Five for Friday – November 6, 2026

Rotation, The AI Election, Jobs, Seasons, and Football

1. Rotate

While the election has pulled all eyes to November, I’d be remiss not to touch on what was a fascinating and telling October. The S&P 500 was little changed by the time we crossed the finish line, but the rotation under the hood was as furious as we’ve seen in some time. In fact, the S&P 500 Equal Weight outperformed the S&P 500 by 5.8% in October – the second biggest month of outperformance since 1990. What’s the message? First, as noted by Baird Strategas’ Chris Verrone, “it suggests to us that money, while it might slosh around from group to group, is still reluctant to leave the asset class (of stocks).” That indicates most see enough growth ahead to keep money invested in risk assets. Second, it suggests that the market is confident in neither who the long-term AI winners are, nor in whether today’s AI economics even make sense over longer stretches. The latter point rings especially loudly in today’s period of high interest rates, a backdrop that fueled another stunning October rotational, in which High Quality outperformed High Momentum by the most since 2002. As money costs more and the cycle ages, fundamentals matter that much more.  

 2. AI

Speaking of the election, I roped my cohost Mike Antonelli into serving up a hot take: “At the peak, we were spending nearly 3% of GDP on building out AI in arguably the largest infrastructure boom in history, and it was sucking the oxygen out of everything else. Housing, consumer names and real estate were starved for investor interest and capital. The election likely changes that. Several Democrats ran on slowing data center expansion, which leaves room for other sectors to shine as capital spreads out. Housing names rallied sharply the day after. It also lowers the odds of a bubble. Elections rarely play out the way we expect. But this one might let the AI trade catch its breath, extending the bull market and pacing out its extraordinary growth.”  

3. Jobs

As loud as the din has been about a looming AI jobs-pocalypse, quite a few pieces of key labor market data are in a better place today than they were a year ago. Unemployment is down, job openings are up, the quits rate is rising, and the four-week moving average of initial claims for unemployment insurance is at a…2,976 week low (i.e., ~56 years). AI may ultimately be disruptive, but the predictions of widespread, near-term job loss overlook a major lesson of technological history: the labor market is extremely adaptive, and typically in very difficult-to-predict ways.  

4. Seasons

I’m never sure to what extent investors venerate trading maxims like “Sell in May and Go Away” (the seasonal strategy of selling stocks at the beginning of May and buying them back at the end of October), but I see enough written on it to suggest it is still in the zeitgeist. And while it is based on fact – the six months ending in October are historically the worst in the calendar year – it is far from a reliable timing tool. This October ended with the S&P 500 ~6% above where it began the “Sell in May” period, marking the 14th positive stretch in 15 years (with an average return of 7%). Seasonality can add useful context for investors, but markets rarely follow the calendar tightly enough to reliably exploit it.  

5. On this day

in 1869, Rutgers beat Princeton in the first American football game. I’d be shocked if any of those 25 helmet-less college players could have imagined that the very same sport would someday become a professional enterprise with $100+ billion media contracts, but that’s capitalism... economic value emerging in places few could have possibly foreseen.  

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