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Now that fall has finally arrived, it’s time for the October update. This month, we highlight how the S&P has performed during US government shutdowns, the AI spending boom, and changes in real estate.

Can a Government Shutdown Derail Your Investments from Hartford Funds – Hartford highlights that the S&P has held up well during the last 10 government shutdowns since 1976. The S&P has gained 3.68% on average over the last 4 shutdowns. The S&P gained 10.3% during the longest 34-day shutdown from December 2018 to January 2019. The S&P is up 3.2% since the start of this 29-day and counting shutdown.

Spending on AI Is at Epic Levels. Will It Ever Pay Off? from Wall Street Journal – The authors document the staggering amount of AI investments to date and scheduled, and the significant industry revenue growth and productivity gains required to justify investment levels. A brief history of UK railroads and US.com investment bubbles is also provided.

The AI capex endgame is approaching from Financial Times - The Op Ed author argues AI spending is growing rapidly, and it has reached bubble territory. He believes this massive cap x spend should ensure AI adoption. Increased regulation, competition and/or slowing growth in customer demand should cause the bubble to burst, however. Today’s late AI equity and debt investors may experience investment losses similar to those of .com bubble investors.

A Shrinking Housing Market Means Upheaval for Buyers from Barron's – The housing market downturn is causing industry players to increasingly consolidate in hopes of gaining share and/or becoming a consumer one-stop shop.

Note, I am presenting on Tuesday, November 18th at 6 pm CST to the Austin/San Antonio and New York Chapters of the American Association of Individual Investors (AAII) on “What to Know About Equities”. I will be addressing items such as:

• What are the characteristics (frequency, duration, average loss) of stock bear markets?

•  What are current indicators telling us about the likelihood of a near-term recession?

• Does history provide valuable clues on the intermediate-term stock return outlook?

• Does US large-cap stock concentration represent a risk or an opportunity?

• Where are there relative opportunities: international, value, small cap, quality, low volatility, momentum and/or sectors? 

To register for this Zoom presentation: https://us02web.zoom.us/webinar/register/WN_1GaTZW3FTrWo1pRs58C4iA

If you can’t make the presentation and you would like a copy of it, just let me know.

Sincerely,
Bill Hawes, CFA, CFP
President and Chief Investment Officer
Candor Asset Advisors
 
O: 512 522-8501
C: 512 470-6106
Alt: 737 265-3782
bhawes@candorassetadvisors.com
www.candorassetadvisors.com
to schedule a conversation: https://calendly.com/bhawes-1/brief_conversation


Disclosures
Investment advisory and financial planning services are offered through Candor Asset Advisors, LLC, a registered investment adviser. Consult your attorney, CPA, real estate agent, or insurance professional for advice in those areas. Links to third-party articles are for informational/marketing purposes only.