Investors should remain confident in stocks despite residual inflation from the Biden administration, according to economist Peter Morici on Newsmax on Friday, predicting a broadening bull market in 2026 driven by stronger profit growth beyond the technology sector.
"'Oh, we can't grow more than 2% a year — it's impossible': The reality is we're having a big productivity breakout here these days between deregulation, artificial intelligence, a pro-growth administration," Morici, a University of Maryland business professor, told "American Agenda." "We're doing well.
"I think we're going to see a broadening of the bull market. The tech stocks are important. But there's only so much enthusiasm that can go into artificial intelligence.
"Rather, it's going to be the other 53 companies. My feeling is their profit growth will break into the double digits for the first time in a few years. They'll grow their earnings about 12.5% next year, and that should be enough to juice those stocks."
History shows the S&P 500 can even outpace inflation. Morici noted that during the four decades before the global financial crisis, inflation averaged about 4% annually while the S&P 500 returned roughly 11.5% a year.
He advises investing in the indices over stock picking.
"I'm not a stock picker, and I have to tell you I index invest," Morici said. "But you know, I'm very comfortable in my 70s because of that.
"I don't think it's possible to pick who's going to win and lose right now in this market.
"For example, with artificial intelligence, it's not going to be that people trying to, you know, teach a machine to think like Isaac Newton, but rather it's the folks that make these agents that the businesses are using to apply the technology to reduce labor costs — people like Salesforce and so forth.
"But there's a plethora of startups doing that, and it's very hard. You know, if you go back to 1920, picking who was going to be the top car company was tough."
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Eric Mack ✉
Eric Mack has been a writer and editor at Newsmax since 2016. He is a 1998 Syracuse University journalism graduate and a New York Press Association award-winning writer.
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