Bespoke Investment Group co-founder Paul Hickey believes the stock market could do well in the coming year. He cautions investors to be prepared for surprises, stating, “Expect the unexpected,” during CNBC’s “Squawk Box.” While market conditions appear favorable, he notes that no one can predict what will happen in the short term.
Positive Economic Indicators
Hickey pointed out that strong factors, like low inflation and the current state of the dollar, oil prices, and U.S. Treasury yields, support a positive outlook for stocks. He described these conditions as a “three-headed monster,” where having these elements at low levels usually signals good times ahead for the market.
He also emphasizes the importance of well-performing stocks, like those in the “Magnificent Seven,” which may need to maintain their performance to support overall market growth.
Trends in Stock Performance
Hickey noted that since OpenAI’s ChatGPT launch, the stock market has mirrored past performance trends seen after Netscape’s introduction. He believes this association signals a solid future for the AI sector, despite skepticism from some investors.
His remarks include a dismissive attitude towards concerns about a potential AI bubble, suggesting the real bubble may exist in precious metal stocks, which have outperformed tech stocks like the Nasdaq Composite recently.
Market Expectations for 2026
As Wall Street prepares for the new trading year, CNBC Pro anticipates that the S&P 500 could reach 7,629 by the end of 2026. This projection indicates an increase of over 10% from last week’s closing numbers.
Hickey’s analysis comes amid increasing optimism about the market’s direction as the new year approaches.
