The S&P 500 (SPX) has returned 17.7% year-to-date and faces a “three-headed monster” heading into the new year, according to Bespoke Investment Group co-founder Paul Hickey. Contrary to the ominous name, the three-headed monster actually shows a positive sign for the stock market and refers to the U.S. dollar, oil, and the 10-year Treasury yield trading near their respective 52-week lows.
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“When all those are rising in unison, it’s usually a big headwind for the market,” said Hickey on CNBC’s “Squawk Box.” “When they’re all falling or near 52-week lows, like they are now, it’s like they’re rolling out the red carpet for equities.”
Is there a Bubble in AI Stocks?
Hickey also shrugged off the possibility of a bubble in AI stocks, adding that precious metals have outperformed the Nasdaq Composite in 2025. “If there is a bubble anywhere, I think it’s in some of these precious metal stocks,” he said.
While Hickey is “positioned positively” for 2026, he cautioned that “nobody knows what’s going to happen.” Still, he believes that the stock market is displaying more positives than negatives, such as inflation remaining steady.
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