The Weekly Update 11/07/2025™
In last weeks edition of The Weekly Update, I shared detail from Zacks Research on the Annual Revenue Growth and Annual Earnings Growth Rate for Corporate America as measured by the S&P 500 (Read it Here)
In round numbers the earnings (profits) of Corporate America are growing almost twice as fast as revenues. The data flow is pretty straight forward, its pointing to the efficiencies from technology and Artificial Intelligence, A.I., as the cause.
As I write this update on 11/5/2025, the Dow Jones Industrial Average (DJIA), closed at 47,311 and the NASDAQ at 23,499, and the past year, the earning for the big tech companies in the NASDAQ are growing two to three times faster that the DOW 30. If you believe all the “ bubble talk” in our news sources today, just wait a few years until the NASDAQ trades higher than the DJIA!
Possible!
And it is not just tech efficiencies driving this. It is people doing what U.S. citizens do best. They earn money, they pay taxes, they save and they spend. They will do this no matter what you see or hear in the news.
Here in the US, the economy has NEVER had 80.5 Million people (read: consumers of goods and services) who are 0 to 20 years old, stacked behind 88 million people who are 20 to 40 years old - and all collectively sitting under the umbrella of 78 Million people (Boomers) who collectively have accumulated more than $85 TRILLION in wealth, which they will now work very hard to spend over the next 40 years - all by themselves.
The consumer demand that lies ahead is generation stacked on generations, and it will not stop for at least the next forty years, because all of the millions of people will rent an apartment, then buy a house, get married, have children, get pets, travel, etc. etc.!
Yes, the economy and markets do separate from time to time for even a year or two at a time “but”, they “ALWAYS” [careful Jim] come back together. Just like now. Both the economy as measured by our Gross Domestic Product, GDP, all the goods and services we produce as a country and the valuations of Corporate America rest together near all-time highs.
The millions of people detailed above, are already born, this cannot and will not change. So, “maybe” a bubble for a short period in time, yet the trend, well it is a wealth trend for those who choose to get in front of it, I think! At TWSG we will position accordingly.
I did not say market valuations go straight up, and I did not say without volatility, yet the data flow suggests the good old USA has a very bright outlook. Think “Five Year Money” (Read it Here).
I’m interested in your thoughts, comments and observations. Feel welcome to call, email, or stop by the office and say Hi.
Respectfully,
James O. Lunney, CFP®
CERTIFIED FINANCIAL PLANNER™ Professional
*The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
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