Five for Friday – August 14, 2026

Small Biz, Momentum, All Time High, Worries, and Social Security

1. Small

Although most stock portfolios tend to be concentrated in larger firms, we like to look at the small business backdrop from time to time to take the temperature of Main Street. This week things are looking up: the NFIB Small Business Optimism Index saw a 12-month high and hiring at the best level since Oct. 2022. Speaking of, over the last 12 months the smallest companies in the U.S. created more jobs (in aggregate) than larger businesses did. On the market side, the Russell 2000 Small Cap index outperformed the (large-cap) S&P 500 by 18.5% over the 12 months ending June 30, the best such stretch of relative outperformance in five years. Markets can rise and the economy can grow when market leadership is concentrated in larger companies (just look at 2023-24) but when small caps do outperform and small business owners are more confident, it signals more firms hiring, investing, and taking risk – and therefore a broader and more resilient growth backdrop.

 2. Mo'

Last week, the S&P 500 capped a 5-day run of +5.6%, the best 5-day stretch since April 2025 (and better than 99% of such stretches since 1950). Our partners at Baird Strategas wrote that while such strong momentum is more frequent coming off a low rather than after a new high, “average forward performance from either condition comes in stronger than the historical average.” As we’ve seen time and again, strength tends to beget more strength in markets. And while momentum alone doesn't drive markets forever, history suggests it's unwise to stand in its way.

3. ATH

Said 5-day move also brought the stock market to the first new all-time high in months. That can be a nerve-racking place to be, especially if you’re looking to put new money to work. But as we’ve written before, the market has seen nearly 1,000 all-time highs over the last 50 years, and the average forward return from an all-time high is actually better than the all-period average. New highs are rarely the peak of the mountain, but rather base camps along the way. Despite bubble anxiety and reasons things could turn bad from here, this bull market is broad, driven by earnings over speculation, and still short of average in length and magnitude.

4. This month

on All That Matters, Mike and I discuss two post-pandemic concerns that never bore the fruit that market bears expected. We also put a bow on a great summer, capped by strong World Cup spending and a historic box office. 

5. On this day

in 1935, President Franklin D. Roosevelt signed the Social Security Act into law. On Jan. 31, 1940, the first payment, check number 00-000-001, was issued to Ida May Fuller for $22.54. Miss Fuller lived to be 100 years old, collecting a total of $22,888.92 in benefits against $24.75 in payroll taxes paid (how’s that for return on investment?). Today, the program’s solvency is a common question among clients – Baird’s planning team wrote on the topic here.  

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.

For investment advice specific to your situation, or for additional information, please contact your Baird Financial Advisor and/or your tax or legal advisor.

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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