CWS Market Review – August 4, 2026

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It happened! Finally!

The stock market closed at another new all-time high today. We made back everything we lost in that awful, terrible…and very minor…selloff we had this summer.

In June, the stock market fell 4.5% in six sessions. Scary, I know, but it did unnerve a lot of smart people. The selling mostly hit the Tech and AI sectors. The May jobs report didn’t help.

It took nearly two months to make it all back, but we did it. As the great Jesse Livermore said, “it never was my thinking that made the big money for me. It always was my sitting.” Indeed, sitting has been a very good strategy on Wall Street.

Earnings from Wall Street continue to be very good. The bar was set very high this season and so far, many companies are backing it up. Palantir Technologies (PLTR) rallied 30% today after it reported — in its CEO’s description — “otherworldly” earnings.

The company’s commercial revenue jumped 149% to $764 million. Karp said, “to my knowledge, no businesses at our scale has even grown half this much.” During one 17-day stretch in June, shares of Palantir lost one-third of their value.

The stock market is at an all-time high, and the ISM Manufacturing Index is at a four-year high. You wouldn’t think these things wouldn’t anger people, but they do. Not only that, but consumer sentiment is also doing well (more on that in a bit).

In this week’s issue, I want to take a closer look at the economy and where it stands as we head into the final few weeks of the summer. The U.S. economy continues to grow but at a slow-to-moderate pace. Nothing great, but nothing horrible either.

The stock market took last week’s Fed meeting with grace. So far, the stock market seems pleased with the Fed’s plans, but the next big test for the market comes this Friday. That’s when we’ll get the jobs report for July. We’re still stuck in the “no hire, no fire” economy. I suspect we’ll see more tepid job growth from this week’s report.

Before I get to that, let me say a few words about our Buy List. Some of our stocks also reached a new all-time high today. We did well with stocks like Allison Transmission (ALSN), which rallied on strong earnings. Henry Schein (HSIC) and Broadridge Financial (BR) also did well. In fact, HSIC made a new high today. So did HEICO (HEI).

Perhaps our biggest winner was IES Holdings (IESC). Last week, the company reported very good earnings, and shares jumped 50% in two days. IESC is another one of these stocks that’s completely ignored by Wall Street. No analyst bothers to cover it. IESC also announced a two-for-one stock split.

I’ll have more to say about our Buy List earnings reports in our premium issue (you can sign up for it here). Our overall Buy List is also at a new high. Our ETF also made a new high. First, though, we should look at the economy.

Where the Economy Stands

Let’s run through some of the recent economic news. We’ll start with last week’s Fed meeting. As expected, the Fed didn’t raise interest rates. There was, however, a late surge in speculation that the Fed might raise rates. That failed, but it was interesting to see. In fact, in the Fed’s policy statement, three members of the FOMC voted to raised rates immediately.

Those folks are a bit premature, but I think there’s a decent chance that the Fed will hike rates at its next meeting which is scheduled for September 16. Traders also think a rate cutting is coming next month. They also see one more distantly in April, but that’s too far away. Frankly, at that distance, you’re just guessing.

Fed Chairman Kevin Warsh has significantly slimmed down the policy statement, which is a move I hope will continue. The important part of Wednesday’s statement said, “Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East. Productivity growth and capital investment are strong. Job gains have kept pace with the workforce, and the unemployment rate has changed little.”

You see the long red bar at the lower left? That’s when everyone briefly panicked when the Fed statement came out. With the hindsight of a few days, we can see how pointless that was. The stock market is doing just fine.

On Thursday, the government released its initial estimate for Q2 GDP growth. The report said that the U.S. economy grew at a real annualized rate of 1.5% for the second three months of the year. That was a little bit below expectations of 1.8%, but not too bad. That’s largely within the trend that’s existed since the end of Covid-19.

The University of Michigan’s survey of consumer sentiment is also doing well. In July, the sentiment index rose to 55.2 from 49.5 in June. That’s an increase from the initial reading of 54.4. Some of this was probably aided by lower gasoline prices. Going by what I see on social media, a lot of investors would be surprised to learn how optimistic many folks are.

On Monday, the ISM Manufacturing Index came in at 55.6. That’s the highest since May 2022. The ISM has a good track record of aligning with recessions. Historically, recessions don’t line up with ISMs below 47 or so. In plain English, we’re still in the safe zone.

Tomorrow, we’ll get the ADP report on private payrolls. This report isn’t always a good omen for the government’s jobs report, but it’s interesting to note. Wall Street expects a gain of 75,000. That seems very conservative to me.

Today’s Job Openings and Labor Turnover Survey, better known as JOLTS, showed an increase in hirings and a decrease in openings. Job openings fell by 178,000 to 7.359 million. Job openings for healthcare and social assistance fell by 147,000 in June. Last week’s survey from The Conference Board’s survey said that the shares of people viewing jobs as plentiful fell to its lowest level in five years.

For Friday’s jobs report, the consensus is that the economy created 83,000 net new jobs last month and that the unemployment rate stayed at 4.2%. The unemployment rate has barely budged over the last two years. If the jobs report manages to come in well below expectations, that could set the Fed’s rate-hiking plans back even further.

That’s all for now. Stayed tuned for the July jobs report which is due out on Friday. I’ll have more for you in the next issue of CWS Market Review.

– Eddy

Posted by on August 4th, 2026 at 6:32 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.