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Jim Paulsen sees a risk of a sharp stock market correction as financial conditions tighten and investors grow comfortable with tech's long run of leadership. But his warning does not require a recession or the end of the bull market. In this month's Jim Paulsen Show, Jim joins Justin Carbonneau and Jack Forehand to walk through the charts behind his cautious outlook. He explains how rising yields, oil prices, and a firmer dollar can affect the economy with a lag, why favorable seasonality may offer less support than investors expect, and how a slowdown in technology spending could challenge market leadership. We also explore the signals Jim sees in retail, housing, employment, and Walmart's relative performance. He closes with a possible path through a correction: slowing growth, lower inflation and yields, and a recovery that could give the bull market another run. His seven lagging sectors, the "Modest Seven," are central to that case. Topics covered: Why Jim Paulsen is cautious without making a recession or full bear-market callHis financial-conditions gauge and the risks of tightening into an already pressured economyHow restrictive conditions can weaken the November-to-April seasonal advantageThe delayed effects of bond yields, oil prices, and the dollar on economic surprisesTechnology spending relative to GDP and why slower growth could matter for tech stocksAI adoption, pricing, and the challenge of turning investment into profitsHow two decades of tech leadership may encourage complacency and crowded positioningThe divide between AI, inflation-assisted sectors, and the "Modest Seven"What sector performance, bond yields, and the Walmart Recession Signal suggest about growthWhy rate cuts may initially accompany falling stocks, and how a correction could set up another advanceFollow Jim Paulsen: Paulsen PerspectivesJim Paulsen on X Timestamps: 00:00 Jim Paulsen's outlook: correction risk without a bear-market call07:41 Restrictive conditions and the seasonal buying period14:12 Why the Fed and investors interpret conditions differently20:28 Oil, yields, the dollar, and their lagged effects26:00 Technology spending relative to the economy30:18 Can AI break the historical pattern?35:00 Tech's long leadership cycle and investor complacency42:00 AI, inflation-assisted sectors, and the Modest Seven47:06 Market signals ahead of economic reports and bond pressure53:00 Bond competition and the Walmart Recession Signal58:11 How a correction could lead to another bull-market run Learn more about the Excess Returns podcast network:https://excessreturns.co No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.

Jim Paulsen joins Jack Forehand and Matt Zeigler to explore why booming AI earnings may be masking a weakening U.S. economy, and what that means for stocks, bonds, and Federal Reserve policy. Using 27 charts, he examines stalled job creation, rising oil prices, growing reliance on debt to finance AI investment, and why he expects a sharper correction in technology than in the broader S&P 500. Jim Paulsen on Twitterhttps://x.com/jimwpaulsen Paulsen Perspectives: Jim's research and chartshttps://paulsenperspectives.substack.com Topics covered: Why strong S&P 500 earnings hide a widening divide between technology, energy, and the remaining seven sectors. Why low unemployment claims may offer false comfort when job creation has stalled. Jim's job market misery index and what it suggests about the case for Fed easing. How business investment and employment have broken their historical relationship. Why weak real disposable income, low savings, and higher oil prices threaten consumer spending. How fading economic momentum could push Treasury yields lower despite renewed inflation fears. Why a shrinking wall of worry could remove an important source of support for stocks. What growth stock leadership, household purchasing power, and ISM services data reveal about market risk. How debt-funded AI spending and widening credit spreads change the risks facing technology companies. Why extreme stock outperformance versus bonds could matter for portfolio allocation. The difference between rising profits per worker and sustainable economic productivity. Why Jim expects a tech bear market but a more moderate correction in the broader S&P 500. Timestamps: 00:00 Why oil, rates, and tight policy worry Jim05:43 The three-way split hiding beneath strong earnings09:58 Why low jobless claims may be misleading16:18 When business investment stops creating jobs20:48 Can consumer spending outrun real income?26:01 How the wall of worry has supported stocks31:44 Investor complacency and a shift toward growth fears36:58 The disconnect between Main Street and Wall Street41:35 AI debt financing, credit spreads, and the case for bonds47:25 Investment per worker and the yield curve's earnings warning51:52 Profit productivity versus real economic productivity58:08 Why Jim expects a tech bear market and a broader correction Learn more about the Excess Returns podcast network: https://excessreturns.co No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.

In this episode of The Jim Paulsen Show, Jim explains why weakening labor data, softening inflation, and lagged policy tightening could shift markets from inflation fears toward growth and recession fears. He also breaks down why the AI productivity boom may be overstated, how AI capital spending is supporting the economy, why Treasury yields look too high, and why investors may want to rebalance from new era technology stocks toward old era stocks and bonds. Jim Paulsen on Xhttps://x.com/jimwpaulsen Paulsen Perspectiveshttps://paulsenperspectives.substack.com/ Topics Covered Why weak jobs data and benign inflation have changed the outlook for the Federal Reserve Labor force contraction, stalled job growth, and the risks facing consumer spending Housing affordability, services activity, real income, savings, and signs of economic weakness How the stock-bond correlation can reveal a shift from inflation fears to growth and recession fears Why Jim expects Fed rate cuts before year-end and sees downside risk for Treasury yields How higher oil prices, bond yields, and the dollar can hit stocks and the economy with a lag Why today's AI productivity boom may be a mirage rather than a repeat of the 1960s or 1990s How AI CapEx, core capital goods orders, and technology stocks are linked Why the 10-year Treasury yield may be mispriced relative to growth and inflation The widening divide between new era and old era stocks and what it could mean for portfolio allocation Timestamps 00:00 Jim's outlook: weak jobs, benign inflation, and growth fears04:11 Labor force rollover and consumer warning signs09:06 Real income collapse and economic surprise data13:06 Why bond yields could fall below 4 percent17:45 Why Jim expects Fed cuts instead of hikes22:07 How policy tightening hits the economy with a lag26:16 Why productivity gains can be a recession mirage30:20 What a true productivity boom looks like34:38 AI stocks as a leading signal for capital spending39:08 Why Treasury yields may be mispriced44:31 Oil, core inflation, and the case for easing48:32 New era versus old era correlation as a warning52:54 Why today's AI economy may be more vulnerable than dot-com57:22 Portfolio allocation takeaways: bonds, old era, and tech Learn more about the Excess Returns podcast network:https://excessreturns.co No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.

In this episode of the Jim Paulsen Show we discuss why weakening economic momentum, tightening financial conditions and extreme AI enthusiasm could set the stage for a 10% to 20% stock market correction. We cover labor market weakness, the growing divide between technology and the broader economy, fading tech leadership, market complacency, bond yields and the demographic forces that could keep US growth and inflation lower for years. Jim also explains why he does not expect a recession or the end of the long-term bull market, but believes investors may need to reduce their concentration in AI and technology stocks as leadership quietly shifts toward the broader market. Jim Paulsen on X https://x.com/jimwpaulsen Paulsen Perspectives https://paulsenperspectives.substack.com/ Main topics covered • Why Jim expects a 10% to 20% market correction without a recession • What zero job creation, declining full-time employment and rising unemployment reveal about the labor market • Why housing starts, real disposable income and GDP forecasts point to weaker economic growth • How higher Treasury yields, oil prices, a stronger dollar and slower money growth have tightened financial conditions • Why the economic damage from an oil shock often appears after oil prices peak • The widening earnings and economic divide between AI investment and the rest of the economy • What investor positioning, shrinking liquidity and low defensive exposure reveal about market complacency • Why strong earnings momentum does not eliminate the risk of a market decline • Evidence that technology, communication services and the Magnificent Seven are losing market leadership • Why old economy sectors may outperform technology during the next stage of the bull market • How weak labor force growth could push economic growth, inflation and Treasury yields lower • Why demographics, immigration and productivity will shape the long-term US economic outlook Timestamps 00:00 Why Jim Paulsen expects a 10% to 20% market correction 04:32 The labor market weakness investors may be overlooking 08:42 Housing, disposable income and GDP growth are deteriorating 13:03 How tighter financial conditions could slow the economy 17:09 Why oil shocks and the yield curve threaten earnings growth 21:41 Investor complacency and the disconnect between markets and Main Street 25:54 How today’s AI boom differs from the dot-com bubble 30:20 Defensive stocks reach an extreme last seen near major market tops 34:36 Record earnings expectations, momentum and extreme valuations 39:00 Technology, communication services and the Magnificent Seven lose momentum 43:00 The hidden market rotation from new era to old era stocks 47:01 Why Jim expects Treasury yields to fall below 3% 51:43 The demographic forces suppressing growth and inflation 55:45 America’s long-term growth challenge and what could change it

Jim Paulsen returns to Excess Returns to discuss why he is increasingly concerned about a meaningful stock market pullback, even though he does not expect a bear market. We cover the extreme divide between AI-driven “new era” stocks and the rest of the market, what oil and inflation could mean for the Fed, why tech earnings and market leadership have become so concentrated, and what investors should watch as the economy potentially shifts from inflation fears to growth fears. Jim Paulsen on Xhttps://x.com/jimwpaulsen Paulsen Perspectiveshttps://paulsenperspectives.substack.com/ Topics Covered Why Jim thinks the economy could weaken into the summer and fall The risk of a sharp stock market pullback without a full bear market How inflation, oil prices and geopolitical conflict are affecting the market Why the Fed may face a difficult decision under Kevin Warsh The extreme divide between new era tech stocks and old era stocks Why AI and innovation need to benefit the broader economy to be sustainable How tech earnings have become concentrated in only two S&P 500 sectors Why small-cap tech and unprofitable tech leadership may be a warning sign What past oil price peaks suggest about stock market corrections Why investor focus may shift from inflation risk to growth risk How this bull market has been driven by a series of booms in Mag 7, Bitcoin, gold, oil and AI Timestamps 00:00 Why AI has to benefit more than the tech sector05:18 Inflation, oil prices and the impact of geopolitical conflict10:54 New era stocks versus old era stocks15:43 Corporate cash, AI spending and pressure on tech investment20:17 Policy tightening and why economic momentum may slow25:31 Why AI must spread beyond the companies building it31:42 Why this tech boom is different from the 1990s36:51 Why market breadth keeps fading back into large-cap growth42:06 Small-cap tech and unprofitable tech start leading46:15 Why the damage from oil shocks often comes after oil peaks50:15 How the market could shift from inflation fear to growth fear54:40 The bull market of booms in Mag 7, Bitcoin, gold, oil and AI59:46 Jim’s main takeaway for investors now No information on this podcast should be construed as investment advice. Securities discussed in the podcast may be holdings of the firms of the hosts or their clients.

In this episode of the Jim Paulsen Show, we discuss why the U.S. economy may be weaker beneath the surface than the headline numbers suggest. We cover inflation, the Fed, oil risk, the Mag 7, AI spending, market concentration, international stocks, bonds, and Jim’s “bust booming” framework for understanding an economy where the new era is booming while much of the old economy is close to stall speed. Jim Paulsen on X https://x.com/jimwpaulsen Paulsen Perspectives https://paulsenperspectives.substack.com/ Topics Covered Why Jim thinks the U.S. economy is getting closer to stall speed How the Iran conflict and oil prices could affect inflation, growth and the Fed Why Jim believes the inflation fears are very different from the 1970s Why raising rates may not solve a supply-driven oil shock The case for Fed easing if growth becomes the dominant concern Why tech and the Mag 7 may underperform even without crashing How small caps, value stocks, equal weight indexes, international stocks and emerging markets fit into the same broad market bucket Jim’s “bust booming” framework for the U.S. economy Why new era investment spending is driving an unusually large share of GDP growth Why Main Street sentiment may be so weak despite strong stock market headlines How AI spending compares with the 1990s internet buildout Why a shift from inflation obsession to growth focus could change the market backdrop Why Jim thinks investors may want to reconsider long bonds Timestamps 00:00 Intro and Jim’s current market outlook 04:00 Iran, oil risk and why the conflict may be closer to resolution 08:46 Why slower growth could force the Fed to cut rates 13:44 International stocks, the dollar and broad market leadership 18:05 Why today’s inflation problem is not the 1970s 23:14 Defining the “bust booming” economy 28:17 Why the old era economy is near stall speed 32:25 How policy may be missing almost 90 percent of the economy 37:37 What happens if new era spending slows 41:51 How investors can think about new era exposure 46:36 AI spending, productivity and the 1990s internet comparison 50:17 Why AI disruption could require more policy stimulus 53:00 The major shift from inflation obsession to growth focus

This episode of Excess Returns features Jim Paulsen breaking down the current macro environment through a series of powerful indicators, including oil, interest rates, consumer behavior, and market sentiment. The discussion explores whether today’s environment signals a slowing economy—or the early stages of a new bull market hidden beneath the surface. Paulsen walks through a wide range of charts and frameworks, from the Walmart vs. luxury retail signal to private credit stress, productivity trends, and policy uncertainty, offering a data-driven perspective on where markets and the economy may be headed next. Paulsen Perspectives Substack https://paulsenperspectives.substack.com Topics Covered Why the recent oil spike hasn’t impacted inflation and interest rates as expected Slowing economic growth vs. recession risk and what the Fed might do next The Walmart vs luxury retail indicator and what it signals about the economy Private credit risks and how they differ from traditional credit crises Why many indicators point to a new bull market rather than a bear The role of sentiment, volatility, and uncertainty in driving market returns Market rotation from mega-cap “new era” stocks to broader market leadership Corporate profits divergence and the opportunity in the rest of the economy Liquidity, cash levels, and positioning as potential fuel for markets Productivity trends and whether AI-driven gains are real or overstated Timestamps 00:00 Intro and current macro backdrop 01:05 Oil spike and limited impact on yields and inflation 04:45 Growth outlook and why recession may still be avoided 07:10 Fed policy and the stagflation question 10:15 Walmart vs luxury retail indicator explained 13:40 Private credit stress vs traditional credit cycles 17:00 Why this isn’t 2008 and how balance sheets differ 19:50 Private credit risks and market spillover effects 22:15 Bear market fears vs signs of a new bull 23:45 Consumer confidence and its impact on returns 25:05 Oil spikes historically as buy signals 26:15 VIX, volatility, and market bottoms 27:05 Yield curve steepening and market implications 28:05 Sentiment indicators and what they really reflect 30:00 Market rotation and broadening beyond mega caps 32:45 Passing the baton from tech to broader markets 35:15 Corporate profits divergence and future potential 37:00 Policy uncertainty and why it can be bullish 42:05 Liquidity, cash levels, and risk allocation 43:20 Options positioning and put-call signals 44:05 Gold vs commodities and risk appetite 45:10 Consumer credit contraction and market signals 46:20 Polymarket recession probabilities as sentiment 47:30 Economic sentiment collapse and contrarian signals 48:10 Interest rate expectations and positioning 49:05 Unemployment trends and historical market bottoms 50:25 Productivity trends and AI impact on the economy

In this episode of the Jim Paulsen Show, Jim joins Jack Forehand and Justin Carbonneau to break down the macro forces shaping today’s markets and economy. Jim explains why the economy may be far weaker than headline GDP numbers suggest, how technology and AI investment are masking weakness in the broader economy, and why leadership in the stock market may be shifting. The conversation also explores the market implications of geopolitical conflict, the relationship between policy and market leadership, and how investors should think about AI’s long-term economic impact. Topics covered in this episode How geopolitical events like the Iran conflict affect markets, volatility, oil prices, and investor sentiment Why market reactions to geopolitical shocks often fade once the situation is “vetted” by investors The relationship between oil prices, the US dollar, and global financial markets Why Paulsen remains constructive on international stocks and emerging markets despite recent volatility Why energy and food now represent a much smaller share of consumer spending than in past inflation cycles The argument that inflation fears may be overstated given structural disinflationary forces in the economy How AI and technological innovation can destroy some jobs while simultaneously creating new economic demand Why technological progress often lowers costs and expands markets rather than simply eliminating work The concept that the “new economy” driven by technology investment is now large enough to influence overall GDP growth Paulsen’s analysis showing that roughly 11 percent of the economy tied to new-era investment is growing rapidly while the remaining 89 percent is barely growing Why the broader economy may resemble a recession even while headline GDP remains positive How the dominance of large technology companies in indexes like the S&P 500 may be masking weakness in the broader market The historical “toggle” between technology leadership and broader market leadership in equity markets Why policy conditions like the yield curve and monetary easing often drive leadership shifts toward value, small caps, and cyclical stocks Whether the Federal Reserve could begin easing policy without a traditional recession Why policy support may eventually broaden the bull market beyond technology stocks Timestamps 0:00 Jim Paulsen on geopolitical volatility, oil prices, and market reactions 2:50 How investors should think about the Iran conflict and market implications 10:50 The relationship between oil prices, the US dollar, and safe-haven flows 12:20 Why Paulsen likes international and emerging market stocks 14:30 Why higher oil prices may not lead to sustained inflation 18:40 AI disruption and the economic debate around jobs and productivity 23:00 How innovation historically creates new demand and economic growth 29:40 Technology is the tail wagging the economic dog 33:30 Why the “new economy” is growing far faster than the rest of the economy 37:00 Evidence that most of the economy may already resemble a recession 41:00 Profit growth disparity between technology and the rest of the economy 45:40 Why the stock market can mask weakness in the broader economy 46:30 The historical leadership toggle between tech and the broader market 49:00 Valuation differences between technology and other sectors 50:30 How policy conditions influence market leadership 55:00 Signs that leadership may already be shifting beyond tech 57:00 Could the Fed ease without a traditional recession 59:00 What a policy shift could mean for the next phase of the bull market

In this episode of the Jim Paulsen Show, Jim joins Jack Forehand and Justin Carbonneau to break down what’s really happening beneath the surface of today’s market and economy. Jim explains why recent market strength may be masking a major leadership transition, why tech’s dominance is quietly fading, and how policy, labor market stress, and uncertainty are shaping the next phase of the cycle. The conversation spans equity leadership, AI and productivity, animal spirits, jobs data, inflation, and why periods of peak uncertainty have historically created opportunity for long-term investors. Main topics covered • The emerging shift in market leadership away from mega-cap tech toward small caps, cyclicals, value, and international stocks • Why tech has underperformed the broader market for over a year and what that signals for portfolio positioning • How Fed policy, liquidity, the dollar, and the yield curve drive broader market participation • The idea of a bull within a bull and why this cycle looks different from past tech-driven markets • AI, productivity growth, and why recent productivity gains may be misleading • Why measuring productivity in a service- and technology-driven economy is increasingly difficult • Economic policy uncertainty, market volatility, and why uncertainty has historically favored equity investors • Warning signs in the labor market, including job growth, unemployment duration, youth employment, and layoffs • Why weakening jobs data could force further monetary and fiscal easing • Inflation trends, policy trade-offs, and what matters more for markets going forward Timestamps 00:00 Market leadership shifts and why small caps and cyclicals are showing new strength 05:00 Tech underperformance and what it means for the broader market 08:00 Can the market rise while tech underperforms 14:00 Animal spirits and early-cycle behavior in overlooked stocks 16:20 AI, productivity, and why recent gains may be a mirage 23:40 Economic policy uncertainty and why markets climb the wall of worry 31:45 The labor market under the hood and why jobs matter most for policy 39:30 Structural changes since the financial crisis and the loss of animal spirits 49:45 Additional labor market warning signs and savings drawdowns 55:50 Inflation trends and why policy support may continue

In this episode of the Jim Paulsen Show, Jim Paulsen joins Jack Forehand and Justin Carbonneau to break down what the economy and markets may really be signaling beneath the headline numbers. Drawing from his recent outlook and long history studying market cycles, Jim explains why growth may be weaker than it appears, how policy lags are shaping the outlook, and why today’s market looks very different from past late-cycle environments. The conversation explores the divide between the “new era” economy and the rest of the market, what that means for investors in 2026, and where opportunities may be emerging as monetary and fiscal policy begin to shift. Topics covered in this episode • Why headline GDP growth may be overstating the true strength of the economy • How trade distortions are affecting recent GDP data • The concept of a “no-shaped economy” and the divide between new era and old era businesses • Labor market signals that suggest economic sluggishness beneath the surface • Why this may be one of the most disliked bull markets in history • The role of policy lags and why easing could matter more than investors expect • How market concentration has shaped returns over the last several years • Warning signs emerging within the technology sector • The relationship between corporate cash levels, R&D spending, and tech leadership • Why market breadth and old era sectors may become more important going forward • Thoughts on bonds, stocks, commodities, gold, and portfolio positioning • Why international and emerging markets could benefit from a weaker dollar • How investors might think about diversification in an unusual market cycle Timestamps 00:00 Introduction and key themes from Jim’s outlook 03:00 Why the economy may be weaker than GDP headlines suggest 06:00 Labor market signals and recession-like dynamics 12:00 Policy lags, the Fed, and why growth could soften further 15:00 Market performance after multiple strong years 18:00 The no-shaped economy and the split between new era and old era 24:00 Strange market signals at all-time highs 27:00 Valuations, sentiment, and why pessimism matters 29:00 Fed easing expectations and consensus forecasts 35:00 Warning signs for technology stocks 42:00 Corporate cash, R&D spending, and tech leadership risks 47:00 Portfolio construction and asset allocation thinking 55:00 Final thoughts on opportunities and risks ahead

In this episode, we’re joined again by Jim Paulsen to break down the key themes shaping markets and the economy heading into 2026. Jim explains why policymakers may be fighting the wrong battle, why real sustainable growth has quietly collapsed over the past 20 years, and how shifts in policy, demographics, productivity, inflation, and investor psychology all tie together. We also walk through Jim’s latest charts from Paulsen Perspectives and explore what they mean for stocks, sectors, interest rates, the dollar, and leadership in the year ahead. Topics covered in this episode: • The state of inflation and why CPI and PPI may be sending a very different message • The 20-year collapse in real sustainable GDP growth • Why job creation, labor force growth, and productivity have all structurally weakened • The rise in unemployment duration and what it signals about lost “animal spirits” • How demographics, immigration policy, and cultural shifts are shaping growth • Productivity puzzles: innovation vs. distraction in a tech-driven economy • Why the real economic risk may be deflation, not inflation • How monetary policy, the yield curve, the dollar, and fiscal policy have remained contractionary • Tariffs as a hidden tax and their real impact on inflation • How an easing cycle could reshape market leadership in 2026 • Jim’s Total Policy Stimulus Index and what it reveals about small caps, cyclicals, value, and foreign stocks • The difference between today’s tech cycle and the dot-com bubble • What a broadening market might look like if policy finally turns supportive • How international equities could respond to a weaker dollar • Why tech may underperform without collapsing • Jim’s expectations for S&P 500 returns in 2026 and the potential for a more balanced leadership environment Timestamps: 00:00 Market setup and inflation overview 02:00 Reviewing recent corrections and sector broadening 04:00 Bond yields, easing expectations, and fear-based asset leadership 06:00 Tech’s relative performance beginning to fade 07:00 GDP growth collapse over two decades 09:00 Structural slowdown in job creation 10:30 Labor force growth and aging demographics 12:00 The doubling of unemployment duration 14:00 Population trends, immigration, and slowing productivity 17:00 The rise of de-risking and falling monetary velocity 19:00 Trade deficits, globalization, and policy contraction 22:00 Why inflation risk may be overstated 26:00 CPI/PPI data versus the inflation narrative 29:00 Money supply, real rates, and the longest yield curve inversion 31:00 The strong dollar as a contractionary force 34:00 International stock performance and currency impact 35:00 Tax burden relative to slower growth 37:00 Tariffs as taxes and their real economic effect 39:00 What would it take to restore growth and optimism? 42:00 The Total Policy Stimulus Index explained 47:00 Policy’s impact on equal-weight, small caps, cyclicals, and value 52:00 How foreign stocks respond to policy and the dollar 54:00 Tech valuations today vs. the dot-com era 55:00 Fed response differences between now and 2000 57:00 Why today’s tech cycle is structurally different 59:00 What 2026 might look like for the S&P 500 01:01:00 Why price targets are inherently unreliable 01:01:45 Closing thoughts and sign-off

In this episode, Jim Paulsen returns to dive deep into market valuations, why the traditional valuation range may have permanently shifted higher, and how shifts in recession frequency, liquidity, innovation cycles, and policy regimes are reshaping return expectations. We also explore why fear remains a powerful tailwind for markets, the broadening beneath the surface of the AI-led rally, and why Jim believes this cycle could still deliver strong returns even as leadership rotates. Topics covered: • Why market valuations may never return to historical norms • How fewer recessions have structurally boosted market multiples • The role of liquidity buildup across households and corporations • Profit productivity and why companies are more valuable today • The limits of valuation metrics like CAPE and forward PE • Tech vs the rest of the market and the case for leadership rotation • Why fear and pessimism are still fueling this bull market • How policy regimes (monetary and fiscal) drive return frontiers • Capex cycles, AI infrastructure build-out, and lessons from past tech booms • Where Jim sees opportunity and where caution is warranted Timestamps: 00:00 Intro 03:00 Fear, pessimism, and the wall of worry 10:00 Data blackout, volatility, and what markets are signaling 16:00 Valuations breaking historic ranges 22:00 Broad-based valuation expansion across the market 29:00 Why the mean may be drifting higher 33:00 Fewer recessions and higher multiples 40:00 Corporate balance sheets and liquidity boom 42:00 Profit productivity and tech’s structural shift 49:00 Forward PE as a sentiment indicator 51:00 Tech vs the rest of the market 55:00 Innovation cycle vs business cycle 57:00 What’s still cheap and market breadth trends 01:00:00 The risk-return frontier and policy regimes 01:05:00 Final thoughts on AI, capex, and market risk

In this episode, we sit down with Jim Paulsen to analyze the latest economic and market data through his lens of decades of market experience. Jim shares insights from his Paulsen Perspectives research, covering the job market, the Fed, inflation, valuations, investor confidence, and what they all mean for the future of the economy and markets. We explore why confidence is so low despite a bull market, how Fed policy is shaping market dynamics, and where investors might want to focus as the cycle evolves. Topics covered in the episode: The job market’s pivotal role in driving the economy and Fed decisions Why recent Fed rate cuts may mark a turning point in market support systems The narrowness of the bull market and how innovation-driven firms diverge from traditional cycles Investor confidence, the “misery index,” and recession probability models How easing may broaden market participation beyond large-cap growth What “animal spirits” mean for small caps, high beta, and IPOs The disconnect between inflation, bond yields, and growth measures Gold, cash, crypto, and tech as “fear assets” in today’s environment The impact of tariffs on profits, wages, and inflation expectations Valuations in context: historical perspective and the upward bias of multiples Timestamps:00:00 Introduction and market overview02:00 Fed easing, inflation, and recession risks09:00 Bull market without normal supports17:00 Narrow leadership and innovative companies23:55 Confidence and the misery index29:35 Yield curve, recession probabilities, and Fed policy34:00 Broadening of market participation37:00 Animal spirit stocks and small caps38:00 Inflation, bond yields, and resource unemployment43:20 Copper-gold ratio and yields45:10 The role of gold in portfolios50:00 Cash, crypto, and tech as defensive assets54:00 Tariffs, inflation, and profit margins59:00 Inflation persistence vs. wage growth01:01:10 Valuations and the upward bias in multiples01:07:00 Closing thoughts and takeaways

In this episode, we break down the state of the economy, the Fed’s policy stance, inflation risks, and what’s really happening beneath the surface of the stock market. Jim explains why the headline numbers often mask the struggles of many companies, why the S&P 500 looks stretched while much of the market remains undervalued, and what investors should watch as we head into the fall. Weak GDP growth, jobs slowdown, and why the U.S. may avoid recession despite sluggish data How fiscal policy, tariffs, the dollar, and monetary policy are shaping growth Why corporate profits outside the S&P 500 remain below trend despite large-cap strength The Fed’s inflation obsession, the 2% target debate, and Jackson Hole policy shifts Jim’s case that inflation fears are overblown, with supporting data on CPI, PPI, wages, and expectations Historical supports for bull markets (liquidity, interest rates, dollar, confidence) and why they’ve been missing Divergence between S&P 500 valuations vs. the rest of the market Structural disconnect between small/mid-caps and large-cap earnings The opportunity for market broadening if the Fed eases policy What Jim will be watching heading into year-end 00:00 – Economic growth slowdown and risks of recession 02:00 – Policy backdrop: fiscal, monetary, dollar, and tariffs 07:00 – Why recession may still be avoided 15:00 – Powell, Jackson Hole, and the Fed’s inflation stance 24:00 – Are inflation fears overblown? 36:00 – Inflation surprise index and momentum 37:00 – What supports bull markets (liquidity, rates, dollar, confidence) 41:00 – Trendline analysis: S&P vs. broader market 47:00 – Russell 2000 earnings vs. S&P 500 divergence 52:00 – Corporate profits divergence and policy implications 59:00 – What Jim is watching heading into year-end

In the premiere episode of our new monthly series, The Jim Paulsen Show we dig into Jim's latest research and the charts that define today's economic and market landscape. Jim lays out a compelling case for why the private sector is more resilient than many believe, why a recession may not be on the horizon, and why so many parts of the market still look cheap despite record index levels. We explore the implications of tariffs, the underappreciated productivity boom, the potential for a market broadening, and the risks posed by policy uncertainty. Whether you're a macro thinker, a data-driven investor, or just trying to make sense of this confusing market, Jim brings clarity, charts, and contrarian insight. 🔍 Topics Covered: Why recession odds may be lower than consensus believes The disconnect between pessimism and actual economic conditions The impact of tariffs and why they may be disinflationary What’s really happening with the hard vs. soft economic data Why tech jobs are flat even as tech market cap soars The mystery of weak dividend growth during a bull market Why most corporate profits are below trend despite strong S&P earnings What could drive a broadening of the rally Valuation dispersion and why 76% of industries still look cheap Evidence micro caps may be leading a shift in market leadership What falling confidence among the wealthy might signal for stocks How we’re mismeasuring productivity in the AI era ⏱️ Timestamps:00:00 – Jim’s contrarian view: why a recession may not happen02:00 – Private sector balance sheet strength06:00 – The problem with policy staying tight during slow growth08:00 – Surprise index vs. hard data and what’s changing10:50 – Are tariffs truly inflationary?15:00 – Why financial markets aren't signaling inflation risk17:50 – Can hard data finally move the Fed?20:00 – Tech market cap vs. employment: why jobs aren’t growing25:30 – Dividend growth is stalling—what it means29:00 – Corporate profits: below trend for a decade33:00 – S&P profits vs. broader corporate earnings35:00 – Could the rally broaden beyond the Mag 7?38:00 – Micro caps and early signs of leadership shift40:00 – Why falling confidence among the wealthy may be bullish45:00 – 76% of industries are still cheap—how is that possible?48:00 – Sector breadth is historically narrow—why that could change50:00 – Tech’s risk-adjusted returns show surprising strength52:00 – Trump, the Fed, and the risk to central bank independence