In this midyear outlook episode of Facts vs Feelings, Ryan Detrick, Chief Market Strategist at Carson Group, and Sonu Varghese, Chief Macro Strategist at Carson Group, revisit their 2026 forecast and explain why they’ve raised their S&P 500 target from 12-15% to 15-18% for the year, while holding bonds steady at 3-5%. They walk through how AI capex has become a macroeconomic story as much as a market one, contributing roughly 90 basis points per quarter to real GDP growth, and why hyperscaler spending plans for 2026 and 2027 keep getting revised sharply higher.
The conversation covers the labor market’s quiet resilience, why business creation data suggests confidence rather than desperation, an inflation picture that isn’t going away despite market expectations for Fed rate hikes, and a sector rotation story where former “value” stocks like Micron have become momentum plays almost overnight. Ryan and Sonu also dig into earnings estimate revisions, midterm-year volatility patterns, diversifiers like gold and managed futures, and swap stories from their World Cup travels before previewing next week’s guest.
Key Takeaways
- Carson raised its 2026 S&P 500 target from 12-15% to 15-18% at the midpoint of the year, with the index already up 11% total return year-to-date; bonds remain forecast at 3-5%.
- AI-related hardware and software investment (excluding data centers) has contributed about 45% of real GDP growth over the last five quarters, roughly 90 basis points per quarter.
- Hyperscaler capex estimates keep climbing: The five largest tech spenders were projected to spend $470 billion in 2026 back in November; that figure is now $740 billion, with 2027 estimates rising from $530 billion to nearly $900 billion.
- S&P 500 2026 EPS estimates have risen from $308 to $339 a share (up 10%) since the start of the year, with 2027 estimates up 12%, led by technology, energy, and materials.
- The labor market shows underlying strength despite headline softness, with unemployment at 4.2%, average payroll growth around 110,000 a month, and falling continuing claims.
- Inflation remains sticky due to incomplete tariff pass-through, reshoring-related cost increases, and rising computer/software prices, a reversal from the deflationary tech trends of the 1990s.
Jump to:
0:00 — Welcome and the Midyear Setup
1:45 — Why We Raised the Stock Target
5:38 — AI Spending Shows Up In GDP
9:44 — The Consumer Looks Better Than Feels
14:20 — Business Creation as a Confidence Signal
17:08 — The Real Leaders Inside “Tech”
18:53 — Earnings Keep Getting Revised Higher
27:03 — The Inflation Problem Isn’t Gone
31:06 — The Fed Pause Versus Hike Pricing
35:00 — Second-Half Equity Playbook and Rotation
42:19 — Volatility, Breadth, and Midterm Patterns
49:06 — Bonds, Oil Headlines, Gold, Diversifiers
52:55 — World Cup Travel Notes and Wrap-Up
57:08 — Disclosures
Connect with Ryan:
- LinkedIn: Ryan Detrick
- X: @ryandetrick
Connect with Sonu:
- LinkedIn: Sonu Varghese
- X: @sonusvarghese
Questions about the show? We’d love to hear from you! factsvsfeelings@carsongroup.com
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