The election is over, and Citadel Securities1 is telling clients the relief is more than emotional. In the firm's latest Global Market Intelligence note, head of equity and equity derivatives strategy Scott Rubner lays out a market that looks far healthier underneath the October selloff than the headline Nasdaq decline suggested, and he argues the pieces are now in place for investors to rebuild equity exposure into year end.
October, in Rubner's telling, was a rotation, not a retreat. The Nasdaq 100 fell nearly 10% over the month, yet the equal weight S&P 500 rose almost 5%, meaning money left concentrated winners for the rest of the market rather than leaving equities altogether. Four separate buyer groups, largely absent during the drawdown, are now returning at once.
Four Buyers, Walking Back In
Retail is the clearest signal. Individual investors have bought U.S. cash equities for 22 consecutive sessions since October 5, adding roughly $33 billion in what Rubner calls the sixth longest and fifth largest buying streak since 2017, averaging $1.5 billion a session even as the S&P fell 2% over the same stretch. Of the twelve prior streaks lasting at least 15 sessions, the index rose in ten, with a median gain of 2.2%, and none occurred alongside a larger decline than this one. Year to date, retail buying has reached a record $251 billion, topping the old full year high of $241 billion set in 2021. Options activity told the same story: October was the busiest ever on the firm's retail platform, with single name flows rotating hard into semiconductors, which captured nearly 40% of single stock premium, roughly double its share a year earlier.
Corporate buyers are the second leg. Earnings blackout windows, which kept less than a quarter of S&P 500 weight eligible to repurchase shares in mid-October, are lifting fast, with 85% of index weight expected to be clear by November 9. The timing lines up with a record year for authorizations, $1.5 trillion announced through November 2, already ahead of 2025's record pace, including $166 billion in October alone, more than double the historical monthly average.
The third buyer is systematic. Rubner's CTA model puts aggregate U.S. equity positioning at negative 3.3 standard deviations, the tenth percentile of its history since 2018 and the lowest reading since March 31, down from plus 1.7 sigma just three months ago. Trend followers have been short for 26 straight sessions, leaving considerable room to rebuild exposure if the market holds its recent technical recovery.
Earnings Win, Multiples Lose
Underneath all three flows sits a valuation story Rubner treats as the real opportunity. Earnings have been strong by any measure: 83% of the 304 S&P 500 companies reporting so far have beaten estimates against roughly 75% historically, one of the ten best seasons since 2005. Yet the market has barely rewarded it, with the index weighted average earnings day move at negative 1.2%, the second worst of 87 seasons on record. The disconnect is sharpest in the names that matter most to AI: forward earnings estimates for semiconductors have risen 30% since June, while the sector's forward multiple has fallen 35% over the same period, leaving it at a 25% discount to the S&P 500, the widest since 2018, versus a 66% premium at the peak of the AI trade in mid-2024. The Nasdaq 100 itself now trades at 19.1 times forward earnings, its cheapest level since October 2022.
The Rotation Beneath the Rubble
Rubner also flags how unusual the internals have been. The 14 percentage point gap between the equal weight S&P and the Nasdaq 100 over the past 20 sessions sits in the 99th percentile of any such window since 1990, with only the dot com era producing anything wider. Breadth has stayed remarkably strong through the drawdown, including an October 29 session in which 406 of 503 constituents rose even as the index itself fell. Because the ten largest S&P 500 names still carry 37% of index weight, any recovery in the stocks that led the selloff, Rubner argues, would have an outsized effect on the benchmark even without new money entering the market.
The Calendar Turns
Layered on top is seasonality. Since 1950, the S&P 500 has been higher six and twelve months after every midterm election, with a median twelve-month gain of 14.5%, and the fourth quarter of midterm years has historically been the strongest quarter of the presidential cycle. "The path of least resistance for U.S. equities is higher into year-end," Rubner concludes, pointing to fading uncertainty and the simultaneous return of several of the market's largest buyers.
Five Takeaways for Advisors and Investors
- The October drawdown was concentrated in mega cap tech and semiconductors, not broad based; equal weight exposure held up materially better than cap weighted benchmarks.
- Retail demand has not faded. A record $251 billion in year to date net buying, with a 22 session streak into falling prices, suggests individual investors are treating weakness as opportunity rather than a reason to exit.
- Corporate buyback windows are reopening into a record $1.5 trillion authorization year, a mechanical source of demand largely independent of sentiment.
- Valuation compression in semiconductors and AI infrastructure has outpaced any deterioration in earnings, with estimates still rising even as multiples fell to multi year discounts versus the broader index.
- Positioning and seasonality both skew favorable: CTAs are near decade lows in equity exposure, and post-midterm Novembers have historically been among the strongest months of the four-year presidential cycle.
Footnote:
1 Rubner, Scott. "November: The Setup Improves." Citadel Securities, Global Market Intelligence, 4 Nov. 2026, www.citadelsecurities.com/news-and-insights/global-market-intelligence/november-the-setup-improves/.
