Five for Friday

Consumer, Market, ChatGPT, Lucky Country, and On This Day

1. Spending

One of the biggest questions facing the U.S. economy entering 2026 is on the state of the consumer. The sentiment data is dour and there’s been enough labor market uncertainty to spur the Fed back into rate-cutting mode. But things are more nuanced than the headlines suggest, and this last week provided plenty of data to counter the doom and gloom narrative. Early holiday spending has looked strong so far (with positive updates from places like MasterCard, Adobe, Redbook, and the National Retail Federation), the global box office is booming, and Thanksgiving weekend travel set records. On the job front, despite plenty of genuine headwinds, initial claims for unemployment insurance remain right around historic post-pandemic lows. Things are far from perfect – the consumer is increasingly bifurcated across income level and asset ownership (i.e., investments and housing) – but things are not as dire as is often suggested either (and plenty of support is coming down the pike in 2026). In perhaps a reflection of this sentiment, an equally-weighted basket of Consumer Discretionary stocks (e.g., autos, leisure, apparel, retail, etc.) just had its best 5-day stretch since 2022.  

2. Momentum

Speaking of rallies, U.S. large-cap stocks closed November slightly higher, capping 7 straight months of gains. Since 1950, this has occurred 21 other times, and has more often than not portended good things for investors. Of the 21 instances, 18 saw the stock market higher one year later, and the average return across all occurrences is 12.3%. This doesn’t guarantee anything, of course, but it’s a good reminder that momentum is a powerful force in financial markets and strong returns tend to portend…well…strong returns. This is a bull market until proven otherwise, and both the strong performance in 2025 and the recent rebound off the November lows confirm that trend.  

3. AI

This week marked the three-year anniversary of ChatGPT’s public release, which unofficially kicked off the current AI-fueled bull market. To the right, we compare today’s rally to that of the late 1990s, with the Nasdaq 100 indexed to ChatGPT’s release and Netscape’s IPO (both rough proxies for a new technology’s “Sputnik moment”). The striking thing about the comparison, of course, is not the gains that have already accumulated – though a market that roughly doubles in three years is nothing to shake a stick at – but what might come next. While history’s bubbles all look different, a blowoff top (i.e., a quick, steep price move + a speculative fervor) is a commonality. Today’s bull market has been robust, but thus far has lacked the parabolic price action, euphoric sentiment, and FOMO buying that were apparent in 1998-2000. Said another way, if comparing today’s market to the 1990s boom, the truly “bubbly” stage has likely not yet begun.  

4. dot-AI

Of course, the other big winner from the ChatGPT revolution is the tiny island nation of Anguilla, who, as we have written about before, owns the “.ai” web domain. As the growth of registered “.ai” domains has boomed (from ~48,000 in 2018 to likely over a million today), so has the revenue into Anguilla’s coffers: per the Minister of Infrastructure and Communication, revenue from domain sales has gone from less than 1% of state income to nearly 50% this year. Wow!  

5. On this day

in 1848, President James K. Polk confirmed the discovery of gold in California in a message to Congress, and “with the President’s seeming endorsement, gold fever gripped the nation.” Interestingly, because the U.S. was on the gold standard, “the large gold discovery functioned like a monetary easing by a central bank,” with more gold chasing the same amount of goods and services, leading to inflation. Even more interestingly, because so many workers were tied up hunting flecks of gold, “laundry became so expensive that it was cheaper to ship dirty clothes to Hawaii for laundering.”  

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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.

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