CPI rose 2.7%, below economists’ consensus estimate of 3%. The core CPI, excluding food and energy, rose 0.2%. Energy prices rose 1.1% in October and November, while food prices rose 0.1% over those two months. This CPI was a bit odd since it showed data over two months, but it clearly showed that inflation is fizzling.
I should add that the Bank of England cut its key interest rate 0.25% to 3.75% in a close 5 to 4 vote. Since Britain is in a recession, this rate cut was anticipated. Bank of England Governor Bailey said, “We still think rates are on a gradual path downward,” and added that “But with every cut we make, how much further we go becomes a closer call.” The economic woes in Britain are largely fueled by higher taxes and shrinking households. Due largely to demographic forces from shrinking households, the global collapse in interest rates persists, so expect much lower interest rates in the upcoming years.
In theory, economic growth can persist when households are shrinking if there are big productivity gains, as there has been in Japan in the past, but economic growth is still swimming upstream when a population shrinks, and households disappear. In theory, AI is going to make America and the rest of the world more productive, plus robots are expected to leave the factories and warehouses and finally arrive in our homes within the next decade. In this brave new world where AI and robotics thrive, productivity and prosperity are anticipated to soar. Much of this prosperity may not occur in my lifetime, but that is the vision of many technology leaders like Elon Musk.
I want investors to ignore naysayers and negative people. There are so many positive developments in the pipeline that I cannot envision the U.S. economy not thriving in 2026. In fact, I expect 2026 to be the most positive year since 1999, which was my best-performing year ever.
As a result, I am expecting nothing less than a strong finish to the year and a strong start to 2026, so I want you to hang on and enjoy the ride.