The Weekly Update 08/07/2026™
Looks like The Weekly Update I wrote and posted to TWSG website last Friday nailed it.
The Weekly Update for 7/31/2026 was written and posted with near perfect detail and timing. So accurate that I am making it part of this week’s edition of The Weekly Update.
But before we get to that:
Thoughts: Crashes, recessions unfolding, recessions coming, banks shutting down, real estate collapses, oil crunches, wars, great recessions, Wall Street investment banks collapse, 4 of the top 10 banks collapse, 2 of the top 10 insurance companies collapse, China tariff war I, II and III, any number of currency crises, Brexit, Greece debt collapse, inflation, deflation, rate increases, rate cuts, more inflation, debt balances, contagions of all sorts and sizes, COVID, more wars, more bombings, cities burning, fraud intervening, numerous "credit events", yen carry trades, inverted yield curves, ISMs under 50, Sahm Rules, LEIs going negative, QT, QE, 10 - 12 Buffett Indicators, more wars, more inflation, the Fed is going to do something wrong - all the time, AFC Super Bowl Wins, Year of the Horse, Tiger and Rat, anything Trump does is bad, mid-term risk years, Tariff Day Panics x 3, more tariff wars, The Strait of Hormuz (squared), shutdown, closed and controlled by Iran, politics of the most bizarre nature conceivable - and a nearly endless number of other reasons have been used over the decades to do one thing: scare you, keep you tense and fill the mind with angst and chatter.
And yet - get this -the latest Dow close is the highest level in history.
We know this strategy to scare investors into selling, so the big desks can buy their shares on the cheap is of significance, and here is how I detailed it in last week’s update.
The Weekly Update from 7/31/2026™
Summer Is Acting Like Summer!
In last week's edition of The Weekly Update™, I shared the common denominator of my 44 summers before this one. The common denominator is that all have experienced choppy prices, churning with little direction, noisy, with lots of chatter and angst. (Read it Here)
The Fear Level has increased since The Weekly Update for 7/10/2026™, “Fear Is Deep”, (Read it Here). This week the FEAR has increased even more in the chart below from Bloomberg Research. The retail investor money flow has dropped to COVID pandemic lows!
I might be incorrect in this observation, yet this has gone from absurd to stupid. The next chart, from The American Association of Individual Investors (AAII) reports over 70% of investors are not bullish (positive) on the investment outlook for the next six months.
And yet, in the background behind the choppy prices churning with little direction, noisy with lots of chatter and angst, Corporate America, as measured by the S&P 500, is knocking the leather off the ball. Observe this chart sourced form FactSet.
Combined, these three charts suggest investors have let emotion take over their decision-making process. Like other investment points in the last few years, I think they will regret this as Chart #3, Earnings per Share, (EPS), continues to grind higher, i.e., making the value of companies higher.
Not included in Chart #3 above, is the Yardeni Research 2028 earnings estimate of $475-$500 per share for the S&P 500. For fun, let’s assume this EPS number is correct. If it is, and it is highly likely based on current earnings trends, the S&P 500 is trading at about 15x earnings just a year and a half out.
Close to 21x, the 20-year average P/E, suggesting 2028 could see the S&P 500 as much as 40% higher and maybe more than that if we were to trend above 21x.
As always, your WSG team remains focused, thoughtful, and on purpose as we continue the ongoing process of allocating The WSG client family assets entrusted to our oversight.
I did not say market valuations go straight up, and I did not say without volatility, yet the data flow suggests the good old USA has a very bright outlook.
Thank you for your trust and confidence. As always, I am interested in your thoughts, comments, and observations. Feel welcome to call, email or stop by the office and say Hi.
Respectfully,
James O. Lunney, CFP®
CERTIFIED FINANCIAL PLANNER™ Professional
*The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. Investing involves risk. Loss, including loss of principal, may occur. No strategy assures success or protects against loss. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
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