The global unemployment rate is estimated to be 4.9%, which is the lowest level in nearly 35 years.1
US corporate earnings have remained remarkably strong in 2025, defying earlier expectations of a slowdown.
The Federal Reserve (Fed) resumed its easing cycle this year, and we anticipate more rate cuts in 2026.
In honor of Thanksgiving and the year-end holiday season, we take time this week to reflect on what we’re thankful for. Let’s turn down the volume of our fear-inducing 24-hour news cycle and instead focus on some good news.
Here are 10 things that investors can be thankful for this year.
Since 2025 has generated a lot of negative news, one might assume that economic growth was awful. That’s not the case. The global unemployment rate is estimated to be 4.9%, which is the lowest level in nearly 35 years.1
The US was no longer the “only game in town” as non-US stock markets posted strong gains. International stocks outperformed, with the MSCI All Country World (ACWI) ex USA rising sharply,2 thanks to supportive fiscal policies in Europe and Asia and proactive monetary easing.
US corporate earnings have remained remarkably strong in 2025, defying earlier expectations of a slowdown. Across multiple quarters, more than 80% of S&P 500 companies beat both earnings and revenue forecasts, with year-over-year growth exceeding 11%.3 The Japanese have even more to be thankful for — earnings growth this year has been even stronger.4
It may sound counterintuitive, but we’re thankful for increased defense spending in Europe. Bear with us. Greater defense investment tends to have a positive multiplier effect on economic activity and can spur innovation, like how the US military-industrial complex has historically driven technological advancements. At the same time, the artificial intelligence (AI) sector is innovating at an extraordinary pace, and the significant spending on data centers in the US is another positive driver of growth.
Despite concerns over tariffs and questions about Fed independence, US inflation expectations remain well-anchored near the Fed’s target.5 This stability provides the Fed with cover to begin lowering interest rates in 2026 if warranted.
The Fed resumed its rate-cutting cycle in 2025. The path of its interest rate cuts remains uncertain, but with inflation expectations contained6 and payroll growth moderating,7 we anticipate additional rate reductions in 2026. Lower policy rates combined with potentially improving growth are conditions that stocks will likely welcome.
Germany and Japan are leading efforts to expand fiscal policy in the year ahead. For Germany, this represents a notable shift from its traditional stance, and we expect it will support domestic demand and encourage private-sector capital investment. Meanwhile, Japan’s new Prime Minister, Sanae Takaichi, recently announced a 21.3 trillion yen ($135.5 billion) fiscal stimulus package.8 While bondholders may be less enthusiastic about this development, stock investors are likely to welcome the news.
While concerns about stock valuations often focus on the S&P 500, they don’t reflect the broader opportunity set. US mid- and small-cap stocks, value segments, and non-US markets have been trading at more attractive levels,9 offering investors a chance to build portfolios with better valuation profiles. This diversification can help position investors for long-term growth potential while mitigating concentration risk.
After the longest shutdown in US history, the government has reopened, and federal employees are receiving back pay. We’re thankful these workers can enjoy Thanksgiving, and especially grateful that airport staff will enable Americans to travel and spend time with their families. Notably, for the 13th time out of the 22 shutdowns since 1976, the US stock market posted positive returns during the shutdown period.10
By almost every measure — health, wealth, and opportunity — today is better for more people than at any point in history. Global life expectancy has risen dramatically,11 extreme poverty has fallen to record lows,12 and technological progress has expanded access to education, health care, and information worldwide. While challenges remain, the long-term trend is one of unprecedented improvements in living standards and human well-being.
On a more personal level, we’re thankful to our wonderful clients, partners, and colleagues who make navigating markets interesting and fun.
Thank you!
We believe global equities may continue to rise in the new year, and we expect new opportunities to be unlocked as market leadership evolves.
Get insight on the recent sell-off in the artificial intelligence trade, the potential for a Santa Claus rally, and the K-shaped economy.
The downturn was concentrated in mega-cap growth stocks, even though many had strong earnings. We see it as skepticism about lofty valuations.
Important information
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Image: BONNINSTUDIO / Stocksy
All investing involves risk, including the risk of loss.
Past performance does not guarantee future results.
Investments cannot be made directly in an index.
This does not constitute a recommendation of any investment strategy or product for a particular investor. Investors should consult a financial professional before making any investment decisions.
AI technology companies are sensitive to specific risks such as small markets, business cycle changes, economic growth, technological progress, obsolescence, and regulation. These companies may have limited products, markets, resources, or personnel, making their securities more volatile, especially for smaller start-ups. Rapid technological changes can adversely affect their results. AI companies often rely on patents, copyrights, trademarks, and trade secrets to protect their technology, but there is no guarantee these protections will be sufficient. Significant research and development (R&D) spending doesn’t ensure product or service success.
The performance of an investment concentrated in issuers of a certain region or country, such as North America and Europe, is expected to be closely tied to conditions within that region and to be more volatile than more geographically diversified investments.
Diversification does not guarantee a profit or eliminate the risk of loss.
Fiscal stimulus is government actions aimed at boosting economic activity, typically through increased spending or reduced taxes.
The health care industry is subject to risks relating to government regulation, obsolescence caused by scientific advances, and technological innovations.
Inflation is the rate at which the general price level for goods and services is increasing.
The risks of investing in securities of foreign issuers, including emerging market issuers, can include fluctuations in foreign currencies, political and economic instability, and foreign taxation issues.
Monetary easing refers to the lowering of interest rates and deposit ratios by central banks.
The MSCI All Country World (ACWI) ex USA Index is an unmanaged index considered representative of large- and mid-cap stocks across developed and emerging markets, excluding the US. The index is computed using the net return, which withholds applicable taxes for nonresident investors.
The MSCI Emerging Markets Index captures large- and mid-cap representation in emerging market (EM) countries.
The MSCI Europe Index captures large- and mid-cap representation across a universe of developed market countries in Europe.
The multiplier effect measures how much a change in fiscal policy affects income levels in the country due to the new policy’s effect on spending, consumption, and investment levels in the economy.
A policy rate is the rate used by central banks to implement or signal their monetary policy stance.
The price-to-earnings (P/E) ratio measures a stock’s valuation by dividing its share price by its earnings per share.
The risks of investing in securities of foreign issuers can include fluctuations in foreign currencies, political and economic instability, and foreign taxation issues.
The S&P 500® Index is an unmanaged index considered representative of the US stock market.
The S&P 500® Value Index consists of stocks in the S&P 500® Index that exhibit strong value characteristics based on three measures: Book value-to-price, earnings-to-price, and sales-to-price.
The S&P MidCap 400® Index is an unmanaged index considered representative of mid-sized US companies.
The S&P SmallCap 600® Index is a market-value-weighted index that consists of 600 small-cap US stocks chosen for market size, liquidity, and industry group representation.
Stocks of small- and mid-sized companies tend to be more vulnerable to adverse developments, may be more volatile, and may be illiquid or restricted as to resale.
In general, stock values fluctuate, sometimes widely, in response to activities specific to the company as well as general market, economic, and political conditions.
Treasury Inflation-Protected Securities (TIPS) are US Treasury securities that are indexed to inflation.
A value style of investing is subject to the risk that the valuations never improve or that the returns will trail other styles of investing or the overall stock market.
The opinions referenced above are those of the author as of Nov. 24, 2025. These comments should not be construed as recommendations, but as an illustration of broader themes. Forward-looking statements are not guarantees of future results. They involve risks, uncertainties, and assumptions; there can be no assurance that actual results will not differ materially from expectations.
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