Regardless of the somewhat chaotic political/policy environment in Washington, the stock market continues to reach new highs. Ignoring the latest headlines out of Washington, or the latest “Breaking News” headlines you see come across your phone or on your television screen can be a difficult thing to do. The “noise” can be overwhelming, yet the stock market ultimately moves higher or lower based on corporate earnings and expectations. Thus far, of the companies who have reported (which is only about 20% of the S&P 500), 81% have beaten earnings estimates. While equity analysts usually lower earnings’ estimates as earnings season approaches, thus beating a lowered bar, 81% is above historical levels. It will be interesting to see how the next couple weeks evolve as most of the “Magnificent 7” names will report, with Nvidia last to release results in late August. (The Magnificent 7 makes up approximately 1/3 of the weight of the S&P 500 - their importance can’t be overstated). Below is year-to-date performance of the 3 major US indices:
Will the Fed Continue to Be On Hold?
The Federal Open Market Committee (FOMC) will meet next week (and yes – Jerome Powell is still the Chairman - for now), it looks likely that the FOMC will keep rates where they are until their September meeting. Inflation has remained stubbornly high, and with the latest inflation data indicating we are running closer to 3% than the Fed’s 2% goal, it leaves little room for the FOMC to cut rates. Additionally, and I know I sound like a broken record, the economy remains incredibly resilient. The latest estimate for 2nd quarter GDP growth via the Atlanta Fed GDP Now model is north of 2%. With the unemployment rate at 4.1%, the economy showing continued strength, and recent inflation data, the case for a rate cut is hard to make.
Financial Planning Corner
Elimination of Saving on a Valuable Education (SAVE) Plan– Implications for Borrowers
Approximately 7.7 million people are enrolled in the Biden Administration’s Saving on a Valuable Education (SAVE) repayment plan that launched in 2023. This new income-based repayment plan based payment obligations on borrower’s discretionary income, capping payments to 5% of income. For well over a year, due to the extension of the forbearance period, people enrolled in the SAVE plan have not had to make payments, and interest on outstanding balances was not accruing. Beginning August 1st, borrowers in the SAVE plan will see interest once again accrue, putting an added financial strain on borrowers. Additionally, with the passage of the One Big Beautiful Bill Act, major changes to multiple programs will take effect July 1, 2026 – anyone with student loans should review the link that follows: Big Bill Means Big Changes For Student Loan Borrowers: What You Need to Know - Student Loan Borrowers Assistance
Homeowner’s Insurance – Shop Around
I am in the process of buying a home, and along with the excitement of this big next step, comes the added stress of never-ending paperwork, home inspection, appraisal, etc. However, one thing you must do your due diligence on is researching the right homeowner’s insurance policy. If you are in the process of purchasing a home or have lived in the same house for decades, it’s a good idea to make sure your policy aligns with your current needs. Best Homeowners Insurance Buying Guide - Consumer Reports
Quick Hits:
- Sweet treats are hard for me to resist, here is a list of top places to treat yourself in Portland - Desserts & Ice Cream | Unforgettable Dining Experience in Portland Maine
- If you love oysters - Crown Jewel
- Not that I’m one to drift too far from shore, but it seems like shark sightings are on the rise this year – especially in the Northeast (stay vigilant) Hammerhead shark sightings are increasing off Massachusetts. Here's what to know about them. - CBS Boston
- I finally gave in and played pickleball for the first time (I’m an avid tennis player) – Pickleball vs. Tennis: Why Pickleball is Taking Over
- Trying to get here in the next few months- Acadia National Park, Maine - Recreation.gov
Quote: “Resolve to be a master of change ran than a victim of change.” Brian Tracy
