Five for Friday – November 13, 2026

Crashes, Elections, Earnings, Capitalism, and Friday the 13th

1. Crash

With a bit of distance (and a nice rally since), last week’s market crash merits a closer look. Stocks went from one of their best days in a year to their worst just a day later, despite markets having priced in a Democratic sweep for months and initially showing little desire to abandon the AI trade. To me, that suggests something beyond fundamentals was at work. And as we speculated in our recap, the decline was likely amplified by at least some forced selling.

In such cases, market weakness can become a self-reinforcing downward spiral: as initial losses accumulate, some investors (often of the larger, institutional variety) must cut risk because they’ve borrowed money to invest, hit predetermined loss limits, or run strategies that automatically reduce exposure when volatility spikes. That selling pushes prices lower, inflicting losses on other investors and potentially forcing them to cut risk as well. And when many funds have similar exposure (i.e., “bullish AI”), one investor’s forced selling can quickly spur another’s. That dynamic is not new (see: Black Monday in 1987), but modern market structure may allow it to unfold faster: pod shops, systematic risk management, and leveraged ETFs create more mechanisms for selling to beget further selling.

This matters because when the mechanics of a selloff aren’t immediately obvious, analysts and the media are left reaching for more fundamental (and often scarier) explanations – is the AI trade profoundly broken, is a bubble popping, etc. – when sometimes the answer is that too many investors tried to get through the same door at once. Last week was a reminder that in moments of stress, market mechanics can temporarily overwhelm fundamentals, even if fundamentals reassert themselves once those pressures subside.

 2. Politics

The irony of the election-related volatility (a 4-day stretch that included 3 of the year’s biggest moves), is that if you’d fallen asleep on election night and woken up a week later, you’d find the stock market had moved less than 1%. Volatility is the price of long-term gains, but stocks are not partisan: political surprises can move markets in the moment, but don’t define where they ultimately go.

3. Profits

When asked why stocks have been so resilient this year despite the cavalcade of headwinds, I lean on the simplest answer – stocks are ownership shares in companies, and those companies have been insanely profitable of late. The S&P 500 is on track for its third straight quarter of 25%+ profit growth, and the overall earnings backdrop is as good as it’s been in a non-recession recovery this century. But in a concentrated market, is this a story of broad growth, or are AI winners lapping the field? The good news, per our partners at Baird Strategas, is that it seems to be the former: nearly 3 in 5 companies (and rising) are seeing double-digit earnings growth.

4. IPOs

Next week will bring the long-awaited IPO of Anthropic. And while the stats on IPO investing warrant caution, the event will be significant both as a gauge on investor sentiment for the AI trade and as a peek at the economics of a frontier AI model provider. But for now, I think it’s worth marveling at the economic system that can nurture an idea into one of the world’s few trillion-dollar companies in barely five years. As we’ve noted this year in celebration of America’s 250th birthday, no one does innovation meets capital like the U.S. Anthropic’s story gives me hope that the same structure that led the U.S. to being the best-performing global stock market since 1900 is still very much in place today.

5. Happy Friday the 13th

While some research suggests that superstition and anxiety result in lower spending on the day (particularly for things like flights), stocks have seen the opposite effect. Over the last 13 years (wink, wink), the S&P 500 has averaged a 0.44% gain on Friday the 13ths, nearly 10x higher than the 0.05% all-days average. 

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