5 Delightful Economic Facts Smart Investors Can Profit From in 2026

Yesterday, I published Part 1 of a multi-part mega update that investors need to know to navigate the complex, terrifying, and delightful world of 2026.  3 Shocking Facts Smart & Safe Investors Need To Know I showed how the stock market was actually as undervalued as the bear market lows of 2022 and 2025.  Source: FactSet, Morningstar I even showed how the red-hot Nasdaq (up almost 20% this year!) was just as undervalued, with Morningstar estimating a potential 24% upside in the next 12 months (justified by fundamentals).  And of course, PEGY analysis shows the upside potential to be around 40% to 50% (bear-market low undervaluation, remember 😉).  I showed how earnings growth was not just good, it was spectacular.  13.6% EPS Growth Is Now Official…Nothing Speculative Above This😉 Source: FactSet And I explained how we appear to be on track for the first double-digit growth streak in 20 years.  And even more impressive growth for the Nasdaq.  Not only is the Nasdaq apparently on track for (and big tech keeps beating expectations) 4 consecutive years of almost 20% growth (2X the historical rate), BUT next year cash flow growth is expected to reach 25%.  I showed how the preliminary 11% EPS growth estimates for the S&P in 2028, which would represent the first 5-year streak of double-digit earnings in stock market history, are actually realistic.  Because hyperscalers are growing FCF at 22% (23% to 24% per share)  So S&P growth converges onto their growth rates.  So now let me show you the fundamentals under the hood that allow such insane earnings growth, which is what drove 97% of stock market returns since 1871.  Delightful Fact 1: The Economy is Strong And Likely To Accelerate  There are several reliable real-time economic models that I turn to for tracking the economy. Source: Atlanta Fed The Atlanta Fed and blue-chip economists have been converging on Q3 growth (which would have been out at the end of October except for the Government shutdown) at 3% to 3.5%. Source: NY Fed On November 28th, the NY Fed closed the books on its Q3 estimates at 2.3%. Remember that number. Source: NY Fed Keep in mind Q4 began in October, and the government shutdown (which lasted a record 43 days) started October 1st, and reduced GDP growth by 0.25% per week according to the Congressional Budget Office. But once the government reopened and all backpay was paid, 95% of the damage was reversed. That explains why we saw a sharp decline that might be showing signs of recovery (it’s still Q4 after all). Source: NY Fed 2.3% growth in Q3, a small dip in Q4 due to the shutdown, and then a recovery to 2.2% in Q1 based on the preliminary estimates from the NY Fed. I like that we have the histogram showing the Atlanta Fed’s 3.5% Q4 growth estimate falls within the NY Fed's range. All of life is probability curves until there is a final decision/outcome that seals the outcome forever. It’s like quantum mechanics, everything is true until we record the final result, and lock in the single truth. Keep in mind, government statistics always have margins of error, too. The gold standard of economic analysis: Dallas Fed Weekly Economic Index Source: Dallas Fed Did you know that we can now measure daily payroll tax collection? And weekly steel, electricity, gasoline, consumption, and railroad traffic? Trucking volumes and daily consumer spending habits. These are the ultimate “first principles” ingredients of the economy. And thus why we can now safely ignore all the scary consumer or business sentiment surveys. Source: Dallas Fed Four straight weeks of 2.2% to 2.3% GDP growth indicate that the US economy is proving resilient to all the risks and headwinds, including the ongoing tariffs. -1.1% peak economic impact in May of 2026, according to the Yale Budget Lab. Dan