0:02 Here's the thing. Everyone thinks that
0:04 we're going to be in a big crash coming
0:06 soon, right? Not so fast. I pulled
0:08 together some articles of some huge
0:10 financial institutions and other
0:12 analysts to see what they actually think
0:16 for 2026. And this absolutely shocked
0:17 me. And after this, I'm going to explain
0:20 what's probably happening next week with
0:22 the Fed rate cut and how that's going to
0:24 affect the stock market very short term.
0:26 Black Rockck also just dropped a
0:28 bombshell, shifting away from bonds and
0:31 long-term treasuries, which is a very
0:33 bad sign. My name is Nolan Goa. My
0:35 students call me Professor G, and I made
0:37 this channel to make investing
0:39 simplified. Remember that all investing
0:41 carries risk, so do your own research.
0:43 This is not financial advice, and I'm
0:45 not a financial adviser. Okay, so I put
0:48 together this table here and what you
0:50 can see are a bunch of these big
0:52 institutions like Morgan Stanley, Black
0:54 Rockck, Bank of America and overall if
0:56 we look at the outlook on US stocks in
0:59 that second column, most of them are
1:01 bullish or moderately bullish. Bank of
1:04 America is a little bit cautious but
1:05 they still think it's going to be
1:07 positive. If you look over to the next
1:10 side, the forecasted S&P 500 level, Bank
1:13 of America says it'll be around 7,100
1:16 for 2026. Remember, right now we're at
1:19 around 6,800. So that's still positive,
1:22 but that's only up 3 to 5% or so.
1:24 Whereas BNP at the bottom says 7,500.
1:27 Morgan Stanley at the top says 14% or so
1:30 upside over the next year. This is all
1:31 well and good, but we want to see the
1:33 key themes or drivers and even the
1:35 sector bias. So looking just at Morgan
1:37 Stanley, the key themes there would be
1:39 rate cuts, earnings, growth, and
1:43 rotations out of bonds. The sector bias
1:45 there is that they favor equities
1:47 broadly. For DWS, they say profit
1:50 recovery and monetary easing. The sector
1:53 bias there is cyclical sectors and rate
1:55 sensitive industries. For BlackRock,
1:57 they're saying AIdriven investment boom,
2:00 capex cycle, and rate cuts are going to
2:02 be the key themes and drivers. The
2:04 sector bias for them would be tech. AI
2:06 and infrastructure beneficiaries. Since
2:08 Bank of America is a little bit more of
2:10 like a warning tone, let's see what they
2:12 have to say, which is that they have
2:16 this AI air pocket, weak consumer, and
2:19 valuation risks. The sector bias for
2:21 them is overweight defensives like
2:23 healthc care, staples, and REITs and try
2:25 to underweight tech. Okay, so what does
2:27 this even mean, though? So, this type of
2:30 research suggests five basic things for
2:32 investors. From what I've compiled, the
2:34 base case is actually moderately
2:36 bullish. Many large institutions expect
2:38 US stocks to deliver solid gains in
2:41 2026, supported by rate cuts, earnings
2:44 growth, and growth themes like AI. There
2:46 are diverging views on risks, though
2:48 some are cautious, highlighting risk
2:50 from weak consumer spending, over
2:53 reliance on AI, or stretched valuations,
2:56 meaning volatility could rise. Now the
2:58 third thing here is that there is a
3:00 sector level divergence that's likely
3:04 techile stocks may outperform if growth
3:07 and investment continue but more
3:09 defensive sectors like healthc care
3:12 staples real estate financials also have
3:14 a case if economic growth or consumer
3:16 spending softens. Another thing that I
3:18 found that a lot of these institutions
3:20 are talking up even more is that
3:23 geographical investment could matter.
3:25 Several forecasts signal potential
3:28 upside outside the US, like specifically
3:30 in Europe, which could reward investors
3:33 with diversified global holdings. And
3:34 all of this leads to number five, which
3:36 is just the importance of flexibility.
3:39 Given mixed signals, many analysts
3:41 emphasize staying diversified and
3:43 flexible rather than leaning too heavily
3:45 into one sector or theme. I've been
3:47 saying this for about a year now. If
3:49 you're just relying on just AI or just
3:51 tech, know that that has never worked in
3:53 the history of the whole stock market.
3:56 You can't rely on one sector. Make sure
3:58 to keep yourself safe. Now, a lot of
4:00 this information was positive, but I did
4:02 come across a couple of institutions
4:03 that were very bearish and actually
4:07 saying the opposite, namely Vanguard, JP
4:10 Morgan, and Michael Bur. But then again,
4:13 when is Michael Bur not crying wolf? The
4:15 most likely decline range as far as if
4:17 the stock market's going to drop or not
4:20 in 2026 was between 10 and 20%. For the
4:22 most part, they're saying that it's
4:23 going to be a correction and not
4:27 necessarily a crash of over 20%. Unless
4:29 a perfect storm happens where multiple
4:31 different risks all hit at the same
4:34 time, like rate, global shock, or a tech
4:36 bubble. Risk isn't uniform, high growth,
4:39 highly leveraged, or AI dependent firms
4:41 are viewed as the most vulnerable.
4:43 defensive sectors or diversified
4:45 allocations may fare better. This is why
4:47 I've been talking so much about value
4:49 investing. Nobody really wants to do
4:51 that right now because it's not as fun.
4:53 The tech stuff and the AI stuff is going
4:57 crazy where things like SCHD or even VTV
5:00 are kind of staying steady growing at 5%
5:03 or something rather than 20 or 30%.
5:05 Understandable, but there are market
5:07 cycles and we just need to understand
5:10 that we may be shifting to a new one. So
5:12 overall, if there is going to be a
5:14 crash, I do believe it's going to mostly
5:16 be in tech or AI, specifically the
5:19 high-risk type sectors, maybe even in
5:21 the Bitcoin market, things that are
5:23 higher risk. For those with a long
5:24 enough investing horizon, though, this
5:26 should not be scary. This should excite
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6:44 Okay, so one of the biggest things
6:46 that's going to affect our stock market
6:48 right now is the Fed meeting happening
6:52 next week. The FOMC Fed watch tool has a
6:54 huge majority that believe we will see a
6:56 cut next week. The reason for that is
6:58 signs of a weakening labor market which
7:01 is increasing expectations for that.
7:03 Recent data showed job losses. The
7:06 private payroll provider ADP reported a
7:08 drop in jobs, marking the third decline
7:11 in four months. Also, total US layoffs
7:14 for 2025 just passed 1.17 million, the
7:16 highest since the pandemic, with
7:20 November alone accounting for 71,000 job
7:23 cuts. This weak labor backdrop has
7:25 strengthened the case that the Fed may
7:28 cut rates soon, boosting investor risk
7:29 appetite. We could definitely see
7:32 further upside if the Fed signals a rate
7:34 cut. This will especially benefit small
7:38 caps, financials, and non- tech sectors.
7:40 But if the Fed doesn't make a rate cut,
7:42 then we're in for a roller coaster
7:44 market. With so many already pricing in
7:47 the cut, a non-cut would absolutely flip
7:49 the script. Markets don't crash on
7:52 decisions, they crash on surprises. So,
7:54 if the market's already pricing in this
7:56 rate cut, but Powell doesn't deliver,
7:57 the reaction could be a sell-off.
8:00 specifically in tech or small caps, high
8:03 valuation growth, maybe real estate or
8:05 rate specific style investing, bond
8:07 yields would jump and risk assets would
8:09 drop fast. But we're not in for
8:12 something like a huge crash like a 20%
8:13 drop or something like that unless
8:15 Powell comes out and says something
8:17 like, "Not only are we not cutting
8:18 rates, we're actually going to increase
8:21 rates." If Powell simply just delays the
8:23 cuts, then usually what happens in the
8:25 market is that the market does have a
8:26 little bit of a pullback, but nothing
8:29 crazy. Historically, stocks dip on
8:31 disappointment, yields go up, volatility
8:33 spikes, but markets usually stabilize
8:35 within days or weeks. Think of it like
8:38 an air pocket, not like a crash. But let
8:39 me hit back on that point that I said
8:43 earlier. What would cause a major crash
8:45 would be a Powell no cut also with some
8:48 type of hawkish message from Powell. If
8:50 Powell says something like, "We're not
8:52 close to cutting. Rates may need to stay
8:55 higher for longer." That's when markets
8:57 break down. If job losses are rising,
9:00 which they are, and Powell still refuses
9:02 to cut, markets could interpret this as
9:04 a policy mistake. And that's when
9:07 markets absolutely go crazy and a major
9:08 correction is in store. We'll just have
9:10 to see what happens. I'm definitely
9:11 going to keep you informed. And with
9:13 that, you should sign up for my free
9:14 newsletter that I just started. Down
9:16 below in the description is the link.
9:18 It's totally free and I'll only send one
9:20 or two out per month, so I won't spam
9:22 you, but anything big will receive a
9:24 newsletter write up and you'll be well
9:26 informed. Join the 10,000 investors that
9:28 have already signed up with the link
9:30 down in the description. Now, the last
9:31 news that I want to get into is actually
9:33 a very big one, and it's from Black
9:36 Rockck, which warned on long-term US
9:39 Treasury bonds as AI related borrowing
9:41 has surged. Black Rockck shifted its
9:43 stance on long-term US treasuries from
9:45 neutral to underweight, warning that
9:47 heavy borrowing tied to AI
9:48 infrastructure could drive interest
9:51 rates up again. The firm, while still
9:54 somewhat bullish on US equities overall,
9:56 flagged increased systemic risk if debt
9:58 financed AI investments trigger
10:00 instability. The shift away from
10:03 long-term US treasuries by a major
10:05 institution like Black Rockck highlights
10:07 concerns about increased leverage and
10:10 potential instability tied to AI
10:11 investment waves. We're kind of right
10:13 now in the middle of this possible
10:15 storm. Either the storm's going to get
10:16 better or it's going to get a little bit
10:18 worse. But right now, the best way to
10:20 protect yourself would just be to make
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