The U.S. economy is expected to pick up tailwinds in 2026, and we’re already seeing green shoots, though it’s worth noting that January data can be noisy. The rotation taking place in equity markets isn’t purely speculative. Money is flooding into emerging markets. Devastation in the software industry continues to be the main story in financial markets. Where is all the funding for AI capex coming from? Healthcare. An historic mandate. Demographic destiny.
1. The U.S. manufacturing sector unexpectedly expanded in January:
Source: Bloomberg Odd Lots
2. The labor market has been tepid the past year, but there are signs it’s improving on the margin:
Source: @mtkonczal via the Daily Chartbook on 2/11/2026
3. The recent rotation has been violent in the short-term, but it’s still a blip on many long-term charts:
Source: John Authers, Points of Return
4. After years of stagnation, earnings growth for the median Russell 3000 stock turned positive and accelerated in 2025:
Source: @_joshschafer via the Daily Chartbook on 2/9/2026
5. Investors are betting that emerging markets have finally turned the corner:
Source: John Authers, Points of Return
6. With all major regions seeing positive investment flows:
Source: John Authers, Points of Return
7. Emerging market earnings expectations have improved materially:
Source: John Authers, Points of Return
8. The software industry is a cautionary tale for why valuations matter. Rich valuations don’t stay that way as businesses mature and leave little room for the unexpected:
Source: Bloomberg Markets Daily
9. Perhaps surprisingly, there is quite a bit of private debt tied to software companies:
Source: Barclays via Bloomberg Odd Lots
10. Capex expectations for major AI firms keep moving higher:
Source: Bloomberg Evening Briefing
11. Which has a material impact on aggregate capex and stock buybacks for the S&P 500:
Source: Nomura, Bloomberg Odd Lots
12. Healthcare’s share of U.S. economic activity continues to rise:
Source: Bloomberg Odd Lots
13. Japanese voters delivered a strong mandate to the current government, which was well received by capital markets:
Source: John Authers, Points of Return
14. The labor market appears at or near full employment for prime age workers:
Source: John Authers, Points of Return
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