The Number One Question Facing Investors, How the US Became Recession Proof, Why Tech Stocks Might Underperform Going Forward With Datatrek’s Nick Colas and Jessica Rabe

July 13, 2026

AI Summary

5 min read

The U.S. economy has been in recession for just over two months in the last 16 years—the pandemic period—compared to 13–14% of the time in the prior 15-year windows. That is not normal. Nick Colas, co-founder of DataTrek Research, argues that this structural shift is the single most underappreciated fact in markets today, and it directly determines the biggest question facing investors: how much longer will the market reward the hyperscalers for their AI capex spending before turning skeptical?

Why the U.S. Economy Became Recession-Resistant

Colas walks through six structural changes that have made the U.S. economy far less prone to the classic boom-bust cycle. First, the economy is now services-based rather than manufacturing-heavy. Services are inherently less cyclical—people still need healthcare and haircuts even when growth slows. Second, the economy is far less energy-intensive, meaning oil shocks no longer trigger the kind of cascading industrial collapse they once did. Colas recalls covering auto suppliers in the early 1990s, when an oil spike could send initial jobless claims from 300,000 to 500,000 in weeks as dealers stopped ordering and factories laid off workers immediately. That mechanism is much weaker today.

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What you'll learn

1 (01:13) **The Biggest Question Facing Investors** - The hosts frame the central thesis: how much longer will investors tolerate massive CapEx spending from hyperscalers before turning negative, since that spending is the source of all earnings growth.
2 (03:00) **"This Time Is at Least a Little Bit Different"** - Nick presents the first slide, showing the US has been in recession only 1% of the time over the last 15 years (vs. ~13% in prior decades), despite numerous shocks.
3 (05:00) **Why the US Became Recession-Resistant** - Nick lists five structural reasons the economy has avoided downturns.
4 (10:45) **The Most Underappreciated Point: Better Management** - Josh argues that the improvement in corporate management quality is the most overlooked factor in economic stability.
5 (12:37) **Why This Matters for Markets** - A stable economy creates steady earnings, which supports high valuations (S&P at 20x earnings), low credit spreads, and a persistent "buy the dip" mentality.
6 (17:20) **Recession Resistant, Not Recession Proof** - Josh summarizes the idea: the economy is water-resistant, not waterproof; an unknown exogenous shock will eventually tip it over.
7 (19:40) **Tech's Statistical Extremes and the Warning Signal** - Jessica updates a chart from their last appearance, showing tech outperformed the S&P by 29 percentage points over 50 days on June 2nd—a six-standard-deviation event.

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Show Notes

On this episode of What Did We Learn, ⁠Josh Brown⁠, ⁠Nick Colas and Jessica Rabe⁠ discuss whether Tech's leadership is finally cooling off, what history says about rare market extremes, the case for a rotation within mega-cap tech, why semis may have gotten ahead of themselves, and what the Nasdaq's fourth year of a bull market could mean for investors.

This episode is sponsored by Federated Hermes. Explore their full ETF lineup at ⁠https://federatedhermes.com/us

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