Energy

Markets continue to hold up remarkably well as we move through the traditionally difficult second half of August, but the risks beneath the surface have shifted. Commodity prices are rising, money growth remains stronger than I would like, and long-term interest rates are again testing important levels.

For the past five weeks, markets have been focused on a steady stream of corporate earnings, supported by upbeat management commentary and another quarter of strong results. But with second quarter 2026 earnings season nearing its end, investors' attention is shifting back to the macro backdrop.

The debt problem is real. It just isn’t a bomb. As we’ve written before, the debt and deficit problem isn’t what you think. It’s a tax on future growth, collected slowly, and normal interest rates are simply the price of money doing its job, not the crisis the headlines keep selling.

To some, the debate over inflation targeting is largely an academic exercise. But its outcome will have direct consequences for the paths of global interest rates and global markets. Some background on how we arrived at this juncture, and where we might go from here, follows.

In the early weeks of Kevin Warsh’s start as chair of the U.S. Federal Reserve, there has been renewed focus on how “underlying” inflation should be measured to guide decisions on interest rates.

Artificial intelligence is the topic of the day. It seems everyone has an opinion but not much actual factual knowledge. I’ve been dragging emails and research into my AI folder for a very long time. Today (and next week) I review those emails, as we are going to look at the reasons there is so much opposition to AI data centers.

Outdoor sports and exercise are more difficult at the height of summer. Runners slow their paces, and teams start their practices early to beat the heat. Competitors must marshal their energy carefully to perform at their best.

Our job is to lead our investors to success in the “winding.” Most investors in US common stocks have found their way on the most spectacular gravy train in the history of common stock investing. This gravy train has been terrific for 17 years since the stock market bottomed in 2009.

It has been a stellar Q2 earnings season, but we aren’t done yet. After the big retailers this week, Jensen Huang and NVIDIA grab the spotlight on Wednesday, August 26. Then Kevin Warsh takes the podium on the 28th. Through it all, daily market swings hinge on the latest AI developments, along with consumer trends and what’s happening geopolitically.

U.S. equities were mostly higher last week, though gains were modest and trading was quiet. The S&P 500, an index of the largest U.S. companies, rose 0.4 per cent and closed on Thursday at a new record high.

Equity markets continued to push higher this week, with nearly all major indices in the U.S. and abroad closing near or at record highs. While longer-term interest rates continued to drift higher, shorter-term interest rates moved lower as investors pushed out both the timing and magnitude of potential Federal Reserve rate hikes.

The market continues to impress, with the S&P 500 reaching another record high despite a surprisingly weak retail sales report. I had to look twice at the numbers because the weakness was broad, including the important control group, with the previous month also revised slightly lower.

VettaFi today officially completed its acquisition of RAFI Indices, LLC from Research Affiliates Global Holdings, LLC. The deal was originally announced in June 2026. The transaction unites RAFI’s decades of deep, academically grounded intellectual property with VettaFi’s agile, modern indexing infrastructure.

I’ve said it before, and I’ll say it again: it’s not the political party that matters, but the policies. Investors, I believe, are better served when they focus not on the partisan noise and headlines but the policies that bring about change.

So let’s do the work the timeline skips, starting with separating what actually happened from what the narrative needs you to believe. Then we’ll ask the only question that pays: should any of it change how you’re positioned this morning?

The softening inflation data for June and July was broadly supportive of our view that monetary policymakers should keep interest rates unchanged for the remainder of the year. Unfortunately, the picture is likely to become less favorable over the next several months, particularly if oil and gasoline prices continue to move higher. While lower gasoline prices contributed to the improvement in inflation during June and July, they do not tell the whole story.

Franklin Templeton Institute finds valuations across fixed income sectors becoming more attractive, with all-in yields approaching compelling levels—a signal to consider moving from a short-duration bias toward core bond portfolios.

The S&P 500 towed an anchor for much of the summer as a historic momentum and leverage unwind under the surface dragged on the equity benchmark before breaking out to fresh records last week.

Artificial intelligence data centers are hitting a power problem that has little to do with computer chips, according to a new report from Thornburg Investment Management.

All told, global equities are near all-time highs, despite the sharp June-July semiconductor drawdown. Fundamentally, an eye-popping 50% Q2 SPX earnings growth rate fuels the rally. Of course, it has been a perfect storm of sorts for domestic large-cap profitability. ​

The market was jolted by a much weaker-than-expected employment report, sending Treasury yields sharply lower as investors quickly reduced the odds of another Federal Reserve rate hike. At first glance, the payroll number looked alarming, particularly when combined with sizable downward revisions to prior months and unexpectedly soft wage growth.

Stocks moved higher as stronger economic data, solid corporate earnings and easing geopolitical concerns helped support investor optimism.

Demand continues to outpace record supply. Municipal bonds remain an attractive income opportunity in a market where the Federal Reserve (Fed) is likely to remain on hold and carry is driving returns. Despite record issuance of roughly $50 billion per month, demand has remained strong. 

Earnings drive market corrections. That’s the finding, and the next serious decline won’t arrive with a headline about capital spending or the deficit but will begin exactly where all eight of the others began, in the profit cycle, surfacing in credit spreads and revision breadth well before it reaches any earnings report you can actually read.

Fifty-eight billion dollars. That’s what the Department of War just awarded Lockheed Martin for PAC-3 interceptors, the missiles that have been knocking Iranian ballistic missiles out of the sky for the past five months. It’s one of the largest munitions awards in U.S. history.

US equity market leadership underwent a rotation in July, with previous leaders turning into laggards and vice versa.

“Sound money,” in its purest form, is money whose supply a government cannot expand at will. Under a gold standard, every dollar is a claim on a fixed weight of gold. You can’t print gold. So the government can’t monetize its deficits, and the money supply grows only as fast as miners pull metal out of the ground, historically around 1.5% a year.

Chris Galipeau discusses high-conviction insights that go beyond media headlines.

Fixed income markets continue to adjust to an evolving policy backdrop following last week’s Federal Reserve meeting.

There is no one-size-fits-all individual investment strategy. We all have different needs. Once I decided I needed a portfolio that would work for today, I became convinced that a dividend growth portfolio should be the core of my long-term investment strategy. Not an addition, but the core.

The S&P 500 was flat in July 2026 as semiconductors fell 29%, energy gained nearly 13% on higher oil, and long-term Treasury yields reached their highest levels since 2007.

On Wednesday afternoon the Federal Reserve held interest rates steady for a fifth consecutive meeting, and stocks buckled: the Dow fell 1,153 points, its worst day since April of last year.

July 2026 was a flattish month for markets. The S&P 500 index was down slightly. Value did well, while momentum did poorly. Smallcaps, midcaps, and emerging markets, all of which have been the year’s best performers, had a bad month. Commodities, driven largely by oil prices, led the pack, as the fragile ceasefire in Iran failed to hold.

Many of the most critical components of AI infrastructure are produced by a small and increasingly consolidated group of highly specialized companies.

LPL Research highlights strong corporate earnings, AI-driven growth, and a favorable equity outlook while monitoring inflation, oil prices, and risks.

July was an eventful month for both domestic and international markets, with US-Iran tensions flaring up, increasing energy prices and changing investor expectations for the Federal Reserve (Fed) cutting rates.

The financial markets expected the Federal Reserve to leave interest rates unchanged at its recent meeting, and it did just that. However, three members of the FOMC dissented, voting to raise rates by 25bps in an effort to combat stubbornly high inflation.

This summer has offered little opportunity for a lull. Investors have contended with Federal Reserve (Fed) policy uncertainty, renewed tariff-driven inflation concerns, escalating tensions in the Middle East, questions about the durability of AI-related investment spending and a packed earnings calendar.

The market spent much of this week trying to interpret what Fed Chair Kevin Warsh meant rather than what he actually said and that was entirely avoidable. The decision to leave rates unchanged was defensible. What wasn’t defensible was Warsh’s lack of explanation.