💰 The Buildout Is On The Ballot

THE MAIN EVENTThe Buildout Is On The Ballot 🗳️

Tuesday is Election Day, and if history is any guide, your portfolio won't care who wins.

The S&P 500 has risen in the 12 months following every midterm election since 1954. The average gain is 17.2%, the strongest stretch of the four-year presidential cycle, according to LPL.

Normally, this is where I would tell you to vote, turn off the TV, and let history do its thing.

This year, I'm not so sure.

This Market Runs On One Engine ⚙️

America is leaning pretty hard on AI right now:

• Market weight: AI-adjacent companies make up more than half of the S&P 500.

• Market returns: AI stocks produced 75% of the S&P 500's gains in the first half of 2026.

• Economic growth: AI-related investment drove an estimated 39% of real GDP growth during the first nine months of 2025.

So AI isn't just propping up a few tech stocks. The money is working its way through the entire economy.

After all, AI spending doesn't disappear into a server rack. One company's scary AI spending bill is another company's revenue:

• Chipmakers sell more processors

• Utilities sell more power

• Turbine and transformer manufacturers sell more equipment

• Suppliers sell more steel, glass, fiber, cables, and cooling systems

• Construction crews build the facilities, and electricians wire them

• Plumbers, pipefitters, and HVAC technicians keep everything running

Everyone is watching how much money is going into AI. We should also pay attention to how many businesses are getting paid along the way.

Now The Golden Goose Is On The Ballot 🔌

At the same time, AI infrastructure has become a populist punching bag.

• Campaigns have spent more than $45 million on ads mentioning data centers this year.

• House Democrats are using AI and data centers as an attack line in nearly half of their key House races.

• New York has already paused permits for new hyperscale data centers.

The objection keeps changing. First it was water use. Then tax breaks. Now it's electricity bills.

The common thread is not hard to spot. AI will eventually make life better for everyone, but right now, it's creating wealth in the hands of a few.

We see the same anger in California's Prop 40. It would impose a one-time 5% tax on billionaire wealth, much of which was created by technology companies.

This isn't an AI law, per se. But it shows how quickly the wealth created by this boom can become a political target.

We Can't Afford To Get This Wrong 💸

Politics aside, America doesn't have much room to kneecap its best shot at faster growth.

The federal government ran an estimated $2 trillion deficit this year. Debt held by the public is already 101% of GDP and is projected to reach 120% by 2036, according to the CBO.

Without stronger economic and productivity growth, the other options are not especially fun:

• Higher taxes

• Lower government spending

• More inflation

More than likely, we'll get some combination of all three.

Growth alone may not fix the debt. But it can make every other part of the fix less painful.

Deliberately impeding our best shot at growing our way out of this mess would be an incredibly stupid act of economic self-sabotage.

Why I'm Not Selling 🧯

A Democratic Congress would still face President Trump's veto through January 2029.

And in my experience on Wall Street, plenty of investors actively root for divided government. Gridlock makes it harder for Washington to rewrite the rules, raise taxes, or get in the way of business.

But the veto only blocks federal legislation.

It can't stop state moratoriums, local permit fights, utility restrictions, or a 2028 presidential campaign built around the ills of AI.

So this isn't a call to sell. It is a warning that the political risk around the trade is growing.

History says Tuesday should be another speed bump, and stocks should keep moving higher.

I suspect history will be right about the next 12 months.

My concern is what comes after that, especially if America's golden goose becomes the villain of 2028.

MARKET MOODGoogle Drops Half A Trillion In A Day 📉

Winners

ADT

$ADT  ·  Cap $7.3B  ·  Week to date ▲ 43.0%
Josh Kushner's Thrive Holdings is buying the home-security company for $10 a share in cash, 46% above its price before the deal. That's a nice payday for a stock that had been stuck around $7, and ADT can still shop for a better offer until Nov. 28.

Carvana

$CVNA  ·  Cap $76.9B  ·  Week to date ▲ 18.2%
In 2022, investors feared Carvana would go bankrupt. Last quarter, the online car dealer sold a record 217,385 cars, up 39%. But starting with its next report, it's done giving Wall Street forecasts.

Eli Lilly

$LLY  ·  Cap $1.26T  ·  Week to date ▲ 7.9%
The GLP-1 boom isn't slowing down. Lilly's two blockbuster shots, Mounjaro and Zepbound, brought in more than $16 billion last quarter, and the stock hit a record high. Lilly also raised its sales forecast for the year by at least $5 billion.

Losers

ServiceNow

$NOW  ·  Cap $112.0B  ·  Week to date ▼ 31.0%
A weak forecast sank ServiceNow. Growth in the contracts it will bill over the next year may slow to 18.5% next quarter, down from 20.5%. That small step down revived the fear that AI will shrink demand for business software, and Salesforce and Workday fell too.

Sprouts Farmers Market

$SFM  ·  Cap $4.7B  ·  Week to date ▼ 27.6%
Sprouts' latest numbers weren't so healthy. Sales at stores open at least a year fell 0.9%, worse than the company's own forecast. Management cut its profit outlook for the year by 10%.

Alphabet

$GOOGL  ·  Cap $3.51T  ·  Week to date ▼ 11.4%
Alphabet just had its worst day since going public in 2004. People are searching Google more than ever, but AI answers earn less than old-school ads, so search sales grew a slower 12%. Meanwhile, it spent $51.4 billion on data centers last quarter, more than its business brought in.

FAST FACTSSticker Shock And Awe 😳

👵 Caregivers Now Spend $11,508 A Year: Family caregivers pay that much out of pocket to help a loved one, up about 60% since 2021. [Read]

🍬 Halloween Candy Costs 44% More: Candy and gum prices have climbed that much in 5 years, and sales are off to a slow start. [Read]

🤖 Anthropic's IPO Could Raise $100 Billion: The Claude maker filed Monday to list on Nasdaq as ANT, possibly as soon as November. [Read]

🏥 Cigna Is Leaving Obamacare: More than 350,000 enrollees in 11 states will need a new plan when open enrollment starts Sunday. [Read]

🦃 Walmart's Thanksgiving Meal Got Cheaper: Its holiday basket feeds 10 people for $35, less than the same groceries cost last year. [Read]

🏦 The Fed Will Set Rates Less Often: Warsh is turning 1 of next year's 8 meetings into a strategy session with no rate decision. [Read]

🪙 Jason Calacanis Called Bitcoin Dead: 3 investors, Grant Cardone among them, each offered him a $1 million bet it sets a new record. [Read]

THE ODDSFrom Austin To Area 51 🛸

CHART OF THE WEEKCheap Beats Clever 💸

It's easy to assume a pricier fund has smarter people behind it. But the data says those higher fees are more hype than results.

• Cheap funds win more often. Over the 10 years through 2025, 31% of the cheapest active funds outperformed comparable index funds. Only 17% of the priciest did.

• The gap snowballs. On $100,000 invested for 30 years at 7%, a 0.04% fee leaves you with $753,000. A 1% fee, about what the top of the chart charges, leaves you with $574,000.

• Investors have caught on. The average fund dollar now pays 0.32% a year, down from 0.80% two decades ago. In 2025, the cheapest fifth of funds pulled in $694 billion while the rest lost $244 billion.
  

The flashy funds aren't going away, and some of them will certainly have great runs. Over a lifetime, though, the cheap ones have the odds on their side.

WORDS TO REMEMBERNo Such Thing As A Free Lunch 🧠