Teton Crest Wealth Planning, 482 Constitution Way STE 111, Idaho Falls, ID (2026)

01/08/2026

The S&P 500 index is typically considered "the market." Over the last one hundred years, it has averaged 10.3 percent annually. For 74 out of those 100 years, it's returned a positive return with the average positive return being 21.4%. Only 26 years has it been negative. If I told you you could win at blackjack 3 out of every 4 games, would you ever quit? This is why the stock market is so powerful. And why starting soon and consistently contributing is the key to success. At Teton Crest Wealth Planning, we are always happy to talk to you about getting started with your investments or making sure that you're investing the right way.

01/06/2026

This is a great chart that tells an important story about market volatility.

The orange bars show how far the S&P 500 fell at its worst point during each year, while the blue bars show where the market finished by year-end.

For example, in 2025 the market was down as much as 19% during the year—but still finished up 16%. In 2022, the market dropped about 25% at its worst and ended the year down 19%.

The takeaway is simple: volatility is normal. Short-term declines can feel uncomfortable, but reacting emotionally during corrections often does more harm than good. Staying disciplined matters.

I’ll share another chart soon showing how often the market finishes a year up versus down—it adds even more perspective.

01/02/2026

I'm going to share some of my favorite annual charts over the next few days. Here's the first one: Although major world events can have an impact on the markets, long term markets consistently go up. Lesson: stay the course and don't panic.

12/22/2025

First Trust
Monday Morning Outlook
Greedy Innkeeper or Generous Capitalist?

Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 12/22/2025

The Bible story of the virgin birth is at the center of much of the holiday cheer this time of year. The book of Luke tells us that Mary and Joseph traveled to Bethlehem because Caesar Augustus decreed a census should be taken. Mary gave birth after arriving in Bethlehem and placed baby Jesus in a manger because there was “no room for them in the inn.”

Some people think Mary and Joseph were mistreated by a greedy innkeeper, who only cared about profits and decided the couple was not “worth” his normal accommodations. This version of the story (narrative) has been repeated many times in plays, skits, and sermons. It fits an anti-capitalist mentality that paints business owners as greedy, or even evil.

It persists even though the Bible records no complaints and there was apparently no charge for the stable. It may be the stable was the only place available. Bethlehem was over-crowded with people forced to return to their ancestral home for a census – ordered by the Romans – for the purpose of levying taxes. If there was a problem, it was due to unintended consequences of government policy. In this narrative, the government caused the problem.

The innkeeper was generous to a fault – a hero even. He was over-booked, but he charitably offered his stable, a facility he built with unknowing foresight. The innkeeper was willing and able to offer this facility even as government officials, who ordered and administered the census, slept in their own beds with little care for the well-being of those who had to travel regardless of their difficult life circumstances.

If you must find “evil” in either of these narratives, remember that evil is ultimately perpetrated by individuals, not the institutions in which they operate. And this is why it’s important to favor economic and political systems that limit the use and abuse of power over others. In the story of baby Jesus, a government law that requires innkeepers to always have extra rooms, or to take in anyone who asks, would “fix” the problem.

But these laws would also have unintended consequences. Fewer investors would back hotels because the cost of the regulations would reduce returns on investment. A hotel big enough to handle the rare census would be way too big in normal times. Even a bed and breakfast would face the potential of being sued. There would be fewer hotel rooms, prices would rise, and innkeepers would once again be called greedy. And if history is our guide, government would chastise them for price-gouging and then try to regulate prices.

This does not mean free markets are perfect or create utopia; they aren’t and they don’t. But businesses can’t force you to buy a service or product. You have a choice – even if it’s not exactly what you want. And good business people try to make you happy in creative and industrious ways.

Government doesn’t always care. In fact, if you happen to live in North Korea or Cuba, and are not happy about the way things are going, you can’t leave. And just in case you try, armed guards will help you think things through.

This is why the Framers of the US Constitution made sure there were “checks and balances” in our system of government. These checks and balances don’t always lead to good outcomes; we can think of many times when some wanted to ignore these safeguards. But, over time, the checks and balances help prevent the kinds of despotism we’ve seen develop elsewhere.

Neither free market capitalism, nor the checks and balances of the Constitution are the equivalent of having a true Savior. But they should give us all hope that the future will be brighter than many seem to think.

(We’ve published a version of this same Monday Morning Outlook during Christmas week, each year, since 2009.)

10/02/2025

Another government Shut down---It only effects 27% of the budget.

09/29/2025

First Trust
Monday Morning Outlook
The Shutdown Showdown

Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 9/29/2025

Economic data are all over the place. GDP keeps growing in spite of signs of weakness in the labor market. Tariff policy is volatile, immigration has slowed, monetary policy tightened in 2023-24, with the M2 measure of money declining and “real” short-term interest rates consistently higher than at any time since 2010.

Yes, M2 grew 4.8% in the past year, but this is slower than the pre-COVID trend of about 6.0%. And by virtually any valuation metric (price to earnings, price to sales, and our capitalized profits model) the stock market is expensive. Yet, it keeps moving higher, with investors showing no sign of worrying about anything.

Interestingly, even with a government shutdown looming, markets don’t seem to be worried at all in spite of talking heads and analysts warning this could cause a recession.

But there is no evidence of a link between shutdowns and recessions. In the past thirty years the government has been shut for a grand total of 80 days. Do you know how much of those 80 days we were in recession? Zero. Zilcho. Nada.

In other words, the US economy has been less likely to be in recession when the government has been shut than when it’s open. In fact, the closest a recession followed these shutdowns was fourteen months after the 2018-19 shutdown, and that recession was due to COVID.

None of this is to say that a recession couldn’t possibly follow on the heels of a government shutdown; it could happen. But if we get a recession, it’s going to be due to other factors like tighter money and volatile tariffs, not the shutdown.

Nor is a shutdown going to lead to some sort of emergency. The Treasury Department would still receive revenue and entitlement payments would still go out for Social Security, Medicare, and Medicaid. Treasury bondholders would get paid in full, both principal and interest. The military, border control, weather service, FAA, and the Post Office, among other operations, would still continue.

What would make this shutdown different is the posture of the Trump Administration. Normally, “essential” federal employees continue to work and “non-essential” employees stay home. When the shutdown ends, everyone gets back pay.

But this time the president is playing hardball. The Administration is telling agencies and departments to make lists of non-essential workers who can be permanently let go, which means that after the shutdown, many of these workers would have no job to go back to. Democrats are being forced to make a choice between a reduction in government workers and using the budget battles and potential shutdown to boost spending.

In other words, we may be approaching a watershed moment for the direction of federal spending, or at least the portion of spending subject to annual appropriations.

Government jobs have already declined, the Supreme Court just backed cuts to foreign aid and the looming shutdown battle seems poised to continue this process. The US government has been way too big for way too long, reducing freedom and stifling long term economic growth.

We see reason for optimism here. Shrinking the government boosts our long-term growth potential. That’s exceedingly good…but it also seems clear that markets have priced in lots of good news. Stocks are priced for perfection and while we always hope things turn out perfectly, they would have to turn out better than perfect to keep the market moving.

09/08/2025

First Trust
Monday Morning Outlook
Immigration, Tariffs, and AI, Oh My!

Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 9/8/2025

Over the past twenty years, in spite of incredible new technologies, US real GDP growth has averaged just 2.0% at an annual rate. By contrast, in the twenty years prior to the most recent twenty – from the mid-1980s thru the mid-2000s – real GDP grew at a 3.2% annual rate. Some slower growth is due to the aging and retirement of Boomers, but in our view, the real culprit is the expansion in the size of government.

Government spending surged in 2008 and during COVID. At the same time the Federal Reserve held interest rates extremely low, M2 growth surged, immigration accelerated, and environmental regulation altered economic activity. Economists in government and academia promised us this would boost growth and jobs, instead growth slowed.

But now policies are changing. The Big Beautiful Bill avoided a tax hike in 2026 (and made current tax rates permanent), tariffs are heading higher, immigration has slowed significantly, and regulations are being reduced. In the first half of this year, the economy grew at a 1.4% annual rate. The Atlanta Fed GDP Now model currently projects a 3.0% growth rate in the third quarter. If that forecast turns out to be accurate, the annualized growth rate for the first three quarters of this year would be 1.9%, in-line with the modest long-term 2.0% trend.

At the same time, Artificial Intelligence is taking off and even though estimates about how AI will impact productivity and growth are all over the map they all say it’s positive.

So, with all these cross currents, uncertainty is substantial and to say the economic data have been “quirky” lately would be an understatement. Nonfarm payrolls were up only 22,000 in August and are up only 70,000 per month in the past seven months versus growth of 146,000 per month in the same seven months in 2024. Trade patterns are extremely volatile, with real GDP down in Q1, but up in Q2 and Q3.

A sharp drop in immigration is likely a key factor behind slower job growth. Meanwhile, government payrolls are down 97,000 in the past seven months, the biggest (non-Census related) seven-month drop in at least 35 years. We view this a positive for long-term private sector growth, but also a drag on jobs in the short-term.

But even as job growth has slowed, much of the economy has been holding up quite well. Through July, retail sales are up 4.1% versus the same period in 2024; sales of cars and light trucks have averaged a 16.3 million annual rate so far this year, versus a 15.5 million rate in the first eight months of 2024. Manufacturing output in the first seven months of this year is up 0.8% versus the same seven months in 2024. That might not sound like much, but factory production is below where it was ten years ago, so any growth in this sector is good news.

Is some of this increase in manufacturing due to reshoring because of tariffs? After all, that’s what tariffs are supposed to do. But the stop-start nature of some of the tariffs, as well as uncertainty regarding whether the courts will eventually strike down the tariffs is likely an obstacle for many firms to build out this production in the US. It’s tough to make large, long-term commitments with so much uncertainty.

The case now nearing the Supreme Court is a prime example, with the Kalshi prediction market tilting toward a Trump Administration loss. This all has to do with questions about whether Congress has delegated authority over tariffs to the executive, or whether trade deficits, fentanyl and border security are “emergencies” which the executive must address.

But even if SCOTUS strikes down the tariffs by early next year, that’s not the last word. President Trump would likely use other laws already on the books to try to impose tariffs, or could seek legislation to raise tariffs, possibly through budget reconciliation, which would require only a simple majority in the Senate. In other words, uncertainty remains on this issue.

That leaves AI…clearly it changes things. Is it like the railroad or cellphone which accelerated travel, communication and trade? Or does it cannibalize activity in areas like search or coding? Growth in certain tech jobs has already leveled off. We are not Luddites and don’t expect mass unemployment from AI; but some will gain while others lose. In the near term we do not see an economic boom from AI similar to what happened in the 1990s in the first internet boom. Then, economic growth picked up quickly; so far, with AI, we are still waiting. And whether growth picks up in the future is still dependent on whether or not Congress and the President can get spending under control.

09/02/2025

First Trust
Monday Morning Outlook
Do Valuations Matter?

Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 9/2/2025

For the past two years, we have been warning that the stock market is overvalued. While our capitalized profits model is simple, it is more complex than just looking at price-earnings or price-sales ratios. We adjust for the level of the 10-year Treasury yield…the higher the yield the less stocks are worth. So, when inflation pushed bond yields up in 2022, our fair value calculation fell even though earnings continued to rise.

But in the past three years, the S&P 500 has risen faster than earnings and sales, so much so that The Wall Street Journal online put a story on its landing page headlined “Stocks Are Now Pricier Than They Were In The Dot-Com Era.” It led off with a stat that said the S&P 500 is now selling at 3.23 times sales (the median over the past 25-years is 1.7 times).

Price to sales is only one statistic. When we run our model, and include a 4.25% 10-year Treasury discount rate, the market is overvalued by roughly 40%, well below the 62% overvaluation seen in 1999.

Moreover, if the market falls, the Fed will likely cut rates. Our model shows a 2.85% 10-year yield would put the market at fair value. As a result, even though we are fearful the market is overvalued, we do not see a 40% drop in the cards. We would say the market is roughly 20% overvalued and maintain our target of 5,200 for the end of this year.

It is clear that there is a YOLO (You Only Live Once) trade going on, and daily options (no matter how crazy they seem) are being traded like baseball cards. Much like 1999, people have convinced themselves that markets will only go one way. Especially the tech stocks, powered by AI, the top 10 of which make up 39.5% of the S&P 500.

Clearly, economic data are mixed. The Trump Administration is using tariffs as one of many tools in attempts to remake the economy, and change is happening. But tariffs are a tax, and tax increases are not positive for economic growth. Moreover, any reshoring of investment in the US will take time and is still risky because future presidents may not hold tariffs in place. For that matter, the courts might rule them beyond the president’s power.

At the same time, we cannot discern whether earnings attributed to AI are just cannibalization of existing businesses (like search engines) or not. The market was right in the late 1990s. Cellphones, fiber optic internet connections, and faster computers with better operating systems would boost productivity and profits…it was just early. Is AI the magic technology that provides immediate and permanent returns? So far, the jury is still out. Real GDP in the first half of 2025 averaged just 1.4%, and job growth is slowing for a variety of reasons.

In other words, we remain cautious about the market as a whole and especially very expensive and very large market cap companies. There are plenty of sectors and stocks within the S&P 500 that still look attractive. That’s where we are focused.

We will get grief from those who have been bullish and correct. But our approach is rooted in fundamentals, not momentum. The history of markets consistently shows that valuation metrics tend to revert over time. There are price levels that simply don’t justify expectations of historical returns. We think today is one of those times. Back in 1999, some confidently claimed recessions were a thing of the past. They were wrong. We urge caution against excessive optimism today.

08/18/2025

First Trust
Monday Morning Outlook
Departures From Free-Markets Aren't New

Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 8/18/2025

Recently, due to deals President Trump is making, some are saying the United States has embarked on a version of Chinese-style “state capitalism” – directly entangling markets and government. No one is claiming that the US is as involved as the Communist Party dictatorship in China or authoritarian Russia, but certainly more entangled than a normal US free market approach would permit.

There are plenty of examples to go around, like the Trump Administration putting pressure on Intel to replace its CEO, wanting Goldman Sachs to fire an economist, demanding 15% of revenue from AI chip sales to China, creating a government-owned Golden Share in Nippon Steel’s purchase of US Steel, and pursuing pledges of hundreds of billions of investment from our trading partners to buy-down tariff rates.

On top of all this, the US is developing a system of tariffs that relies on the discretion of the president (and his team), varying from country to country, and in many cases product to product.

On the surface, the argument that the US is moving toward “state-run capitalism” seems to have a lot of evidence in its favor. What the argument ignores is that this started long ago.

Starting back in the 1930s, the government paid farmers either not to farm, or farm certain crops. In the 1970s, the US instituted price controls and differentiated between industries and even individual companies within industries. The US also capped oil prices, restricted branching by Savings and Loans and would not let banks pay interest on checking accounts.

For decades, by backing Government Sponsored Enterprises (GSEs), like Fannie Mae and Freddie Mac, government held mortgage rates artificially low which distorted the housing market. This bid up the price people were/are willing to pay for the existing stock of homes, while many state and local governments make it difficult to build new housing. The same thing goes for the takeover of student loans by the federal government and the push to forgive those loans. Anyone who thinks state capitalism is new doesn’t know history.

There are plenty of other long-standing interferences in the market in addition to these, like ethanol subsidies and gas mileage requirements (which, contrary to the narrative about Trump were recently watered down by the Big Beautiful Bill). The Biden Administration allocated green energy subsidies to favored firms under the Inflation Reduction Act, the CHIPS Act favored semiconductor production in the US, and the Nippon-US Steel takeover was originally blocked for political reasons. Environmentalists forced manufacturers to change lightbulbs, stoves, dishwashers, toilets, washing machines, and dryers.

So, forgive us if we yawn at the current gnashing of teeth over this issue in 2025. Are we supportive of it? No. But is it new? Absolutely not. We’ll breathe our last breathes standing up for free markets against political meddling. We are dismayed that Republicans, who are historically associated with supporting free markets, are willing to support this, instead. No wonder younger Americans who don’t know economic history well are often supportive of communism and socialism.

And while we fully understand this interference in markets began long ago, it accelerated in a huge way during the Financial Panic of 2008-09, when President George W. Bush bizarrely announced that he had to violate free market principles in order to save free markets.

Back in 2008, mark-to-market accounting procedures turned a manageable loss of housing value into a once-in-a-century financial panic. But instead of adjusting those accounting practices, policymakers set up TARP to bailout Big Banks, designed an auto bankruptcy that bailed out Big Labor, and launched multiple rounds of Quantitative Easing.

No wonder many people who might otherwise vote to support free markets became more receptive to the idea that the economic system was “rigged” in favor of certain groups. And, in turn, if politicians are going to rig the economic system in favor of those groups, why not their preferred special interests, as well?

The bottom line is that it would take a major change in political attitudes to undo the massive harm inflicted by the policy reaction to the 2008-09 crisis. We are hopeful this change in attitude arrives eventually, but don’t expect it anytime soon. The current leadership expects a surge in potential long-term economic growth from its policies, but the more the government entangles itself in the market, the less likely that is to happen.

05/30/2025

Trump Can Reset After Tariffs Ruling, Musk Exit. Why That’s Good for Stocks.

Never let a good crisis go to waste. A court ruling on tariffs and the departure of Elon Musk from the White House represent an opportunity—both for the Trump administration and markets.

Two key pillars of President Donald Trump’s term so far are now under threat. The majority of his tariffs are at risk from the Court of International Trade’s Wednesday ruling that they exceed presidential authority—although they remain in place pending an appeal—and Musk leaves without much to show for his goal of cutting $2 trillion from government spending.

There’s a chance the next phase of Trump’s administration is less volatile, which would be a positive for markets after months of uncertainty. While there are other ways to impose tariffs, they require a more considered process in order to withstand future legal challenges. Analysts at Vanguard expect such alternatives to lead to an effective tariff rate of slightly above 10%, down from around 19% currently.

Trump might argue the court ruling robs him of leverage in trade negotiations, especially when it comes to China where talks have “stalled” according to Treasury Secretary Scott Bessent. However, the market is already beginning to discount the administration’s willingness to endure economic pain, as witnessed by the increasing prominence of the TACO—“Trump Always Chickens Out”—trade.

Trump described the chicken accusation as “nasty” but he now has an opportunity to shed that reputation for good with a more strategic approach to tariffs and fixing the federal deficit. If he takes it, the stock market will have a far smoother path. But that’s a big if.

—Adam Clark, Barron's

05/12/2025

First Trust
Monday Morning Outlook
Is The Dollar Really Dying?

Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 5/12/2025

Back on January 10, 2025, it cost $1.024 to buy one Euro. Last Friday, the $/Euro exchange rate was $1.125 – a drop in the value of the dollar of about 10%. Similar moves in the value of the US dollar versus the British pound, Japanese yen, and Canadian dollar also occurred.

Many analysts have jumped on this drop in the dollar to attack President Trump’s tariff policies…basically saying that if we keep heading down this road foreigners will pull back from investing in the US, the dollar will fall, overseas investments will outperform, and the US will undermine its global exceptionalism.

As a quick aside, while panic-stricken, politically-motivated attacks are nothing new, the fear generated by “end-of-the-world-as-we-know-it” forecasts since 2008 have reached a frenzy. Investors would be better served by staying level-headed.

First of all, think of how many times you have read a headline that “billionaires are selling all their stocks,” or “the dollar is dead,” or “a crash, or depression, is coming.” Especially in the past seventeen years since 2008.

And none of these have happened. So, please stay level- headed. Yes, the dollar has moved sharply lower in the past four months or so, but if we look at five- or ten-year timeframes it is right in the middle of its trading range.

Yes, European stocks have outperformed US stocks this year, but European stocks are still trailing by a significant amount over the past decade or more.

So, what explains the movement in the dollar? Here is a theory that gets too little attention.

Everyone knows that there was a huge surge in the US trade deficit as importers were front-running tariffs. So, let’s think about what this means. When people sell goods to the US, they get dollars. In fact, there is a school of economic thought that says the world must run trade deficits with the US because the dollar is the world’s reserve currency and the world needs dollars to both trade and back their own sovereign currencies with one of the most trusted assets in the world.

Well, if this is true, and we believe it is, then how many dollars does the world really need? Between 2010 and 2020, the trade deficit averaged about $40 billion per month. From 2020 to 2024, the trade deficit averaged about $70 billion per month, but this was probably at least partly COVID induced…the US opened up faster than other countries.

Then in December, the trade deficit hit $98 billion, and then $131 billion in January, $123 billion in February, and $140 billion in March. If we compare this to the $70B per month average from 2024, in just 4 months of 2025, the US has sent $212 billion extra dollars overseas. $212 billion!!!!

Assuming that the demand for use of the dollar in international trade did not change one bit, that $212 billion of extra dollar supply in foreign hands would certainly knock its value down on foreign exchange markets. In other words, no wonder the dollar fell this year. We flooded the world with dollars by massively increasing our trade deficit.

Well, we believe the front-running comes to an end soon. Our bet is that this will lead to a stronger dollar as supply and demand come back into balance. The dollar is not dead or dying.

05/12/2025

We have become a consumption country instead of a production country. It might not hurt for us all to take a deep breath before making our purchases and ask ourselves, do I really need this hair accessor or artificial flower or desk accessory?

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