Market Insights

In 1965, Gordon Moore predicted that the number of transistors on a microchip would double approximately every two years. To date, his prediction has proven reliable, allowing technology firms to innovate in unimaginable ways. Likewise, investing possesses its own doubling rule, called the rule of 72. The rule estimates the number of years it takes for an investment to double by dividing 72 by the investment’s expected return.

Advances in computing, semiconductors, medicine, and energy have been key drivers of the current business cycle. Many of the world’s largest corporations are investing heavily in new technologies to unlock future profitability. These capital investments have not only fueled innovation but also supported the broader stock market and corporate earnings. It is working circularly throughout markets, where one company’s capital expense is another’s revenue.

The economy has grown significantly since the last time it experienced a recession. Household incomes and financial savings stand at all-time highs, underscoring the strength of the past few years. Even faced with formidable headwinds-including wars, inflation, bank failures, and trade tensions-this expansion has endured and, more recently, even accelerated. Upgrades to GDP, fueled by improved capital investment and consumer spending, have reinforced this resilience.