In this edition of The Morning Update, Jeff Chidester sits down with weekly financial expert Thom Brueckner, CEO of Strategic Asset Conservation and host of Retirement Intelligence with Thom Brueckner on WFEA.
They examine current stock market dynamics, Federal Reserve policies, economic indicator trends, and political developments ahead of the upcoming midterm elections.
Stock Market Concentration vs. Broad Market S&P 500 Performance:
Thom explains why the S&P 500 index remains near record highs while over 40% of its component stocks trade more than 20% off their 52-week highs. Because the index is market-cap weighted, top mega-cap stocks (“hyper-scalers”) inflate the broader index while many smaller-cap equities experience bear-market territory.
U.S. Economic Resilience & Portfolio Allocation:
Citing market commentary from Citi Wealth’s JP Coviello, Thom reinforces the broader economy’s resilience. He advises long-term investors—especially retirees—to maintain proper asset allocation and hold through market pullbacks rather than trying to time cyclical sector shifts.
Interest Rates, Federal Reserve Policy, and Bank Lending:
Discussing rising 10-year Treasury yields (surpassing 5.25%) and commentary from Ken Fisher, Thom critique staff-driven economic models at the Federal Reserve. He emphasizes that maintaining healthy yield spreads between short- and long-term rates is essential to ensure banks continue lending for enterprise AI build-outs and corporate expansion.
Historical Market Trends During Midterm Election Years:
Thom highlights historical data showing strong post-midterm market recoveries. Leaving risk-managed portfolio assets invested through midterm periods has historically yielded positive returns 92% of the time, with average 9-month returns significantly outperforming the S&P 500’s historical average.
Polling Methodology & Public Sentiment:
Reviewing commentary from Stuart Varney, Trafalgar Group’s Robert Cahaly, and Victor Davis Hanson, Thom critiques conventional political polling models. He argues that oversampling, non-response bias, and flawed polling methodologies skew overall averages, whereas hyper-partisan engagement distorts traditional survey accuracy.
Economic and Political Stakeholder Choices:
The conversation concludes with a discussion on global events, Iranian IRGC rhetoric, and political policy contrasts, with Thom emphasizing the critical stakes for voters and the broader economic direction in the upcoming election cycle.
