76report

November 27, 2025

Seven Things Investors Can Be Thankful for

Thanksgiving is here, and the holiday season is just around the corner. We hope everyone is able to slow down a bit this week and reconnect with the people who matter most.

This time of year always reminds us how grateful we are for this community. Whether you’ve been with us from the very beginning or just joined recently, your support, engagement, and curiosity are what make 76research so rewarding for us.

In the spirit of the Thanksgiving holiday, we wanted to take a moment to look at the brighter side of the markets. During the past month, we saw a noticeable wave of risk aversion. Investors have questioned several of the key themes that have propelled markets higher this year.

That makes this a perfect moment to highlight Seven Things Investors Can Be Thankful For. Despite the recent volatility, we remain optimistic about the broader backdrop.

There are, as always, legitimate areas of concern. But it’s important not to allow ourselves to succumb to the loudest negative talking points. A worried market is often healthier than a complacent or euphoric one—because expectations stay tethered to reality.

The real trouble comes when expectations run far ahead of fundamentals, leaving investors exposed to future disappointment. Today’s environment, while choppy, remains anchored by strong secular trends that continue to unfold.

Our most important investments, of course, are the personal relationships that sustain, motivate, and inspire us. From our families to yours, we wish you a warm and joyful Thanksgiving.

Trish Regan and Rob Hordon

Co-Founders, 76research

The things of the body are good; the things of the intellect better; the best of all are the things of the soul; for, in the nation as in the individual, in the long run it is character that counts. - President Theodore Roosevelt, Thanksgiving Day, 1908

Seven things investors can be thankful for…

(1) This is an era of rapid technological advancement

In the late 1990s, the internet reshaped communication and commerce. In the 2000s, mobile computing put powerful computers in every pocket. In the 2010s, the cloud redefined how businesses stored data, built software, and scaled globally.

Each of those waves delivered strong market returns by unlocking productivity, enabling new business models, and driving sustained earnings growth. Today’s AI-driven transformation is unique because it layers all of those technologies together.

Breakthroughs in accelerated computing, robotics, automation, and advanced semiconductor design are not just improving how we interact with technology; they are rewiring the operational backbone of nearly every industry. The result is real revenue growth and margin expansion for companies that are either leading this shift or adapting to it.

As in prior innovation cycles, markets have historically rewarded structural progress. By almost any measure—capital spending, deployment, enterprise adoption—we are still in the early innings.

(2) The shutdown is over

Government shutdowns tend to be more disruptive than damaging. While they temporarily delay federal salaries and certain expenditures, the economic impact is usually modest—GDP softens during the pause and then rebounds once payments resume.

One of the more meaningful consequences this time was the freeze in official data: key releases on jobs, inflation, and spending were delayed, leaving the Fed without fresh numbers heading into critical policy discussions. That uncertainty filtered into markets, adding noise at a moment when investors were already cautious.

With the shutdown resolved, data collection resumes, visibility improves, and one of the quarter’s more distracting overhangs fades. Removing this uncertainty allows investors to refocus on earnings, growth dynamics, and the long-term themes that ultimately drive returns.

(3) Interest rates have room to fall

By historical standards, and according to many Fed officials, monetary policy remains restrictive. Even after 1.25% of rate cuts from the 2024 peak, interest rates are still set at a level meant to cool demand and restrain inflation. In effect, the Fed is still “tapping the brakes” on the economy

Fed Funds Rates

(Last Ten Years)

Part of the recent pressure on stocks and crypto has come from shifting expectations around the pace of future rate cuts. With some Fed officials making hawkish comments, investors have begun to fear that the Fed may move less aggressively than previously hoped.

But the underlying inflation picture has improved considerably.

Energy prices, a major driver of the Biden-era inflation surge, have softened substantially, with oil hovering near $60 per barrel. The stickiest components now come from shelter and services—areas that either move with long lags (housing) or respond slowly to tighter financial conditions (health care and other labor-intensive services).

Inflation continues to drift toward the Fed’s unofficial 2% target, with measures like the Personal Consumption Expenditures Index (PCE) steadily normalizing since the post-pandemic surge.

PCE Inflation Rate

(Last Five Years)

Many Fed officials spent much of the year warning that higher tariffs could stymie progress on inflation. But more than six months after implementation, the data show minimal, mostly temporary effects.

Just last week, Fed Governor Christopher Waller—a top contender to replace Jerome Powell as Chair when his term ends in May 2026—noted that tariff-related inflation pressures appear small.

Inflation through September continued to show relatively small effects from tariffs and support the hypothesis that tariffs are having a one-off effect raising price levels in the U.S. and are not a persistent source of inflation…. Tariff effects have been smaller than many forecasters expected. - Fed Governor Christopher Waller (11/17/2025)

Given Trump’s public battles with Powell and his long-stated desire for lower rates, it is highly likely he selects a Chair who shares his outlook, whether it is Waller, Kevin Hassett (currently the Director of the National Economic Council), or someone else.

The Chair does not control policy outright, but historically the position carries enormous influence.

Meanwhile, the non-AI economy is showing real signs of strain: unemployment has edged higher, and rate-sensitive sectors—most notably housing—have weakened meaningfully. In our view, current data suggests that easier policy is not only possible but justified.

Should labor market conditions soften further, the Fed has ample room to cut rates. Investors should take some comfort in this.

(4) Valuations are reasonable

Amidst all the talk of a bubble, stock market valuations overall do not strike us as unreasonable, especially in the context of strong earnings growth expectations.

Mega-cap tech plays, which are delivering high AI-driven growth rates, continue to carry relatively high multiples. Whether or not these multiples are warranted in the case of each of these individual stocks can be debated.

Tesla (TSLA), for example, trades at approximately 193 times forward earnings and represents about 2% of the S&P 500. It is an outlier but illustrates how these highly represented companies can stretch the valuation metrics of the index.

The top 10 highest market cap stocks within the S&P 500 now represent about 40% of the index; all but one—Berkshire Hathaway (BRK), the tenth largest—are technology leaders.

But even with mega-cap tech stocks having such an outsized influence on the market-cap weighted S&P 500, forward earnings multiples for the index are only marginally higher than the 10-year average.

S&P 500 Forward P/E

(Last Ten Years)

We can almost completely eliminate the effect of the highly valued AI/tech plays by looking at the S&P 500 Equal Weight Index. This index applies an equal weighting to all 500 stocks and essentially reflects the average stock within the index.

S&P 500 Equal Weight Forward P/E

(Last Ten Years)

The forward P/E multiple of the Equal Weight index is squarely in average territory in the context of the past 10 years. So to the extent there is valuation risk in the market, it is arguably confined to a small number of fast-growing, highly valued tech names.

We do not believe there is an AI bubble, but even if there is, an investor can avoid this risk simply by avoiding the most highly valued AI plays. Alternatively, an ETF like the Invesco S&P 500 Equal Weight ETF (RSP) provides direct exposure to the equal weight index.

(5) Productivity and corporate profits are rising

One of the most encouraging trends in the economy is the clear improvement in productivity. Companies are becoming more efficient—helped by better technology, streamlined processes, and normalized supply chains.

ChatGPT, the first widely adopted generative AI model, may have launched only three years ago. Yet the productivity impact of generative AI is starting to show up in economic data.

Economists at the St. Louis Fed highlight that from 2015–2019, labor productivity grew 1.43% annually. From the fourth quarter of 2022—when ChatGPT debuted—through the second quarter of 2025, productivity accelerated to 2.16% per year.

To test whether AI adoption was a driver or if this was just a coincidence, they compared productivity growth across industries. They found that sectors with higher levels of AI adoption experienced meaningfully faster improvement relative to their pre-pandemic trends.

Higher productivity is the essence of economic prosperity: it holds down inflation, lifts profit margins, and supports long-term growth. While automation may reduce labor demand and slow wage growth, a cooling labor market helps bring down inflation and gives the Fed more room to pivot toward easier monetary policy.

(6) The OBBB will kick in next year

The One Big Beautiful Bill (OBBB) is poised to deliver a significant economic boost starting in January. Its mix of tax relief, investment incentives, and targeted spending directly supports both consumers and businesses.

Middle-class tax cuts and enhanced family credits increase disposable income and reinforce household demand. Business provisions—expanded expensing, R&D incentives, energy and manufacturing credits—lower the cost of capital and encourage new investment in equipment, AI infrastructure, reshoring, and energy build-outs.

Housing and workforce measures, permitting reforms, and infrastructure spending expand supply and improve long-term productivity.

In contrast to the end-of-year slowdown caused by reduced government spending and the temporary shutdown, the OBBB is likely to catalyze a meaningful uptick in private sector activity as 2026 begins.

(7) Geopolitics are stabilizing

Geopolitical shocks were a major contributor to the inflation and disruption that hindered stock market performance in 2022 and 2023. Today the backdrop looks considerably calmer. Energy prices have stabilized, trade routes are open, and supply-chain friction has eased materially.

Tariffs generated a brief market scare in April and remain a source of uncertainty. But the broader geopolitical picture has markedly improved.

Iran appears neutralized as a regional military threat. The Israel–Hamas conflict has largely wound down. Russia and Ukraine are reportedly in advanced negotiations toward a peace deal.

The defining geopolitical relationship of our era remains the one between the United States and China. Despite deep economic interdependence, strategic tensions—especially around Taiwan—are real.

Recent diplomatic engagement has been productive, however. In late October, the two countries reached a trade agreement that secured U.S. access to rare earth minerals in exchange for tariff reductions and other concessions.

The year ahead

For much of November, markets have been preoccupied with downside risks. But the broader investment environment remains fundamentally strong.

Technology continues to advance rapidly and deliver measurable productivity gains. Monetary policy is turning more supportive as inflation cools. Pro-growth legislation is weeks away from taking effect. And the global landscape is far more stable than it was a year ago.

None of this guarantees a smooth path forward, but it does provide a basis for optimism. As we enter the holiday season, we are grateful for your trust and partnership—and we look forward to navigating the opportunities ahead together.

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