INVESTMENT COMMENTARY & Outlook
July 2026
The second quarter was the best performing quarter for both the NASDAQ Composite and the S&P 500 in the past six years, so expectations remain very high since economic growth is clearly accelerating. Our favorite economist, Ed Yardeni, pointed out that we are in the midst of a FOMO (Fear of Missing Out) market and industry analysts are estimating that the S&P 500 will post 26.1% annual earnings growth for 2026 and 17.8% for 2027.
Since our fundamentally superior stocks are not appreciating as fast as their underlying earnings, price to-earnings (PE) ratios are being compressed. The stock market is expected to remain strong because we should have wave after wave of positive earnings announcements to look forward to in the upcoming weeks, as well as the rest of this year. Also, due to rising household wealth for the 50% of Americans who invest in the stock market, some of this “wealth effect” is expected to filter down and help boost prosperity for all Americans as the velocity …