t’s hard to believe we are halfway through 2026, but as we begin the third quarter, a temperature check of the overall market and economy is warranted. While trying to avoid sounding like a broken record, I will reiterate several points made in past newsletters, and what the latter part of 2026 might look like. Just over a month ago, S&P 500 companies concluded their strongest earnings season in 5 years – delivering earnings growth of 28.6%. The outlook for 2nd quarter earnings season, which picks up over the next couple of weeks, is expected to be between 20%-25%. Analysts are forecasting earnings growth to be north of 20% for all of 2026, and if it does indeed play out that way, would mark the third highest earnings growth rate in the last two decades.
Not coincidentally, the first 6 months of the year has been a strong one across all major indices. Below is performance of ETF’s that track the S&P 500, Dow, Nasdaq 100, and Russell 2000 (with small-capitalization companies the big outperformer year-to-date):
Employment Has Cooled – Cracks Ahead?
Last week’s jobs report showed job creation slowed in June with 57,000 jobs added, missing economist’s forecast of 113,000 jobs. With the meaningful downward revisions to April and May’s numbers, there is no doubt the job market has cooled. While one month does not make a trend, three months of weakness is something worth paying attention to. Additionally, this adds a layer of difficulty to the Federal Reserve’s outlook on rates for the rest of the year. We often talk about how their dual mandate of price stability and maximum employment are at odds with each other, which looks to be like the current environment we are experiencing.
Inflation Remains Sticky – The Fight Continues
As my colleague Tracey recently highlighted, inflation remains “the skunk at the garden party.” The Skunk at the Garden Party Core personal consumption expenditures (PCE), remains well above the Federal Reserve’s 2% target, with the trend moving in the wrong direction. The last 4 core PCE readings have shown year-over-year growth of 3.0% (Feb), 3.3% (Mar), 3.3% (Apr) and 3.4% (May). It will be hard to make the case for any Federal Reserve rate cuts for the back half of the year, unless we see a material decline in these numbers over the next several months.
Geopolitical Risks – The Great Unknown
As I am writing this article Wednesday morning, President Trump has announced the end of the Memorandum of Understanding (MOU)/ceasefire, which was in effect for the last three weeks. It outlined several conditions for the Iranian and U.S. governments to abide by as both countries work towards an end to the war (hopefully). With some recent attacks by Iran and retaliation from the U.S., tensions are rising yet again. Consequently, it would not be surprising to see a return to some elevated volatility in certain areas of the market (energy specifically).
Financial Planning Corner
530A (Trump) Accounts are Now Live
My colleagues and I have talked about these new accounts for a couple months now. Not so much as in all the great benefits of the account – which there are a few – but more so to make our clients and readers aware. Determining whether these accounts are right for you is based on your specific circumstances, but the one thing I do want to advocate for is the $1,000 seed money from the government. To me - if you, a friend, relative etc. have a child born between January 1, 2025-December 31, 2028, the $1,000 is “free” money, and who doesn’t like that? For more info and establishment of accounts: complete Form 4547 and download the associated app - Trump Accounts - The American Dream Starts Now. If it brings up additional questions, reach out to one of your RSWA advisors 😊.
Quick hits:
- The 2026 World Cup has brought numerous moments that make you smile, and gives you hope that there is more that unites us than divides us. Here are a few: 17 Wholesome Moments At The World Cup That Restored My Faith In Humanity - Yahoo Sports
- A couple of restaurants I’ve tried around the Portland area recently – couldn’t recommend enough - Portland Maine Tapas Restaurant, Cocktail & Wine Bar | Sur Lie; The Lost Fire - Grill & Bar
- With Wimbledon in its final few days, the story of wild-card British player Arthur Ferey has been one of the better stories to come from this year’s tournament: Who is Arthur Fery? Meet Britain's new Wimbledon hero - ESPN
- One book on my to-read list this summer: Becoming a Principle Driven Leader
Living for Today
It’s crazy how one month of the year seems to always deliver bad news for my family - year after year after year (injuries/sicknesses/passings etc.) For my family, it has always been the month of June (although not all bad - several birthdays in June as well). Fortunately, for 2026, we got through the month of June unscathed. However, it is a reminder to always live in the present because we are never guaranteed tomorrow – to cherish every day. I will leave you with this quote: “If you want to be happy, do not dwell in the past, do not worry about the future, focus on living fully in the present.”- Roy T. Bennett
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