FPI February 2026 Economic Update
- Feb 2
- 3 min read
Bob Kramer - February 2, 2026
Greetings everyone. This is Bob Kramer giving you your February economic update with Financial Partners. So we're starting the new year. January is come and gone and one of the things I like to share with people is a little book called the stock market almanac in every year whether come out in the electronic or or paper form. The almanac does give stock market data and it goes way back to 1950.
Since 1950, if the stock market performed favorably in January, there is a 733% chance that the stock market, the balance of the year will also be favorable. So here we had a good year, a good month in in January, the market was a positive 1 and a half% and over the course of the last 70 years plus that market barometer is right about three out of four times.
If you batted 733 as a baseball player you would be in the Hall of Fame for sure if you did that over a long period of time. So we're really looking at a good start to the new year and optimism around among investors. We like to look at two different factors when we look at projections of the stock market performance.
The first is valuation. Valuation is commonly using a PE ratio or price-to-earnings ratio and the stock market of the S&P the S&P 500 which are the large stocks that PE ratio is around 23 or 24. Now that that number is kind of pricey right now the the PE ratio of smaller stocks which usually comprise the Russell 2000 is only about 16 or 18. So smaller and midsize stocks look a little little more price friendly but I also want to include what earnings projections are looking at.
So PE ratio: that is the the cost that you pay for those stocks for the the price to earnings ratio. The earnings estimate last year of 2025 was around 13% estimate. 13% is pretty good for a growth over the previous year. In 2026, the same company named 8 or projected an 18% estimate for 2026. How did they make those estimates? Well, corporations are making money right now. They're the consumer spending is way up and consumer spending comprises about 70% of the stock market performance. So interest rates right now are pretty favorable around 3 and a half to 3.75 on the Fed rate.
We also are welcoming the May meeting of the Fed. The Fed is projected or they are naming Kevin Worsh an ex Fed governor as his role of the next Fed chairman, replacing Jerome Powell. He is in Trump's camp as far as economic favoritism of lowering interest rates and we do think that if he is named which is by all indication we'll probably have a lower interest rate environment throughout 2026 and and in the years thereafter.
So things are looking pretty bullish right now in the stock market. Always before you make any
investment, talk with your investment advisor and make sure that you have the the now and the
soon buckets filled up before investing in anything that is volatile like stock market investments.
This is Bob Kramer signing off. Hope you have a great February and make sure you take care of your sweetie on on Valentine's Day coming up. Take care and look forward to talking with you soon. Bye-bye. Thank you very much.
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