Stock Talk - 1q26 Risks - Inflation Rising: Stock Market Update, Friday January 30, 2026

Episode Date: January 30, 2026

Early 2026 market volatility has my attention, despite realized volatility staying low... while the bond and options markets quietly flash warning signs for a choppy first quarter.   Today I'm revisiting why our team expected inflation to cool faster in 2025, driven by easing shelter costs, slowing wages, and productivity gains from AI, while also explaining why goods inflation may reaccelerate short term due to tariffs, reshoring, and higher input costs.   I share what’s keeping me up at night over the next few months, why a potential February Tax Day pullback wouldn’t end the bull market, and why we’d view it as one of the few real buying opportunities of the year. Elevated volatility creates discomfort, but historically, it also can create opportunity. Our team at Oak Harvest Financial Group is focused on helping long-term investors stay patient, prepared, and positioned no matter what 2026 throws our way.   About Chris Perras, CFA®, CLU®, ChFC®, Chief Investment Officer: As CIO, Chris is the lead investment strategist and director of research at Oak Harvest Financial Group. Chris develops the firm's core market outlook, putting his decades of experience and expertise to work for our clients. He hosts Oak Harvest's podcast, "Stock Talk," available on the website with new episodes each week. He completed his undergraduate studies at Georgia Tech, and went on to obtain an MBA from the Harvard Business School. Driven by a desire to maximize his knowledge and skill set, he acquired financial planning and investment management qualifications, becoming a Chartered Life Underwriter (CLU®), a Chartered Financial Consultant (ChFC®), and a Chartered Financial Analyst (CFA®).   Stock Talk is a weekly vlog/podcast dedicated to discussing the Oak Harvest Financial Group Investment Team's perspective on what's happening in the market. Hosted by Chief Investment Officer Chris Perras, each episode brings you our views on stocks, the market, and the economy with a little education thrown in for good measure. Listen each week and help stay connected to your money!   Do you need a retirement plan that goes beyond allocating funds to truly fit your needs? We can help you create a retirement life plan customized for your retirement vision and legacy. Call us at 877-896-0040 or fill out this form for a free visit: https://click2retire.com/lets-connect   Important disclosures: Content of Oak Harvest podcasts expresses the views of the speaker and is for informational purposes only. Oak Harvest believes that any data, articles, or information cited are reliable at the time of creation, but does not warrant any information contained herein to be correct, complete, accurate, or timely. References to third-party analysts should not be seen as an endorsement of their views or recommendations, and you should do your own research before investing. The views and opinions expressed herein may change without notice. Strategies and ideas discussed may not be right for you, and nothing in this podcast constitutes personalized investment, tax or legal advice, or an offer or solicitation to buy or sell securities. Indexes such as the S&P 500 are not available for direct investment and your investment results may differ when compared to an index. Any specific portfolio actions or strategies discussed will not apply to all client portfolios. Investing involves the risk of loss, and past performance is not indicative of future results.

Investors, for the first few weeks of 2006, our team discussed market volatility in our videos, both realized actual volatility seen in the markets, which was low, and implied volatility as expected by the options market, which, starting in mid-February-ish, looked higher. We talked about our thoughts on what might be a very sloppy, choppy first quarter with a pullback possible between February and mid-April. For the second half of 2025, in our videos and at our Oak Carvis educational events, Our team messaged what we saw is inflation dropping faster than others expected. A rational back then was focused on a few things. First, housing costs or shelter costs, as economists referred to them,

which our data said were slowing faster than the government data reflected in their numbers. Here's Goldman Sachs chart in their forecast on shelter inflation. Given the weakening job market and its forward effect on people moving after changing jobs and giving the tighter immigration policies over the last two years, Goldman Sachs expects shelter inflation to continue lower to 2.5% throughout 2006, below the 3% shelter costs that prior PCE measures came in at. Of course, that's a good thing on the good, bad scale of inflation. The other two parts of inflation equation are goods and services, each which rose

substantially after the reopening of the economy post-COVID 2020 fiscal and monetary stimulus programs. We all remember 2012 and the 7th. the 9% inflation prints during the year, don't we? Here's Goldman's charts on core goods and service inflation, and it's easy to see the Matterhorn-like inflation ramp in 2021, 2021, and it's slowed down ever since. On the service side, wage inflation continues to slow as a combination of weakening job market,

layoffs and white-collar jobs due to AI, and productivity gains of AI are helping keep service costs down. That's good news on the good-bad scale of inflation, which leaves only the good side of inflation, which according to Goldman Sachs, is slated to actually accelerate some here in the first half of 2006 on the back of tariff pass-throughs on new inventory purchases and higher commodity input costs. So Chris, inflation was coming down to 2025 like your team expected last year. Why are you dedicating an entire episode now when most seem to have moved on to other topics like geopolitics, Fed rate cuts and things like AI?

Well, investors, because our team gets paid to worry about things and risks, others aren't, trying to anticipate what fears linger around the corner before others do. And right now, the real-time market data in the bond market is flashing a severe yellow warning sign to May for an excuse for a first quarter sell-off, a sell-off that if it should happen, one that our team thinks would be one of the few buying opportunities of the year, but nonetheless, down is down. Investors, here's the imputed one-year break-even inflation rate as seen by the Treasury bond market. Yes, I know one year is likely to be a very short period for a very short period for a year.

investing standpoint or looking for market-based signs that might actually lead shorter-term investment downturns and upturns to help make tactical move and optimize one's investment portfolio if one so desires. As we've discussed in the past, inflation in the U.S. is seasonal. This seasonality happens a lot as where a service economy and wages and benefits change in the new year like Social Security, cost of living adjustment payment increases hitting in the new year and medical cost bumps in the new year as well. I mean, has anyone looked at their medical insurance renewal costs here in 2006? If you have it, sticker shock is coming. You can see the seasonal turns up in January and early April on the previous chart. The reshoring of manufacturing goods

here in the United States, all needed from a standpoint of independence, is inflationary. The exportation and deportation of low cost, lower end labor source, while a policy many agree with is inflationary. Weaker dollars, investment capital moves offshore to their home lanes, which the administration seems to be okay with is, yes, bad for higher inflation. So if you ask me, what keeps me up at night over the next three months? I have a simple answer. The stock market sniffs out late as it does most of the time, a seasonal impulse, higher inflation, causing a February call it to tax day sell off. Should this happen, does our team see it as the end of the bull market? No, that would be doubtful, given how earnings are likely to progress.

and likely a new Dubbish Fed chairman is in May. Investors, 2006 has started off fast and furious in a negative way with higher volatility. This was a risk our investment team had entering 2006, while our first video of the year was titled, Patience, after the Guns and Roses Rock Ballot. The first half of 2006 is one of those years that the options market is hinting at a real, buy-the-dip moment coming later in the first quarter. The good news is that our investment team has experience in these types of markets. Remember investors that elevated volatility also means elevated opportunity for longer term investors. Historically, investors' biggest incremental returns come from investing in volatility is high, not low, and markets are down, and others are either acting emotionally worse yet being forced to sell when they really should be pushing their chips into the center of the table and adding to their investments. So what does all this mean to you?

Our advice to you is keep following our investment content on Oak Carbis website, and our YouTube channels. We address our 2006 market outlooks last night on YouTube with Troy, Charles, and myself. Investors, whether you desire growth or income or a combination of both in your portfolio, the entire Oak Harvest team is here for our clients, doing what we can to plan for you and your family's future, regardless of what stage you're at in your career or in your retirement. All content contained with an Oak Harvest podcast expresses the views of the speaker and is for informational purposes only.

It is based on information believed to be reliable when created, but any cited data, indicators, statistics, or other sources are not guaranteed. The views and opinions expressed herein may change without notice. Strategies and ideas discussed may not be right for you, and nothing in this podcast should be considered as personalized investment, tax or legal advice, or an offer or solicitation to buy or sell securities. indexes such as the S&P 500 are not available for direct investment and your investment results may differ when compared to an index. Specific portfolio actions or strategies discussed will not apply to all client portfolios. Investing involves the risk of loss and past performance is not indicative of future results.