Team Newsletter
The Big Picture
Statistics of Note
Here are a few metrics that we have been keeping an eye on to confirm convictions about further market direction. From a macro view, these are regular insights that we revisit often:
-Year to date the S&P 500 earnings are up 24.7% for the second quarter. In market terms we think of earnings growth similar to expected share price growth for the S&P 500. This is higher than most analysts anticipated for 2026.
- 10-year treasury yield remains +/- 4.5%. Mortgage rates are calculated from this yield, and this yield has proven to be a harbinger of market direction over the past few years. This yield, ranging much higher than 4.5%, portends softer equity markets and much lower than 4.5% tends to signal risk-on for the markets.
- As new Federal Reserve chair, Kevin Warsh has not openly hinted at rate direction. In fact, the new chair has openly stated that the rate of communication from the Federal Reserve Board should slow, with less verbiage rather than open signals to the equity markets as has been the norm for some time.
-While inflation cooled somewhat in June, down to 3.5%, the continued AI buildout continues to pose threats on “affordability”. This will be a topic in the spotlight as the midterm elections fire up in earnest.
Please reach out to us if you have any questions on how we approach portfolio positioning with these metrics as a backdrop.
Sectors & Trends
Current Sector Themes
Market leadership has broadened this year, with investors looking beyond the handful of stocks that dominated returns in the past. The economy has remained resilient, and inflation expectations still appear contained, although tensions in the Middle East continue to pose risks for energy prices and commodity markets.
Year to date, the strongest sectors have been Energy, Technology, Industrials, and Real Estate. Energy has benefited from firmer commodity prices and geopolitical uncertainty, while Industrials have been supported by infrastructure spending and reshoring trends. Technology remains an important driver of market returns, but investors have become more selective as valuations and earnings expectations have adjusted.
On the weaker side, Communication Services and Consumer Discretionary have lagged the broader market. These sectors have faced pressure from valuations, changing rate expectations, and a consumer that is still spending, but more cautiously.
What stands out is that the market is still rotating. Capital has shifted away from some of the most crowded growth trades and toward more traditional areas of the economy, including Energy, Industrials, and Real Estate. Technology continues to play an important long-term role, but the current environment has favored a broader set of opportunities, especially companies with reasonable valuations, steady cash flow, and dependable dividends.
Partners in Planning
How Technology, and AI, Is Changing Financial Advice. And What Matters Most
Lately, many conversations are starting with a similar question. With so much in the news about artificial intelligence and new financial tools, what does this mean for the advice you receive, and the role of a financial advisor?
There is no question that technology is reshaping the financial landscape. From automated savings tools to advanced planning software, today’s digital capabilities can analyze data faster, surface insights more quickly, and help identify opportunities that might have been missed in the past. These tools can be a meaningful addition to the planning process when used thoughtfully.
However, good financial planning has always been about more than data. It is about judgment, context, and understanding the nuances of your life. Technology can help organize information and improve efficiency, but it cannot fully account for personal goals, family dynamics, risk tolerance, or the tradeoffs that come with major decisions like retirement timing, gifting strategies, or supporting the next generation.
In many ways, the role of technology is to enhance the planning relationship, not replace it. By improving the tools behind the scenes, it allows us to spend more time focused on what matters most: helping you make confident decisions, stay aligned with your long‑term plan, and navigate change with clarity.
As these tools continue to evolve, our focus remains the same. Thoughtful guidance, personalized advice, and a steady hand through complexity are still at the center of a well‑built financial plan. If you have been wondering how these changes may affect your strategy, it is a great time to talk through what is new and what continues to matter most.
Baird Gives Back
Giving back to the communities we serve is an important part of who we are. Through Baird's Give Back program, our team recently had the opportunity to support local causes that are meaningful to us.
Sam Howard, a board member of the Leon P. Martuch Trout Unlimited Chapter, participated in stream sampling on the Cedar River as part of a multi-agency effort to monitor invasive species and protect local waterways. While he won't be seen in the accompanying photo, he was behind the camera capturing the day's work.
Meanwhile, Brian White and Greg Porath partnered with Little Forks Conservancy at Riverview Natural Area, planting more than 100 trees and shrubs to support a healthy forest ecosystem and provide habitat for local wildlife.
We're grateful for opportunities to support organizations that help preserve and strengthen the natural resources of our community.
Learn more about these organizations:
- Leon P. Martuch Trout Unlimited Chapter: https://www.martuchtu.org/
Little Forks Conservancy: https://www.littleforks.org/