July 2026 Newsletter

Dear Clients and Friends,

We hope you are all enjoying the transition into summer. As we close out the first half of 2026, we find ourselves reflecting on a period defined by remarkable market resilience, fueled by strong corporate performance and the transformative power of artificial intelligence.

In this month’s update, we will discuss the macro trends shaping the market, from the recent record highs for the S&P 500 to the ongoing debate around interest rate policy and inflation.

‍Market Overview

Equity markets continued to carry momentum through the spring, with the S&P 500 reaching new all-time highs and capping one of the strongest two-month stretches in recent history. While technology stocks, driven by intense demand for AI infrastructure, have remained the primary engine for this growth, the rally has shown promising signs of broadening into other cyclical sectors, including industrials and financials.

Despite these headline highs, the broader economic picture remains complex. Inflationary pressures have proven stickier than anticipated, and the market’s early-year optimism regarding imminent Federal Reserve rate cuts has shifted toward a "higher for longer" narrative with a potential rate hike at the end of the year. Markets are now carefully balancing strong corporate earnings against elevated inflation data and persistent geopolitical uncertainty.

Key Trends Shaping Your Portfolio

As we look at the current market environment, three themes stand out:

• The "AI Trade" and Capital Expenditure: Artificial intelligence continues to be the dominant force in the market. The sheer scale of AI-related infrastructure spending, led by hyperscalers committing hundreds of billions to data centers, is acting as a form of "private sector fiscal stimulus," supporting employment and demand across manufacturing, materials, and energy. Our equity portfolio has benefited from this trade and we remain overweight in this area.
• Earnings Power: Corporate fundamentals remain robust. S&P 500 companies have delivered strong earnings growth, often exceeding 20% year-over-year. This earnings strength has been the fundamental driver allowing the market to weather the macro uncertainty.
• The Inflation/Rate Dilemma: Inflation data has remained stubborn, causing a shift in expectations for the Federal Reserve. Investors are closely monitoring labor market data and geopolitical developments, particularly in the Middle East, as these factors continue to influence Treasury yields and energy prices.

Investment Strategy and Outlook

Our outlook for the remainder of the year emphasizes diversification and disciplined agility. While we remain optimistic about the long-term potential for innovation and growth, we are mindful of the risks associated with concentrated market leadership, elevated valuations, and interest rate volatility. We continue to favor quality technology companies, resilient balance sheets, and sectors well-positioned to benefit from the ongoing AI infrastructure buildout.

In our bond portfolios, we remain vigilant, keeping duration managed to avoid taking on excessive risk at the long end of the curve while seeking attractive yield opportunities in structured products and private markets.

Looking Ahead and Planning Focus

As we move into the third quarter of the year, our team will be actively stress-testing portfolios to identify potential vulnerabilities and ensuring your allocation remains aligned with your long-term goals. We will also begin our review of insurance policies, investments, and annual beneficiary review.

We invite you to schedule a consultation to review your portfolio and discuss how these market conditions impact your specific financial plan. Thank you for your continued trust in us as your wealth management partner.

If you ever have family or friends who may be in need of our expertise, please send them our way. We truly appreciate referrals from valued clients, like you!

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Warm regards,

Stephen Heitzmann, Managing Partner