The Dividend Cafe Year Behind, Year Ahead – Special 2026 White Paper – January 9, 2026
Jan 9, 2026
Reflecting on 2025, David L. Bahnsen dissects the impact of tariffs and tax policies on the economy and stock market. He highlights the rise and vulnerabilities of the AI sector, alongside significant housing market trends. Predictions for 2026 suggest a tug-of-war between tariffs and tax benefits, potential declines in home prices, and an optimistic outlook for small-cap earnings. M&A activity is expected to thrive amid favorable conditions, while challenges in the labor market and economic drivers loom large.
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Episode notes
Big Questions Stayed The Same
- Major investor questions in Jan 2026 mirrored those from Jan 2025, just with more data.
- Policy (taxes, tariffs) remained the dominant source of market uncertainty through 2025.
Tariff Shock And The Market Put
- The Trump 2.0 inauguration set the policy agenda that dominated markets in early 2025.
- April's tariff threat caused an intraday S&P drawdown near 20% before the administration reversed course.
Falling Yields Helped Assets
- Bond yields fell through 2025 which supported valuations and boosted bond returns.
- The 10-year moved from about 4.5% to roughly 4.0% by mid-September, aiding asset performance.