Smart Beta

The stock market doesn’t wait for GDP. The ratio of consumer discretionary stocks to consumer staples has fallen about 19% from its late-2025 peak, suggesting the so-called “smart money” has been quietly moving out of what people want and into what people need for most of this year.⁵

Credit problems in the AI space are not going to be contained to just the AI space. It is going to have impacts all throughout the economy and global markets. I guarantee you central banks are paying attention as it is affecting what they have to charge for sovereign debt.

Despite the fact that digital tools such as AI advisors are becoming increasingly available, investors are still seeking out human financial advisors.

Rising U.S. Treasury yields have added fresh strain to the U.S. housing market. The average 30-year mortgage rate, which generally tracks the 10-year U.S. Treasury yield plus a mortgage spread, rose to 7.5% in October 2026, according to Mortgage Bankers Association data, worsening an affordability crunch that remains a top concern among U.S. households.

Starting December 6, 2026, Nasdaq and NYSE Arca will officially launch extended trading sessions, expanding U.S. stock trading to up to 23 hours a day, five days a week.

In today’s modern financial landscape, market-capitalization-weighted indices dominate the investment ecosystem with trillions of dollars tracking broad market indices such as the S&P 500 and the Russell 1000. However, a research article by RAFI Indices™, adapted from the CFA Institute Research Foundation series The Active Side of Indexing, exposes flaws within cap-weighted benchmarks.

Large-cap stocks may be better built for 5% Treasury yields than their smaller rivals, according to State Street Investment Management’s quarterly outlook. The 10-year yield climbed 0.81 percentage points last quarter to 5.28%, a near 20-year high.

The strength of the US economy during the third quarter was hardly a surprise. We expected economic growth of 3.5%, and the first estimate came in only slightly below that at a 3.4% quarter-over-quarter, seasonally adjusted annualized rate. Consumer spending and investment tied to the AI and data center buildout remained the primary drivers of growth.

Infrastructure has long been valued for its defensive characteristics, income potential and ability to protect against inflation. Essential assets such as electricity networks, pipelines, railways, airports and toll roads typically benefit from high barriers to entry and predictable revenues.

The Fed held rates steady at its October meeting but kept the door open to further tightening, with two dissenting votes and hawkish rhetoric signaling that the pause is a skip, not a stop.

In this episode of the Money Metals Midweek Memo, host Mike Maharrey considers how artificial intelligence could affect trust, cybersecurity, and investors’ access to their money. He also discusses silver’s sharp correction, the long history of gold jewelry, and ways listeners might use precious metals as a physical store of value.

Consumer staples are behaving (in a good way) like their technology counterparts. It may be the latter that’s helping the former. There are currently renewed fears about AI bubbles and hefty spending by hyperscalers. So some investors are trimming tech exposure and heading to more docile pastures, including staples.

The economy appears to be settling into a new equilibrium. Economic growth has moderated to a sustainable pace. While inflation has picked up over the last few months, there does not seem to be a fundamental shift in the underlying trend.

The new SPYM ETF mutual fund share class, SPYMX, may yet pick up some strong new flows with its appeal to institutional investors.

Investors often treat growth and dividends as opposing camps, but in practice, this means the two can complement each other.

Advisor Perspectives is launching a new website in January 2027. Learn what’s changing, and what to expect from the updated experience.

The AI investment boom has become one of the largest sources of demand in the U.S. economy. Announced annual capital spending across large U.S. technology companies points to more than $1 trillion in desired investment, up dramatically from only a few years ago.

The Federal Open Market Committee (FOMC) decided to keep rates unchanged, maintaining the fed funds trading range at 3.75% to 4.00%. After some early back and forth on the chances for a rate hike at this gathering, this result was largely expected. In fact, fed funds futures were pricing in more than a 90% chance that the fed funds target would remain unchanged.

Franklin Templeton plans to launch two ETFs Thursday that use stock dividends to buy bitcoin instead of more shares.

Royce Investment Partners: Co-CIO Francis Gannon details why recent volatility looks like the typical pattern of a US small-cap leadership cycle.

Investors may be overlooking one of the most established drivers of long-term wealth creation: dividend yield. In his October insight, Richard Bernstein, Global Head of Macro & Customized Investing, examines the broad availability of dividend opportunities, how income-focused stocks have performed relative to growth stocks, and why dividend yield may help investors balance portfolios increasingly geared toward capital gains and higher risk.

After overshooting projections for years, AI capex is slowing down. The shift doesn’t spell the end of the AI trade but a move to a more mature, predictable cycle that favors higher-quality borrowers.

New charitable deduction rules may affect year-end giving strategies. Bill Cass examines the changes for 2026 and considerations for taxpayers looking to align charitable goals with tax planning.

Milton Friedman famously said, “inflation is always and everywhere a monetary phenomenon,” emphasizing that sustained inflation occurs when money expands persistently faster than real output.

The Federal Reserve decided to wait for more data rather than raise rates at its October meeting. Two policymakers dissented, favoring a rate hike of a quarter percentage point.

Could the near to medium term finally see value ETFs take the starring role back from growth? Value indices have provided some steady returns this year, but the question is, can they accelerate into the new year? Economic headwinds and concentration risk for the AI hyperscalers could see value stocks outperform. The American Century U.S. Quality Value ETF (VALQ) presents a strong candidate to do well if value stocks do.

How many eyeball-grabbing headlines can we stuff into the next few weeks? For tech investors, AI concerns mount, with rising credit default swap prices among the hyperscalers and sagging neocloud equities.

With the recent movements in both the stock and bond markets, there was some noteworthy news that got kind of lost. Indeed, the U.S. government posted a $1.99 trillion budget deficit for fiscal year (FY) 2026. While technically it is not a record amount of red-ink, it represented the largest non-COVID-related shortfall ever recorded in modern history.

The credit market had become more discerning. Companies with greater leverage, more uncertain cash flows, or business models requiring enormous amounts of capital appeared to be more scrutinized.

LPL Research examines three keys to earnings season: broader profit growth, margin pressures, and high expectations amid continued AI investment.

Gold has traditionally been one of the most popular ways for investors to gain commodity exposure, but its recent weakness highlights the differences across various commodities. While precious metals have struggled, energy and certain agricultural commodities have seen stronger returns. Existing diversified strategies are also giving investors more ways to access commodities beyond traditional gold funds.

Founded in 2019 with backing from Japanese investment holding company SoftBank, SB Energy began as a U.S.-based utility-scale renewable energy developer. Today, SB Energy has three lines of business—power, data centers, and solutions.

Reasonable minds can disagree about the ideal scope of government, but no one argues against nations providing for their defense. As conflicts emerge and tensions rise, defense spending will take a larger role in all nations’ budgets, with effects that will flow across the economy.

Income ETF strategies have exploded in popularity in recent years. Historically, investors have looked to bond coupons to add durability to their portfolios. The explosion of ETF popularity, launches, and adoption, however, has seen some intriguing options join the fray. The Goldman Sachs Municipal Income ETF (GMUB), which hits its three-year ETF milestone next year, represents just such a strategy.

Investors concerned about market turbulence don’t have to sacrifice return potential to reduce risk. Historically, short-duration high-yield bonds have delivered returns neck-and-neck with those of the broader high-yield market but with substantially less volatility. The recent rise in yields makes today an especially compelling entry point.

Economic data that continued to show a strong U.S. economy, housing aside, took a back seat this week as investors once again focused on potential risks to future growth: rising energy prices, sticky inflation, and most importantly, questions about the sustainability of the artificial intelligence (AI) boom.

The human brain has a remarkable ability to adjust what it considers to be normal, oftentimes very quickly. Experiencing or achieving something that might have previously seemed like a long shot can quickly shift our mindset to expect that outcome over and over again. While yields have been very attractive for the past few years compared to the past several decades, we recently experienced a spike even higher across a range of fixed income products.

US midterm elections take place on Tuesday, November 3. Currently, the Republican party is in control of the House and the Senate. This vote will essentially be a referendum on the Republican party’s body of work. It’s likely the composition of either the House or the Senate will change.

Keynes’ influence is still very much alive. As one point of evidence, Robert Hall of Stanford University and Michael Woodford of Columbia University, champions of what is now known as “The New Keynesian Theory,” were recognized with this year’s Nobel Prize in Economics.

Higher yields do not automatically make longer-duration bonds attractive, as persistent inflation, resilient growth, and heavy debt issuance could maintain upward pressure on yields in the near term.

Geopolitical tensions are already driving demand for energy exposure through rising oil and gas prices. Combining this cyclical strength with long-term AI momentum creates a strong potential for noticeable returns.

Record ETF launches are compressing product shelf lives and raising closure risks. Learn the real costs for advisors and clients.

Ken Griffin told a room full of investors recently that we are “almost certainly” in an AI bubble. He may well be correct in that assessment, and there are plenty of media narratives that support that view.

Rick Polsinello, Christian Galipeau Discuss high-conviction insights that go beyond media headlines.

The Middle Eastern waters might be calm enough to allow for energy shipments to recover toward pre-war levels, but Asia-Pacific (APAC) economies are not yet in calm waters. Tight petroleum product supplies and higher shipping costs leave the region vulnerable to further shocks.

The next two weeks bring an unusually crowded lineup of potential market-moving catalysts, including a Federal Reserve (Fed) policy meeting, the busiest stretch of third-quarter 2026 earnings season, the Treasury’s Quarterly Refunding Announcement and the midterm elections.