Ten reasons for investors to be thankful this Thanksgiving

It’s the time of year 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’s my list of 10 things that investors can be thankful for this year.

1. US economy has been strong

The 2023 recession calls were unfounded. Rather, the economy has been remarkably strong. The usual trappings of a recession, including significant corporate leverage³ and/or excess business⁴ or housing inventory,⁵ don’t appear evident.

2. US stock market is near an all-time high

The S&P 500 Index has hit 57 new highs in 2024, as of mid-November.¹ Valuations on the broad index are elevated, but much of that’s concentrated in the top names.⁶ For context, the price-to-earnings ratio of the S&P 500 Equal Weight Index is in line with its historical average.⁷

3. Wage growth is outpacing inflation

Inflation has cooled,⁸ but wages have continued to climb,⁹ with the greatest gains in lower-income households.¹⁰ Wages have been outpacing inflation for more than two years now.¹¹

4. Household net worth is at an all-time high

Wages are up.¹¹ The stock market is near an all-time high.¹² Home prices are up more than 50% since the eve of the pandemic.¹² It’s no surprise then that US household net worth is at an all-time high of $154 trillion.¹³

5. Federal Reserve is lowering interest rates

The easing cycle has commenced. The adage tells investors, “Don’t fight the Fed.”

6. US is producing more oil than any country ever

Wars are waging in two oil-producing regions of the world, and yet oil and gasoline prices remain relatively low.¹⁴ That’s because the US is currently producing roughly 13.5 million barrels of oil per day.¹⁵

7. US corporate earnings are strong

S&P 500 Index corporate earnings have doubled since the pandemic-driven low of 2020.¹⁶ The US remains a driver of the world’s innovations and advancements.

8. There’s income in fixed income

Investors used to dream of generating 4% in their income investments. Currently, 4% yields or are available across many income-generating assets, including US Treasuries, US corporate bonds, and US municipal bonds.²

9. US election is over

The US election has passed without significant incident. The much-anticipated period of uncertainty and/or unrest following the election didn't occur. A peaceful transfer of power will commence in January 2025.

10. These are the “good old days”

Now is indeed one of the best times to be alive. Advances in medicine, vaccines, and health care have significantly improved our quality of life. We have unprecedented access to information, communication, and technology. Global poverty rates have decreased, and wealth is more widely distributed than ever before. There have been significant advancements in human rights, gender equality, and social justice.

To drive home the point of today being the “good old days,” I’ll admit that artificial intelligence wrote the prior paragraph.

None of this is intended to sugarcoat anything that the world is facing. Nonetheless, let’s look ahead with optimism, knowing that every American generation has faced its share of challenges and has come back stronger. Over time, markets will reflect whether conditions are getting better or worse. History teaches us that conditions tend to improve over time, even if the path isn’t always straight. It’s why the market, as represented by the S&P 500 Index, has hit a new high every 16 days since 1957 and is only a stone’s throw away from a new high.¹⁷

Happy Thanksgiving. Be safe and be well.