The following is an excerpt from Zacks Chief Strategist John Blank’s full Nov Market Strategy report To access the full PDF, click here.

I. The U.S. Share Market Setup

A. For 2027 bulls: Annual U.S. EPS growth outlooks for the S&P500 stay firmly in double digits:

• +12.8% for 2025
• +29.2% for 2026
• +19.4% for 2027, and
• +16.4% for 2028

The peak looks to be 2026.

Zacks updated this data on Oct. 27th, 2026.

B. For 2027 bears: Stay wary of a hawkish FOMC and ECB.

Fed Chair Kevin Warsh began his run May 15th. Yet former Chair Jerome Powell has stayed on the FOMC Board of Governors, perhaps until 2028.

The FOMC rests at a 3.89% Fed Funds policy rate. The ECB in Europe moved up to a 2.25% main refi policy rate in June. A Mainland China People’s Bank 1-year loan policy rate rests at a 3.0% rate.

Major central banks (led by Australia and the ECB) are hiking policy rates now.

What of Sept. 16th, 2026 “dot plots”? U.S. hawks are in total control.

• The FOMC median 2026 Fed Fund rate rose 30 bps to 4.10%
• The Sept. 2026 regional bank outlooks heavily clustered at 4.10%

Monetary authority decisions get strenuously debated across 2027, and beyond, on both global and U.S. sides of the equation.

Next, an Oct. 27th, 2026 CME Fed Funds Future outlook, on U.S. policy rates:

• (74%) for 4.00%-4.25% at the end of December 2026 (1 25-bps hike), and
• (29%) for 4.50%-4.75% at the end of December 2027 or more (3 25-bps hikes)

Long-term U.S. Treasuries? The 10-year U.S. yield began to rise in March 2026. As of October 27th, 2026, it has risen to a 4.99% yield, falling back from a high of 5.32%.

A broad global long-term government bond yield lift accelerated, in the face of rising oil prices, driving up broad and core PCE inflation, worldwide.

Can richly-priced 2026 U.S. share valuations stay intact, in the face of unprecedented global oil, gasoline, diesel, and related product supply shocks?

• In October 2026 Consensus Economics data, a +2.7% CPI seen in 2025 lifted to +3.4% in 2026. In 2027, it falls to +2.5%. That’s the current energy shock set-up. 
• A Consensus +2.3% U.S. real GDP growth in 2025 remains at +2.3% in 2026. In 2027? GDP growth is pegged at +2.2%.

C. On top of that…

Mid-term U.S. elections, dominated by Democrats, are the 2027 wild card.

Mag 7, SpaceX, Anthropic, and AI-chip U.S. share valuations create 1999-era concentration risks, with broad AI cash flow depletion fears.

In November 2026, S&P500 traders’ fully price-in aggressive full-year 2027 and 2028 earnings estimates, particularly on concentrated large-cap stock indices.

D. Valuation data on October 27th, 2026 from Zacks Research Systems (ZRS)

• The S&P500 LargeCap at a 21.5 P/E for ’26, 18.7 for ’27, and 16.2 for ’28
• The S&P400 MidCap at a 17.2 P/E for ’26, 15.0 for ’27, and 13.3 for ‘28
• The S&P600 SmallCap at a 16.2 P/E for ’26, 14.0 for ’27, and 13.3 for ‘28

Large caps at a 21.5 F12M P/E ratio for 2026 are supported by an aggressive mega-cap tech stock led valuation expansion, and aggressive, manufactured earnings growth.

Spurious EPS growth conditions, hailing from the hyperscaler’s cap-ex commitments, and the pricing strength of an AI chip oligopoly, and richly marketed pre- and post-IPO holdings support the large-cap narrative.

What about the mid-cap S&P400 index? 

• The mid-cap S&P400 comes in at 17.2 in 2026
• The mid cap’s index value could look rich, if a multiple compression, hits broadly

The small-cap S&P600 index remains cheaper, but likely a value trap:

• The S&P600 has a 16.2 P/E ratio using model ’26 earnings
• The same worry with mid-caps applies

AI-related optical networking stocks drove the small-cap rally this year.
 

II. The Zacks November 2026 Sector/Industry/Company Telescope

Oct. 30th, 2026 data show Info Tech, Energy & Industrials remained Very Attractive. Earnings estimates continue to rise, in these linked AI spaces.

Communication Services stayed Attractive.

Financials stayed Market Weight. Utilities rose to Market Weight.

Materials stayed Unattractive. Health Care fell to Unattractive.

Consumer Staples and Consumer Discretionary are at the end of the train, at Very Unattractive.

(1) Info Tech stayed Very Attractive. Misc. Tech., Electronics & Semis led, again.

Zacks #1 Rank (STRONG BUY): Tokyo Electron (TELWY)

(2) Energy stayed Very Attractive. Oil-Integrated, Oil Misc. and Oil & Gas E&P led.

Zacks #1 Rank (STRONG BUY): Petroleo Brazileiro (PBR Quick QuotePBR - Free Report) )

(3) Industrials stayed Very Attractive. Conglomerates, Machinery-Electrical, and Transport looked best.

Zacks #1 Rank (STRONG BUY): Corning (GLW Quick QuoteGLW - Free Report)

(4) Communications Services fell to Attractive from Very Attractive. Telco Equipment remained strong.

(5) Financials stayed at Market Weight. Insurance, Banks & Thrifts, & Banks-Major led.

(6) Utilities rose to Market Weight from Very Unattractive. Utility-Water Supply led.

(7) Health Care fell to Unattractive from Attractive. Medical Care led, again.

(8) Materials stayed Unattractive. Steel led.

(9) Consumer Staples Very Unattractive from Market Weight. Soaps & Cosmetics led.

(10) Consumer Discretionary fell to Very Unattractive from Market Weight. Consumer Electronics bucked the trend and looked great. Xmas season!
 

III. One Big Conclusion

This remains an AI driven stock market, until those Very Attractive Zacks sectors fall.

That’s it for me.

Enjoy the rest of my Zacks NOV 2026 market strategy report.

Warm Regards,

John Blank, PhD.
Zacks Chief Equity Strategist and Economist.