We will be back after the Thanksgiving weekend!

1. Wall Street forecasts for 2026 are starting to flood in and they’re pretty bullish.

Deutsche Bank strategists expect the S&P 500 to reach 8,000 by end-2026, an 18% gain from today, amid strong earnings and rising buybacks. Peers at JPMorgan see the benchmark hitting 7,500 points by the end of next year, implying an 11% rally, while SocGen has a target of 7,300.

But there is a big “IF”….

“if the Fed keeps cutting rates.”

2. The rally is broadening as US small-cap stocks had their best five days since May.

3. Small caps are indeed cheap.

4. Google is all about AI vertical integration.

The company still makes the bulk of its $385 billion in annual revenue from advertising.

At the same time, the company offers a level of AI vertical integration that even the other big tech companies can’t quite match. The recently launched Gemini 3 is a perfect example. Google trained its own frontier AI model on its own networks using its own TPU chips that it designed in-house.

That effectively makes Google into a combination of OpenAI and Microsoft with a bit of Nvidia thrown in. The strong performance of Gemini 3 on industry benchmarks may even be contributing to the more recent pressure on other AI stocks.

Last but not least, Google still powers 90% of the world’s internet searches. This gives the company unmatched distribution for its AI models.

5. The risk-reward setup for European stocks is compelling enough to counter skepticism over the region’s ability to meet growth expectations.

“It’s true that European equities have surrendered their lead over US peers in local currency terms.” Fund managers have cut their allocations to Europe to the lowest since January, according to Bank of America’s latest survey.

But UBS sees an attractive entry point for euro-area stocks.

“We believe this reversal in sentiment is misplaced,” they say.

The UBS Wealth team says the structural outlook for Europe is the strongest in 15 years, with brightening prospects for its reasonably priced economy-linked stocks. “So we think this is actually a good time for investors to consider increasing exposure to euro zone equities.”

UBS sees green shoots, with euro-area manufacturing PMIs exiting a long period of contraction for the first time since June 2022, a pattern that has historically preceded total returns of 18.6% on average over the next 12 months and 42% earnings growth over two years. Germany’s $500 billion stimulus, and the EU’s €800 billion defense initiative, are among tailwinds that should fuel a robust capex cycle.

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