I’m seeing double here — four economies!

It’s not easy to make sense of the stock market right now, to say nothing of the highly agitated bond market and “little treat economy,” wherein consumers are spending big on hobbies and goodies since they can’t afford a house or a car.

We’ll talk about that later, but first let’s try to square a stock market that keeps hitting records while alarm bells are going off elsewhere in the economy. — Tony Wagner, newsletter editor

Markets giveth and markets taketh away.

Wednesday was a little more on the taketh side, but Tuesday the S&P 500 hit another record high. In fact, it’s had 27 of those this year. Artificial intelligence and tech have driven that growth. But what about everything else?

Let’s take out Nvidia, Microsoft, Amazon, and their ilk— we know they’re doing great; happy for them. How is everyone else?

“Not so great,” according to Matt Orton, chief market strategist at Raymond James Investment Management.

When the S&P 500 hit its latest record high Oct. 6, only 24 stocks hit highs for the year. Twenty-four out of 500.

“There’s a significant bifurcation between everything that’s tech and artificial intelligence versus everything else in the market,” Orton said.

It wasn’t this stark even a few months ago.

“All the good performance was weighted to the bottom companies, not to the [Magnificent] Seven, not to the AI names, but to these other guys who were kind of catching up,” said Matthew Paniati, a senior research analyst at Capital Advisors Group.

And then some things changed.

Parents starting their holiday shopping on Amazon this week could tell you that. It’s why smaller, more agile toy brands are doing ok this year while heavy hitters Mattel and Hasbro suffer double-digit stock market losses. Maybe they should be making more toys for grown-ups?

That was Treasury Secretary Scott Bessent’s brand during the early days of the second Trump administration, when the richest man alive was taking a chainsaw to bureaucracy and the president was slapping huge tariffs on American allies. 

Bessent has tamed some of Trump’s impulses and outlasted Elon Musk in the past year, and his purview has grown as a result. But a dishy, deeply reported story in the Wall Street Journal today portrays the Treasury as a high-pressure, short-fuse environment, with a leader who welcomes conflict as he falls short of his economic goals. Here’s a gift link.