CWS Market Review – June 30, 2026

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The first half of 2026 is officially on the books! So far, this has been a good year for Wall Street and the S&P 500. Even after a few dips recently, the index is up more than 9% on the year. The Dow just had its best first half in five years.

Here’s a breakdown of some YTD performance figures:

S&P 500 +9.55%
Dow Jones +8.85%
Russell 2000 +21.86
Nasdaq +12.79%
Nasdaq 100 +19.91%
Gold -7.03
Silver -16.18%
Oil 22.01%
Bitcoin -32.95%

The stock market could have more room to run. FactSet sees the S&P 500 rallying by 18.9% over the coming 12 months. Their target for the S&P 500 is 8,918.27. Personally, I admire that level of precision. They see all 11 sectors rising by double digits.

Frankly, the stock market had a little rougher time in June. At one point, the S&P 500 fell for five days in a row, and seven out of eight, but the losing streak was snapped on Monday, and the Nasdaq powered up again for a gain on Tuesday. The S&P 500 is back above its 50-day moving average.

What’s truly striking is that the Mag 7 has had a rough year so far. The group has lost a combined $2.3 trillion. All seven members are down for the year. In fact, all are down more than 10%. Tesla and Microsoft are both off more than 30% this year. Outside of the big boys, tech mostly did well during Q2. Micron is close to a double for 2026.

The story here is that Wall Street has gradually changed its outlook. It used to be focused on the level of cash flow from the Mag 7, especially free cash flow. Lately, it’s been more focused on the balance sheets as more of these companies are going to the bond market to raise cash.

What concerns me is that these companies are using these new funds to buy up companies at a frenetic pace. But are they buying companies because they complement their businesses? Or do they believe that if they don’t buy it now, someone else will soon?

How about small-cap stocks? The little guys are off to their best start in 35 years. The Russell 2000 is up more than 21% this year. Even there, AI is still part of the story. CNBC noted that chip-related companies make up 16 of the Russell 50 best performing stocks this year.

At the start of this year, Wall Street had been expecting earnings growth from the Russell 2000 of 23%. Now the forecast is up to 38%. Bank of America says that for every 0.25% hike from the Fed, that will knock 2% off this year’s earnings growth for the Russell.

If all 2,000 stocks in the Russell were merged and constituted in one stock, its market value would be in the low $3 trillions. That’s roughly in line with some of the Mag 7 names. (Of course, if all 2,000 stocks were bought out, the prices would radically change, but I meant this as a thought exercise.)

The hostilities in the Middle East continue to dominate the headline. There has been a softening in the oil market. For June, the price of oil is down about 20%. That’s good news on the inflation front, and it’s also a boost for consumer spending. Less money spent at the pump means more money spent elsewhere.

In the currency market, the Japanese yen traded at 162 to the dollar. That’s the weakest against the dollar in 40 years. That’s great for tourists, but it’s troubling to the government. In fact, the government will probably step in and start buying yen to help the currency.

Japan is starting to feel the effect of inflation. That’s something the country hasn’t had to deal with in decades. In fact, Japan has mostly dealt with falling prices.

There’s a long, sad history of finance ministers from every corner of the globe who have wasted tons of money to try prop up currencies that dearly want to go down. Reality has an odd habit of prevailing in these battles.

The yen has also been hurt by a surging dollar. That, in turn, has been aided by an increasingly hawkish tone from the Fed. There’s a decent chance we’ll get two Fed rate hikes during the second half of this year.

Frankly, there’s not a lot going on right now on Wall Street. Most of the fat cats are relaxing at their vacation homes in the Hamptons or on Martha’s Vineyard.

Earnings season isn’t far away. The unofficial kickoff for Q2 earnings season will be on Tuesday, July 14. (That’s Bastille Day. If you miss earnings, off with your head!) That’s when several of the big banks like JPMorgan Chase (JPM) and Goldman Sachs (GS) are due to report earnings. This will probably be another good earnings season, but I want to hear more guidance for the rest of this year.

This week is jobs week, but it’s a holiday-shortened week as well. We’ll get the ADP report on private payrolls tomorrow. Then on Thursday, we’ll get the June jobs report. Along with nonfarm payrolls, we’ll get the numbers for the unemployment rates and average hourly earnings.

Earnings Preview for FactSet

FactSet (FDS) is our lone Buy List earnings report between now and the start of Q2 earnings season. The fiscal Q3 results are due out tomorrow morning.

The shares have had an impressive recovery from February to early June. At one point, FDS gained 44% in a little over three months.

FactSet is a member of that group of stocks that’s assumed to be done in by AI, yet it continues to be very profitable. Three months ago, it happened again. Fact Set reported very good earnings, raised guidance and the stock rallied 6% the next day.

Let’s dig into the details. For its fiscal Q2, FactSet made $4.46 per share. That was eight cents better than Wall Street’s consensus, and it was up 4.2% over last year’s Q2. FactSet’s quarterly revenue rose 7.1% to $611 million.

The big stat for FactSet is Annual Subscription Value, or ASV. This is an important measure of forward-looking annualized revenue. For Q2, the company’s organic ASV was up 6.7% to $2.449 billion.

FactSet’s net cash from operations rose 21.7% to $211.7 million, and its free-cash flow was up 23.6% to $185.7 million. One weak spot is that its operating margin fell by 230 basis points to 35.0%.

For 2026, FactSet expects organic ASV growth of 5.4% to 6.7%. The company sees annual revenues ranging between $2.45 and $2.47 billion. For earnings, FactSet expects to be between $17.25 and $17.75 per share. That’s up from its previous guidance of $16.90 to $17.60 per share.

At the end of Q2, FactSet’s client count stood at 9,101, and its user count reached 241,352. Annual ASV retention was greater than 95%. When expressed as a percentage of clients, annual retention was 91%. Employee headcount was 1.9% to 12,840.

In May, the company increased its quarterly dividend from $1.10 to $1.16 per share. This is the 27th year in a row that FactSet has increased its dividend.

Three months ago, FactSet increased its growth forecast for organic ASV and annual revenue. The company expects operating margin of 34% to 35%. As I mentioned before, FactSet increased its earnings range for this fiscal year from $16.90 to $17.60, to $17.25 to $17.75 per share. For tomorrow, Wall Street expects FactSet to report Q3 earnings of $4.45 per share. Look for an earnings beat.

That’s all for now. The stock market will be closed on Friday. The jobs report will be on Thursday morning. Have a happy and safe Fourth of July weekend. I’ll have more for you in the next issue of CWS Market Review.

– Eddy

Posted by on June 30th, 2026 at 6:11 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.