U.S. Money Supply Has Made History Twice in the Last 3 Years -- Including a First Since the Great Depression -- and It Foreshadows a Wild Ride for Stocks in 2026

With little than 10 calendar days to spell earlier we ringing successful the caller year, it's looking promising that this volition beryllium different phenomenal twelvemonth for Wall Street and the semipermanent investors who've continued to spot the process. As of the closing doorbell connected Dec. 18, the iconic Dow Jones Industrial Average (DJINDICES: ^DJI), wide followed S&P 500 (SNPINDEX: ^GSPC), and innovation-driven Nasdaq Composite (NASDAQINDEX: ^IXIC) person rallied by 13%, 15%, and 19%, respectively.

Although investors are apt looking for the artificial quality (AI) revolution, quantum computing hype, and the Federal Reserve's rate-easing rhythm to substance further gains successful 2026, the caller twelvemonth whitethorn diagnostic a historical bout of volatility, based connected what 1 time-tested economical information constituent has to say.

Before digging immoderate further, it's due to notation that conscionable due to the fact that thing has happened successful the past, it's not guaranteed to hap successful the future. Nevertheless, correlated events often person a mode of repeating connected Wall Street (albeit not to a "t"), which tin assistance investors presumption themselves for aboriginal gains.

Few foundational metrics person a richer past than U.S. wealth supply. While determination are aggregate measures of wealth supply, the 2 that garner the astir attraction are M1 and M2. The erstwhile is simply a measurement of currency and coins successful circulation, arsenic good arsenic request deposits successful checking accounts. Think of it arsenic wealth that tin beryllium spent close now.

Meanwhile, M2 accounts for everything successful M1 and includes savings accounts, wealth marketplace accounts, and certificates of deposit beneath $100,000. It's inactive wealth that tin beryllium spent, but it requires much effort to get this superior into your hands. It's U.S. M2 wealth proviso that's been rewriting past since 2022.

Usually, the M2 wealth proviso illustration moves up and to the close with virtually nary interruption. In elemental terms, a increasing system needs much superior to facilitate transactions implicit time.

The station supra connected societal media level X (formerly Twitter), from Reventure App CEO Nick Gerli, is nearing its 3rd anniversary. However, it holds worth successful that it shows the year-over-year changes successful M2 dating backmost to 1870.