From the desks of Stanley Katz & Lauren Madera
WELCOME TO SHARK WEEK, DISCOVERY CHANNEL’S ANNUAL DIVE INTO THE JAWS OF THE DEEP BLUE!
Major indexes finished another week lower (DJIA: -0.38%, S&P 500: -0.61%, Nasdaq: -2.13%), pressured by fresh AI doubts and a sharp oil price spike. Earnings season moved into high gear with 86 S&P 500 companies reporting. Alphabet and Tesla’s results disappointed investors, who interpreted elevated capital spending and weaker cash flow as signs that big tech’s AI bet may not pay off quickly enough to justify current valuations. While the geopolitically-driven rise in oil lifted energy shares, it pressured travel- and consumer-related industries, renewed inflation concerns, and helped push the benchmark 10-year Treasury note yield above 4.7% for the first time since January 2025. Initial jobless claims offered a rare silver lining, falling to 187,000, the lowest level since 1969. On the horizon: more major technology names are set to report in the coming weeks, and investors will be watching whether AI spending optimism can survive contact with the income statement.
Generally speaking, earnings season is off to a strong start, even if the stock market isn’t acting like it. In their new commentary, Argus Research notes that S&P 500 earnings are running 24% to 26% ahead of second-quarter 2025 levels, led by solid results from major banks. Technology earnings, forecast to exceed 60% growth for the quarter, are largely still ahead of estimates, with semiconductor and AI hardware companies expected to deliver the most dramatic numbers when they report later in the cycle. Argus identifies the ongoing conflict with Iran and its threat of sustained energy inflation as the chief overhang keeping stocks from fully reflecting the underlying earnings strength. The piece is a candid assessment of what a strong earnings season looks like when the broader environment refuses to cooperate.
Beneath the earnings headlines, market concentration remains a defining feature of today’s equity landscape, and Capital Group’s latest insight examines the risks it carries. A small group of companies now dominates major indexes to a degree not seen in decades, and the firm argues that market cap-weighted funds (which weight holdings by company size) carry more concentrated exposure than many investors may realize. Capital Group also highlights an emerging dynamic: AI fatigue is beginning to show up in the bond market, as investors weigh the longer-term sustainability of the AI-driven spending wave. For anyone thinking carefully about portfolio diversification in an era when a handful of names can move the whole market, it is worth a read.
Below are links to a number of third-party research reports that we have read and analyzed over the past week. We hope you will find the information interesting, useful, and worthwhile.
Argus:
Capital Group:
Goldman Sachs:
First Trust:
Northern Trust:
Stanley Katz & Lauren Madera, Financial Advisors
ClientFirst Financial Strategies, Inc.
937-293-5500
Source for weekly stock market returns: Barron’s.
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