October was a terrific month for the markets. U.S., developed, and emerging markets were all up. Companies are making money, and stock markets are positive. Plus, despite three of the worst storms in U.S. history, consumer and business confidence grew. This is a very positive sign. On the corporate earnings front, however, there is some worrisome headline data. Still, profit growth continues to beat expectations.

Sitting in the chair that I do, I take quite a bit for granted, not least of which is that things I deal with every day—for example, the Fed—are important. Yet when you stop and look at it, if you are not in the middle of the financial news flow, it isn’t obvious (at least it wouldn't be to me) exactly why that is. Why is there so much coverage of Fed meetings and, at the moment, the selection of a new chair to run the Fed? Today, let’s take a step back and think about why the Fed matters to you and why you should care.

As of the end of last week, more than half (55 percent) of companies in the S&P 500 had reported earnings for the third quarter. So, it makes sense to see where we are and what that means for the markets. On the whole, the news is good. But it has to be understood in the context of the recent hurricanes, which—to no one’s surprise—have hammered earnings in the insurance sector. (All of the data here comes from the FactSet Earnings Insight analysis.)

Last week was a relatively slow one, but it still gave us a look at the economy as a whole. The data was surprisingly strong, especially in light of the hurricanes’ impact, and came in better than expected across the board. Despite some concerns about growth, this news was quite good and suggests some of those concerns may not play out.

In part 4 of this series, we concluded that the map was separating from the territory, along with the reasons why that was so. Today, let’s take a look at what to do about it.

As I mentioned yesterday in part 3, passive investing is a rule-based system and a fairly simple one. Put your money into an index, and buy all of the components at the current weight. This is the case regardless of whether you purchase a mutual fund, ETF, or some other vehicle. You simply buy the index, taking its weights as gospel.

Last Friday, we talked about how artificial intelligence (AI) is, at heart, something simple: a set of rules and if-then statements. As such, AI can be very helpful in a simple environment, where relationships and rules remain constant, but it tends to stumble when those rules change. Waze, which is a great example of this, lives in a world of maps. It is very useful, but it fails when the reality doesn’t match up with the map. Any self-driving car will have to take closed roads, weather, and crazy drivers into account, which works well much of the time, but not always.

Last week gave us a broad look at the economy, including industrial production and housing. While the business news was generally positive, housing was more mixed—suggesting a potential slowdown in the next couple of quarters. It is clear that growth continues and is likely to keep going for some time. Still, and despite the disruptions from the hurricanes, there are signs that we are in the later part of the economic cycle and will need to keep an eye out for slowing growth.

As I mentioned in part 1 of The State of the Market, today I’d like to take a side trip into a different area: artificial intelligence (AI). One of the key themes we see pretty much everywhere these days is that computers, or robots, are taking over the world. This “age of automation,” as I will call it, is often seen as the rise of the machines (think the Terminator movies) and the associated demise of human jobs.

After talking about where the bubble is and then Black Monday, there is something we must acknowledge: despite all the hand-wringing, the market is high and seems to be rising even further. Like the bumblebee— which, according to all sorts of sophisticated aerodynamic analysis, cannot fly—the market doesn’t know it can’t go higher and so it does.