Five for Friday – September 11, 2026

Bull Markets, Joblessness, IPOs, Diversification, and Prices

1. Fives

At the risk of jinxing 2026's market gains before the year is even over, I wanted to look at 2027 through the lens of a simple question: What tends to happen after four consecutive up years? My gut reaction was that a fifth positive year in a row can’t be common, but history tells a different story. Over the last century and a half of U.S. stock market data, 37 calendar years followed a stretch of four up years – as far back as 1882 and as recently as 2018. And for those 37 occasions, the median return in year five is +16% (!) with a positive return 76% of the time (and when the fifth year was negative, the median was a minor -6% pullback). Bull runs tend to last longer than we might expect (today’s bull market still falls short of the average post-WWII bull market in length and magnitude). That can feel uneasy, but history suggests that strong past returns alone are a poor reason to get defensive.  

 2. Employment

Last week’s job report was a welcome surprise. Financial markets fell last week as the odds of near-term rate hikes rose, but a stable labor market tends to put an economic expansion and bull market on sturdier ground. More jobs were added in August (162,000) than in all of 2025 and weekly hours worked rose to a multi-year high. While the standard U-3 unemployment rate held steady, the U-6 unemployment rate ticked down to a one-year low. The U-6 combines unemployed workers with would-be workers that have given up looking for a job and part-time workers that want full-time work – making a falling U6 a positive sign for consumer spending/sentiment and broader economic growth.  

3. IPOs

This weekend marks three months since SpaceX went public in the largest initial public offering (IPO) in history. As of Thursday, the stock’s within a hair’s breadth of its June opening price. Ahead of the IPO, bulls pointed to enormous opportunity in the space economy, a tiny public float, and accelerated index inclusion; bears pointed to the lofty valuation, ongoing losses, and potential for a wave of insider selling. Then the shares spent three months going essentially nowhere. The loudest and most confident narratives often make an outcome seem obvious, but today the biggest takeaway might be that neither side was obviously right. As other major AI-adjacent companies ready the bankers for their own offerings, it’s worth remembering the cold, hard stats when it comes to IPOs to help us separate market noise from useful signal.  

4. Diversify

Amid bond market weakness and historic levels of stock market concentration, investors are unsurprisingly looking for more ways to diversify, from private market assets to precious metals. But we shouldn’t overlook the most obvious option at hand: different stocks. Per Evercore ISI, well over 100 stocks (a multi-decade high) in the S&P 500 have a negative beta (a fancy way of saying they tend to move opposite to the index). That list is decidedly non-AI, with heavy representation from Financials, Energy, and Utilities. Diversifying one’s portfolio is rarely exciting, particularly in a roaring bull market, but then, the goal of diversification isn’t excitement anyway…it's resilience.

5. 'Flations

It’s easy to notice the price of everyday items rising in periods of high inflation, but it’s just as easy to overlook areas where technological progress has dramatically lowered costs, especially ones not easily seen. For example, did you know that the cost of sequencing a full human genome fell from $95 million in 2001 to just $525 in 2022? Or that the cost of RAM storage fell from over $5 billion/terabyte in 1983 to just $1,088/TB in 2023? My takeaway isn’t that higher prices at the pump aren’t painful (they are), but that the inflation we notice isn't always bigger than the deflation that we don't.  

Disclosures

This is not a complete analysis of every material fact regarding any company, industry or security. The opinions expressed here reflect our judgment at this date and are subject to change. The information has been obtained from sources we consider to be reliable, but we cannot guarantee the accuracy. Market and economic statistics, unless otherwise cited, are from data provider FactSet.

This report does not provide recipients with information or advice that is sufficient on which to base an investment decision.  This report does not take into account the specific investment objectives, financial situation, or need of any particular client and may not be suitable for all types of investors. Recipients should not consider the contents of this report as a single factor in making an investment decision. Additional fundamental and other analyses would be required to make an investment decision about any individual security identified in this report.

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Past performance is not indicative of future results and diversification does not ensure a profit or protect against loss. All investments carry some level of risk, including loss of principal. An investment cannot be made directly in an index.

Copyright 2026 Robert W. Baird & Co. Incorporated.

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