{"id":482565,"date":"2026-02-21T20:34:07","date_gmt":"2026-02-21T20:34:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/482565\/"},"modified":"2026-02-21T20:34:07","modified_gmt":"2026-02-21T20:34:07","slug":"chris-puplava-why-this-overheated-economy-isnt-rolling-over","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/482565\/","title":{"rendered":"Chris Puplava: Why This \u201cOverheated\u201d Economy Isn\u2019t Rolling Over"},"content":{"rendered":"

\n\tFebruary 20, 2026 \u2013 FSWM’s Chief Investment Officer, Chris Puplava, examines whether the \u201crunning hot\u201d economy thesis remains intact. Citing strong market breadth, surging advance-decline lines, and broad participation across cyclical sectors like energy, materials, industrials, banks, and transports, Puplava argues the bull market is still firmly in place. He also addresses AI\u2019s impact on software, shifting Fed policy dynamics, dollar weakness, and the outlook for gold and interest rates. While acknowledging potential risks\u2014such as rising bond yields or a yen carry trade unwind\u2014Puplava maintains that pullbacks would likely present buying opportunities. Have any feedback, breaking news, or comments about today’s show? Click here<\/a> to send us a message.<\/p>\n

\n\tAt Financial Sense\u00ae Wealth Management, we specialize in serving high net worth individuals to achieve their financial goals through tailored portfolio strategies and expert guidance. Reach out today at (888) 486-3939 or click here<\/a> to get in touch.<\/p>\n

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\tWhat Chris Puplava says<\/p>\n

\n\t\t\tThe \u201crunning hot\u201d economy thesis remains intact based on current market data and technical indicators.<\/p>\n

\n\t\t\tThe S&P 500 is showing strong market breadth, with elevated 52-week highs and a surging advance-decline line.<\/p>\n

\n\t\t\tKey cyclical sectors \u2014 including industrials, energy, materials, banks, and transports \u2014 are outperforming and trading above their 200-day moving averages.<\/p>\n

\n\t\t\tValue stocks continue to outperform growth, with strength also seen in small caps, emerging markets, and other risk-on assets.<\/p>\n

\n\t\t\tWeakness in software due to AI disruption is not materially harming the broader economy.<\/p>\n

\n\t\t\tPotential labor market softening from AI could temper wage inflation, giving the Federal Reserve room to remain dovish.<\/p>\n

\n\t\t\tThe U.S. dollar remains below its 200-day moving average, signaling a possible secular regime change.<\/p>\n

\n\t\t\tGold is strengthening across global currencies, potentially breaking out of sideways consolidation; silver shows early bottoming signs.<\/p>\n

\n\t\t\tThe firm remains overweight equities versus bonds, expecting potential pressure on interest rates from stronger growth and increased debt issuance.<\/p>\n

\n\t\t\tKey risks include a yen carry trade unwind or a sharp surge in U.S. bond yields, though neither is currently evident.<\/p>\n

\tTranscript<\/p>\n

\n\tCris Sheridan:
Well, today we’re going to discuss whether or not the economy is going to continue running hot, and some of the technical indicators that we use at Financial Sense Wealth Management for assessing the strength of the stock market and much, much more. Joining us on the show today is our Chief Investment Officer, Chris Puplava. So Chris, last month you produced a piece we posted on Financial Sense talking about the outlook for running the economy hot. We’ve already seen that. We have now seen some inflation data come out, along with GDP numbers. What is your assessment of the running-hot economy, and do you think this is going to continue for the remainder of this year?<\/p>\n

\n\tChris Puplava:
I do, Cris. You know, one of the things is my background is in science. My degree is actually in biochemistry, which is obviously different than what I’m doing now. But as a scientist, you have a thesis and you run experiments to see if your thesis is validated by the data. That’s what you can do with investing. You can have an outlook, but you always have to test that against what the data is actually doing. And the markets give us daily data. When I look at the data, I still see that the thesis of the economy running hot this year continues to be intact.<\/p>\n

\n\tFor example, recently we looked at the S&P 500 and the number of stocks hitting 52-week highs versus 52-week lows, and we just saw the highest level of new highs in the S&P in well over a year. So to me, the stock market is showing incredible resilience and strength. It’s broadening out. If you look at the advance-decline line for the S&P 500, it’s absolutely surging. So in terms of the market doing what you would expect it to do if the economy is strong, I continue to see that.<\/p>\n

\n\tAdditionally, looking at the credit markets, looking at distressed debt yields versus junk yields, we did have a little bit of a dip earlier this month, but that’s since come back. I’m not seeing any real glaring signs there. And also, if the economy is going to accelerate, what you would expect to see is those industries and sectors most tied to the economy doing well. And that’s exactly what we see.<\/p>\n

\n\tFor example, when you look at the S&P capital goods industry\u2014think Caterpillar, Cummins, or Eaton\u2014the percent of stocks above their 200-day moving average is almost 90%. That’s the highest level we’ve seen in almost two to three years. That sector is looking really good. Its performance has been blistering compared to the S&P 500.<\/p>\n

\n\tYou look at the energy index\u201495% of its members are above their 200-day moving average. It\u2019s had great relative strength to the S&P. When we look at the materials sector, same story there: 96% of the materials sector stocks are above their long-term moving average, and they\u2019ve beaten the pants off the S&P since the start of the year.<\/p>\n

\n\tThen when we look at other sectors such as banks, for example, 100% of the banks in the S&P 500 bank index are above their long-term moving average. So you\u2019ve got banks, industrials, energy, materials.<\/p>\n

\n\tThe other thing too is, if the economy is accelerating, with all this activity you\u2019re going to have to ship goods for exports and consumption. When you look at the transportation S&P industry, you\u2019re seeing 92% of its members above their long-term moving average. That index recently hit an all-time high, and it\u2019s beaten the S&P by a sizable margin over the last couple of months.<\/p>\n

\n\tSo when I look at that, Cris, to me I\u2019m seeing no signs at all that this thesis is starting to unravel. Now there is obviously some weakness when it comes to software and concerns that AI is going to replace a lot of those companies. But I don\u2019t see that hurting the broad economy overall. When you look at the cyclical sectors, they\u2019re still doing really well. A lot of these are classified as value versus growth, and value continues to outperform growth.<\/p>\n

\n\tYou\u2019re also seeing this in emerging markets, foreign equities, and small caps. All of these risk-on areas are still outperforming the broad index and look very healthy. So again, as of right now, I don\u2019t see any major warning signs that this thesis is unraveling.<\/p>\n

\n\tNow there could always be corrections. Obviously, today we have some turmoil with the Supreme Court knocking down Trump\u2019s tariffs. There\u2019s uncertainty about how Trump might try to get around that. But overall, absent normal healthy pullbacks and corrections, I think those would still be buying opportunities because it\u2019s very rare that you ever see the market peak on peak momentum where you\u2019ve got 52-week highs at their highest level in over a year. Usually you see deterioration before a major top. So again, I think any weakness would be a buying opportunity, and I still see the market heading higher in the months ahead.<\/p>\n

\n\tCris Sheridan:
You mentioned the damage that we’ve seen in the software space because of the rollout of agentic AI. That was something we discussed this week on FS Insider with Xavier Stonehouse regarding what we’re seeing with developments that are moving very, very fast\u2014with OpenAI, with Claude Cowork, and just in general the increasing autonomy of a lot of these large language models being able to multitask and do all sorts of different things. It’s quite amazing.<\/p>\n

\n\tBut I could be wrong on this. It would seem to me that a lot of these software companies could very easily incorporate agentic AI into their own business models. Yes, they may end up firing or laying off some of their workforce, as we’ve already seen with the big tech companies. But that\u2019s honestly going to make them more productive and more valuable in the end if they can make that transition.<\/p>\n

\n\tChris Puplava:
I would agree. I think a lot of companies are going to see rising profit margins. And for the broad market, if we do have some weakness in the labor market\u2014where we will likely see some jobs displaced by this\u2014then we\u2019ll probably see wage inflation tempered. That is a huge component of overall inflation levels.<\/p>\n

\n\tSo if inflation can stay tempered and you see some softening in employment, that gives some credence or support for the Fed to remain dovish in terms of cutting interest rates because job growth is stalling and inflation is not heating up, as well as continuing to expand its balance sheet.<\/p>\n

\n\tThat\u2019s going to be important. If Trump isn\u2019t able to get around the Supreme Court\u2019s knockdown of his tariffs, then what we\u2019re going to see is a budget deficit blowout because of the loss in tariff revenue, which means more debt issuance. That\u2019s part of why we\u2019re seeing interest rates spike and the dollar weaken today.<\/p>\n

\n\tIt\u2019ll be very important for the Fed to continue expanding its balance sheet if we\u2019re going to have a greater supply of debt issued by the U.S. Treasury.<\/p>\n

\n\tIn terms of the dollar and the implications of this, today you\u2019re seeing gold back comfortably above 5,000\u2014around 5,070 or so. When I look at gold versus foreign currencies, it is up against every single world currency. The same holds true over the last month, three months, and six-month period.<\/p>\n

\n\tThis could be the catalyst to end gold\u2019s sideways consolidation. Gold is starting to strengthen here. Same thing with silver\u2014there\u2019s potential that silver is trying to put in a bottom. I\u2019m not as confident on silver as I am on gold, but it does look encouraging.<\/p>\n

\n\tThe dollar continues to remain below its 200-day moving average. One of the things you and I have talked about repeatedly over the last several months is the potential for a secular change in the dollar. As of right now, I\u2019m not seeing any sign that the breakdown in the dollar is a false move. The longer the dollar stays below the 200-day moving average, the more it solidifies that we have a regime change underway and the dollar is likely heading lower.<\/p>\n

\n\tCris Sheridan:
As you mentioned, in 2025 we were seeing a parabolic increase in prices for both gold and silver. You were looking at that from a cautious standpoint. You had previously been quite bullish on metals but were recommending perhaps lowering exposure given the parabolic move and rotating into other parts of the commodity space.<\/p>\n

\n\tEnergy was one area in particular you discussed in 2025 that looked particularly attractive, as well as the materials sector. What have we seen happen since then?<\/p>\n

\n\tChris Puplava:
Well, the energy sector continues to head higher, obviously getting a bit of a lift from concerns about a possible U.S. strike on Iran. It is a little overheated, so I wouldn\u2019t be surprised to see the energy sector pull back a bit. But overall, I think the breakout we\u2019ve seen in energy is solid. Absent any near-term consolidation, I think energy is going higher.<\/p>\n

\n\tEnergy more or less peaked in \u201922, went sideways for three to four years, and then had a major breakout. I still think energy is going to be one of the top-performing sectors of the year, and we\u2019re already seeing that\u2014it\u2019s up almost 23% year to date.<\/p>\n

\n\tOn the fixed-income side, part of what we\u2019re doing is focusing our bond exposure based on our views. When you look at our asset allocation of stocks versus bonds, we\u2019re overweight stocks because we think interest rates could be pressured higher with the amount of debt issuance and a stronger economy.<\/p>\n

\n\tEven within corporate bonds, we\u2019re focused on the sectors we like, such as energy and materials. We\u2019re also getting creative by looking at convertibles. One position we bought for clients was a convertible energy stock that, if it doesn\u2019t work out and the stock doesn\u2019t do much, will behave like a bond. But if the stock does well, the convertible will perform more like the stock. That\u2019s done really well for us too.<\/p>\n

\n\tSo far, our thesis has remained intact, and that\u2019s showing up in performance. We\u2019re really happy with how the year is going so far.<\/p>\n

\n\tCris Sheridan:
So Chris, in sum, when you look at the technical outlook for the stock market\u2014advance-decline lines and many of the other indicators you follow\u2014you still believe the bull market is in place for the U.S. stock market. That aligns with the idea that the Trump administration is going to continue running things hot with the U.S. economy. That favors industrials, materials, and cyclical parts of the market, which is where we are positioned.<\/p>\n

\n\tAnd particularly as it relates to the U.S. dollar, if we continue to see the dollar in this bearish trend as it has been, that continues to favor these areas as well. So that\u2019s going to be a key area of focus. Does that summarize how we\u2019re positioned and our outlook, or is there anything you\u2019d like to add?<\/p>\n

\n\tChris Puplava:
No, that\u2019s a good summary of where we\u2019re at. We continue to look at the market to see if our thesis is validated. I would say the biggest concerns I have are possibly a major breakout in the yen that could lead to an unwind of the yen carry trade, or a substantial rise in U.S. bond yields.<\/p>\n

\n\tEverything you want to see is gradual. The market has a hard time with shocks, but as long as things are gradual, the market can absorb that. So those are the big things to worry about\u2014a yen carry trade unwind or a huge surge in bond yields. But as of right now, I don\u2019t see that. I still think the bulls have the upper hand at this point.<\/p>\n

\n\tCris Sheridan:
Chris, if any of our listeners would like to contact you about our money management services and see how they can participate in what we\u2019re doing here at Financial Sense Wealth Management\u2014whether it\u2019s corporate bonds or the specific sectors we have exposure to\u2014what would be the best way for them to contact you?<\/p>\n

\n\tChris Puplava:
They can reach me at 888-486-3939, or they can shoot me an email at chris[dot]puplava[at]financialsense[dot]com.<\/p>\n

\n\tTo learn more about Financial Sense\u00ae Wealth Management, give us a call at (888) 486-3939<\/a> or click here<\/a> to contact us.<\/p>\n

\n\tThe views and opinions expressed in this interview are solely those of the interviewee(s) and do not necessarily reflect the views, policies, or positions of Financial Sense Wealth Management.<\/p>\n

\n\tContent is for informational purposes only and does not constitute financial, investment, legal, or other advice.<\/p>\n

\n\tThere are risks involved in investing, including the potential for loss of principal.<\/p>\n

\n\tForward-looking statements are based on assumptions that may not materialize and are subject to risks and uncertainties.<\/p>\n

\n\tAny mention of specific securities or investment strategies is not an endorsement or recommendation.<\/p>\n

\n\tAdvisory services offered through Financial Sense\u00ae Advisors, Inc., a registered investment adviser. Securities offered through Financial Sense\u00ae Securities, Inc., Member FINRA\/SIPC. DBA Financial Sense\u00ae Wealth Management. Past performance is not indicative of future results.<\/p>\n","protected":false},"excerpt":{"rendered":"February 20, 2026 \u2013 FSWM’s Chief Investment Officer, Chris Puplava, examines whether the \u201crunning hot\u201d economy thesis remains…\n","protected":false},"author":2,"featured_media":482566,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,101],"class_list":["post-482565","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/482565","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=482565"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/482565\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/482566"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=482565"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=482565"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=482565"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}