The Sunday Drive - 05/17/2026 Edition [#215]

Musings and Meanderings of a Financial Provocateur

A Sunday Drive Around the Internet

👋🏼 Hello friends! Let’s enjoy another Sunday Drive around the Internet.

🎶 Vibin’

This week the President wrapped his first state visit to China: 200 Boeing planes and a “constructive, strategic and stable” framing on one hand, Xi’s sharp Taiwan rebuke on the other, all against the smoldering Iran war backdrop. Some deals got cut, some ground got lost, which is why this week I’m vibin’ to the Stones who remind us You Can’t Always Get What You Want.

💭 Quote of the Week‌

“Embedded inside every Treasury yield is an assumption about American institutional and military credibility as guarantor of global trade and financial order.”
— René Aninao

📈 Chart of the Week

When the Rocket Launches From the Rooftop

This week’s Chart shows the S&P 500’s run from March 27 through May 8, a 16.2% gain in just six weeks, making it the 11th-biggest six-week rally going back to 1950. Rarefied air to say the least.

But the thing that makes this rally genuinely unusual is something I thought was worth discussing. Every other rally on that list, every single one, started from a market that was either bombed out, mid-crash, or with an economy crawling out of recession. 2009. 1982. 1974. 2020. Same setup, every time: panic, capitulation, violent mean-reversion bounce.

Not this one. This rocket launched from the rooftop, or at least close to it. The S&P was not very far below all-time highs when it took off.

So what happened?

I think a few forces converged, and they all served to buoy the market.

First, earnings. Q1 reporting was simply too good to fade. Strong revenue growth and operating leverage, especially in AI-adjacent names, set the stage for higher earnings expectation for the balance of 2026. Breadth was also wider than the headlines suggested.

Second, policy. Despite Kevin Warsh emerging as the next Fed Chair, it appears likely that we could see a bit of a stalemate at the Fed, and we may see them become less active. With rates leaking higher, it appears the equity markets are willing to believe that the bond market, not the Fed, is going to do the hard work of getting inflation down.

Third, tail risks faded. Iran stopped escalating. China posturing softened ahead of the state visit. Risks didn’t disappear; they just stopped getting worse.

Layer on top: a generation of investors trained to buy every dip and chase every rip. The same FOMO mechanic that powered the late-90s melt-up, except this time it’s running over an economy that isn’t even pretending to be in recession.

So what comes next?

Here’s where I’d urge some sober reflection.

The forward-return columns in this week’s Chart show 16% on average over six months, 30% over a year, 79% over five years. But those averages are flattered by the recovery rallies they’re built on.

When you bounce 17% off a generational low, the next five years are likely to look pretty great. When you run up 16% from already-elevated levels, the path forward is murkier. Valuations matter. Positioning matters. And the starting point matters most of all.

I would just say that the best six-week stretch you’ll ever live through is almost certainly the one that makes you forget what risk feels like.

Don’t forget what risk feels like.

🚙 Interesting Drive-By’s 🚙

🏠 You Can Put a Data Center at Your House — But Who Really Pays? — Span and Nvidia want to bolt $500K mini data centers to the side of your house. Untested, unpermitted, and a tell on just how desperate the AI power crunch has become.

💰 State Income Tax Rates — A handy state-by-state cheat sheet. Worth a look for anyone weighing the relocation math in retirement.

💡 AI is the New Netflix — Om Malik flips the broadband narrative: AI is driving the upstream surge the way Netflix once drove downstream. Cloud sync, IoT, and agentic AI are killing the asymmetric pipe.

🤔 Bryan Johnson’s Longevity Hacks — The Don’t Die guy’s latest health playbook. Worth a skim whether you buy the religion or not.

🤓 UrbanKaoberg.com - Part II: Revenge of the “Mullet” — Michael Kao on the trap of AI-built software: professional in front, KAOS in back. The case for why vibe coding requires more engineering, not less, and why the SaaSpocalypse narrative is overrated.

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👋🏼 Parting Thought

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If you have any cool articles or ideas that might be interesting for future Sunday Drive-by’s, please send them along or tweet ‘em (X ‘em?) at me.

Please note that the content in The Sunday Drive is intended for informational purposes only, and is in no way intended to be financial, legal, tax, marital, or even cooking advice. Consult your own professionals as needed. The views expressed in The Sunday Drive are mine alone, and are not necessarily the views of Investment Research Partners.

‌I hope you have a relaxing weekend and a great week ahead. See you next Sunday...

Your faithful financial provocateur,

-Mike‌

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