The Jim Paulsen Show

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 XTimestamps: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.coNo 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/jimwpaulsenPaulsen Perspectives: Jim's research and chartshttps://paulsenperspectives.substack.comTopics 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 correctionLearn more about the Excess Returns podcast network:https://excessreturns.coNo 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/jimwpaulsenPaulsen Perspectiveshttps://paulsenperspectives.substack.com/Topics CoveredWhy weak jobs data and benign inflation have changed the outlook for the Federal ReserveLabor force contraction, stalled job growth, and the risks facing consumer spendingHousing affordability, services activity, real income, savings, and signs of economic weaknessHow the stock-bond correlation can reveal a shift from inflation fears to growth and recession fearsWhy Jim expects Fed rate cuts before year-end and sees downside risk for Treasury yieldsHow higher oil prices, bond yields, and the dollar can hit stocks and the economy with a lagWhy today's AI productivity boom may be a mirage rather than a repeat of the 1960s or 1990sHow AI CapEx, core capital goods orders, and technology stocks are linkedWhy the 10-year Treasury yield may be mispriced relative to growth and inflationThe widening divide between new era and old era stocks and what it could mean for portfolio allocationTimestamps00:00 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 techLearn more about the Excess Returns podcast network:https://excessreturns.coNo 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 Xhttps://x.com/jimwpaulsenPaulsen Perspectiveshttps://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 outlookTimestamps00:00 Why Jim Paulsen expects a 10% to 20% market correction04:32 The labor market weakness investors may be overlooking08:42 Housing, disposable income and GDP growth are deteriorating13:03 How tighter financial conditions could slow the economy17:09 Why oil shocks and the yield curve threaten earnings growth21:41 Investor complacency and the disconnect between markets and Main Street25:54 How today’s AI boom differs from the dot-com bubble30:20 Defensive stocks reach an extreme last seen near major market tops34:36 Record earnings expectations, momentum and extreme valuations39:00 Technology, communication services and the Magnificent Seven lose momentum43:00 The hidden market rotation from new era to old era stocks47:01 Why Jim expects Treasury yields to fall below 3%51:43 The demographic forces suppressing growth and inflation55:45 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/jimwpaulsenPaulsen Perspectiveshttps://paulsenperspectives.substack.com/Topics CoveredWhy Jim thinks the economy could weaken into the summer and fallThe risk of a sharp stock market pullback without a full bear marketHow inflation, oil prices and geopolitical conflict are affecting the marketWhy the Fed may face a difficult decision under Kevin WarshThe extreme divide between new era tech stocks and old era stocksWhy AI and innovation need to benefit the broader economy to be sustainableHow tech earnings have become concentrated in only two S&P 500 sectorsWhy small-cap tech and unprofitable tech leadership may be a warning signWhat past oil price peaks suggest about stock market correctionsWhy investor focus may shift from inflation risk to growth riskHow this bull market has been driven by a series of booms in Mag 7, Bitcoin, gold, oil and AITimestamps00:00 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 nowNo 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 Xhttps://x.com/jimwpaulsenPaulsen Perspectiveshttps://paulsenperspectives.substack.com/Topics CoveredWhy Jim thinks the U.S. economy is getting closer to stall speedHow the Iran conflict and oil prices could affect inflation, growth and the FedWhy Jim believes the inflation fears are very different from the 1970sWhy raising rates may not solve a supply-driven oil shockThe case for Fed easing if growth becomes the dominant concernWhy tech and the Mag 7 may underperform even without crashingHow small caps, value stocks, equal weight indexes, international stocks and emerging markets fit into the same broad market bucketJim’s “bust booming” framework for the U.S. economyWhy new era investment spending is driving an unusually large share of GDP growthWhy Main Street sentiment may be so weak despite strong stock market headlinesHow AI spending compares with the 1990s internet buildoutWhy a shift from inflation obsession to growth focus could change the market backdropWhy Jim thinks investors may want to reconsider long bondsTimestamps00:00 Intro and Jim’s current market outlook04:00 Iran, oil risk and why the conflict may be closer to resolution08:46 Why slower growth could force the Fed to cut rates13:44 International stocks, the dollar and broad market leadership18:05 Why today’s inflation problem is not the 1970s23:14 Defining the “bust booming” economy28:17 Why the old era economy is near stall speed32:25 How policy may be missing almost 90 percent of the economy37:37 What happens if new era spending slows41:51 How investors can think about new era exposure46:36 AI spending, productivity and the 1990s internet comparison50:17 Why AI disruption could require more policy stimulus53:00 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 Substackhttps://paulsenperspectives.substack.comTopics CoveredWhy the recent oil spike hasn’t impacted inflation and interest rates as expectedSlowing economic growth vs. recession risk and what the Fed might do nextThe Walmart vs luxury retail indicator and what it signals about the economyPrivate credit risks and how they differ from traditional credit crisesWhy many indicators point to a new bull market rather than a bearThe role of sentiment, volatility, and uncertainty in driving market returnsMarket rotation from mega-cap “new era” stocks to broader market leadershipCorporate profits divergence and the opportunity in the rest of the economyLiquidity, cash levels, and positioning as potential fuel for marketsProductivity trends and whether AI-driven gains are real or overstatedTimestamps00:00 Intro and current macro backdrop01:05 Oil spike and limited impact on yields and inflation04:45 Growth outlook and why recession may still be avoided07:10 Fed policy and the stagflation question10:15 Walmart vs luxury retail indicator explained13:40 Private credit stress vs traditional credit cycles17:00 Why this isn’t 2008 and how balance sheets differ19:50 Private credit risks and market spillover effects22:15 Bear market fears vs signs of a new bull23:45 Consumer confidence and its impact on returns25:05 Oil spikes historically as buy signals26:15 VIX, volatility, and market bottoms27:05 Yield curve steepening and market implications28:05 Sentiment indicators and what they really reflect30:00 Market rotation and broadening beyond mega caps32:45 Passing the baton from tech to broader markets35:15 Corporate profits divergence and future potential37:00 Policy uncertainty and why it can be bullish42:05 Liquidity, cash levels, and risk allocation43:20 Options positioning and put-call signals44:05 Gold vs commodities and risk appetite45:10 Consumer credit contraction and market signals46:20 Polymarket recession probabilities as sentiment47:30 Economic sentiment collapse and contrarian signals48:10 Interest rate expectations and positioning49:05 Unemployment trends and historical market bottoms50:25 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 episodeHow geopolitical events like the Iran conflict affect markets, volatility, oil prices, and investor sentimentWhy market reactions to geopolitical shocks often fade once the situation is “vetted” by investorsThe relationship between oil prices, the US dollar, and global financial marketsWhy Paulsen remains constructive on international stocks and emerging markets despite recent volatilityWhy energy and food now represent a much smaller share of consumer spending than in past inflation cyclesThe argument that inflation fears may be overstated given structural disinflationary forces in the economyHow AI and technological innovation can destroy some jobs while simultaneously creating new economic demandWhy technological progress often lowers costs and expands markets rather than simply eliminating workThe concept that the “new economy” driven by technology investment is now large enough to influence overall GDP growthPaulsen’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 growingWhy the broader economy may resemble a recession even while headline GDP remains positiveHow the dominance of large technology companies in indexes like the S&P 500 may be masking weakness in the broader marketThe historical “toggle” between technology leadership and broader market leadership in equity marketsWhy policy conditions like the yield curve and monetary easing often drive leadership shifts toward value, small caps, and cyclical stocksWhether the Federal Reserve could begin easing policy without a traditional recessionWhy policy support may eventually broaden the bull market beyond technology stocksTimestamps0:00 Jim Paulsen on geopolitical volatility, oil prices, and market reactions2:50 How investors should think about the Iran conflict and market implications10:50 The relationship between oil prices, the US dollar, and safe-haven flows12:20 Why Paulsen likes international and emerging market stocks14:30 Why higher oil prices may not lead to sustained inflation18:40 AI disruption and the economic debate around jobs and productivity23:00 How innovation historically creates new demand and economic growth29:40 Technology is the tail wagging the economic dog33:30 Why the “new economy” is growing far faster than the rest of the economy37:00 Evidence that most of the economy may already resemble a recession41:00 Profit growth disparity between technology and the rest of the economy45:40 Why the stock market can mask weakness in the broader economy46:30 The historical leadership toggle between tech and the broader market49:00 Valuation differences between technology and other sectors50:30 How policy conditions influence market leadership55:00 Signs that leadership may already be shifting beyond tech57:00 Could the Fed ease without a traditional recession59:00 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 forwardTimestamps00:00 Market leadership shifts and why small caps and cyclicals are showing new strength05:00 Tech underperformance and what it means for the broader market08:00 Can the market rise while tech underperforms14:00 Animal spirits and early-cycle behavior in overlooked stocks16:20 AI, productivity, and why recent gains may be a mirage23:40 Economic policy uncertainty and why markets climb the wall of worry31:45 The labor market under the hood and why jobs matter most for policy39:30 Structural changes since the financial crisis and the loss of animal spirits49:45 Additional labor market warning signs and savings drawdowns55:50 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 cycleTimestamps00:00 Introduction and key themes from Jim’s outlook03:00 Why the economy may be weaker than GDP headlines suggest06:00 Labor market signals and recession-like dynamics12:00 Policy lags, the Fed, and why growth could soften further15:00 Market performance after multiple strong years18:00 The no-shaped economy and the split between new era and old era24:00 Strange market signals at all-time highs27:00 Valuations, sentiment, and why pessimism matters29:00 Fed easing expectations and consensus forecasts35:00 Warning signs for technology stocks42:00 Corporate cash, R&D spending, and tech leadership risks47:00 Portfolio construction and asset allocation thinking55:00 Final thoughts on opportunities and risks ahead