Strong Earnings and Cheaper Turkey: Why This Thanksgiving Looks Good for Investors

I want to discuss what we always do at this time of year, which is the American Farm Bureau’s Thanksgiving Dinner Price Index. But first, I want to talk a little bit about earnings, the outlook and the backdrop for the current market, because we’ve faced a little bit of choppiness in the recent markets. Volatility has returned, but it’s really driven by sentiment and rotation within the market. The earnings picture is really quite supportive of higher stock prices.

If you look at the four-year period that we’re currently in, including 2024 and the current year 2025, which we’re about to complete, plus the outlook for 2026 and 2027, we’re in a four-year period where we’ve got consecutive double-digit earnings growth for all four years. We’ve not seen that in the S&P 500, with the exception perhaps of a year or two when we’ve been recovering or coming out of recession and getting back to baseline. It’s a very strong earnings outlook for the remainder of the year. Take that into context with the current interest rate environment and the current inflation environment, and I think it’s pretty supportive of stock prices here.

From an inflation perspective. Headline CPI for the fourth quarter is around 2.9%. The 40-year average is 2.81, meaning we’re really in the ballpark of historic averages. From an interest rate perspective, the current interest rate on the U.S. 10-year Treasury is 4.06 this morning versus a 40-year average of 4.74; overall, below average there. If we went back even further into the early eighties and the seventies, that average would even be meaningfully higher. Overall, a pretty good backdrop for stock prices here.

Transitioning the inflation outlook to turkeys, well, turkeys are down 16% in terms of prices this year, not in terms of pounds. The American Farm Bureau Federation’s annual Thanksgiving Dinner Price Index is favorable this year. The average price of your Thanksgiving dinner for 10 people is going to be down about 5% from last year, driven, as I mentioned, by lower turkey prices, which are 16% below where they were last year.

What else is favorable on the price index? Dinner rolls are down 14.5%, and stuffing is down 9%, so don’t hold back on the carbs this year. Meanwhile, the veggie category is not particularly favorable. We’re seeing high prices with vegetables, carrots, and celery in particular. Just avoid them. Who needs carrots and celery, right? They’re up 61% this year. Sweet potatoes are up 37%. You’re already getting your starch from the bread, so you can pass on the sweet potatoes. And peas, skip them. They’re up 17% this year. 

The bottom line is, the earnings are up, the interest rate and inflation picture is somewhat benign, and your Thanksgiving Turkey dinner will be cheaper than it was last year. Overall, a pretty good outlook.

From our family at C.J. Lawrence, a division of Apollon Wealth, to yours, happy Thanksgiving.