CWS Market Review – July 21, 2026

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The stock market has been unusually placid this month. Perhaps the World Cup and our 250th birthday sapped all the excess energy. If it feels like the market closes every day at or near 7,500, you’re not imagining things. During the entire month of July so far, the index has always closed within 0.9% of 7,510. Today we closed at 7,509.20.

Summertime and the livin’s easy….

Despite the tranquil appearance, there’s a lot going on just beneath the surface. Q2 earnings season kicked off last week. Some of the major banks reported very good earnings. We also got a very good earnings report from one of our Buy List stocks. Abbott Labs (ABT) not only beat earnings, but it raised guidance as well. The shares got a nice boost following the report.

This week, 86 stocks in the S&P 500 are due to report. We already have some early numbers for this earnings season, and it’s looking quite good. So far, 10% of companies in the S&P 500 have reported. Of these, 88% have beaten Wall Street’s consensus. That’s well above average. Companies are reporting earnings that are on average 16.4% better than estimates.

For Q2, the S&P 500 is currently on pace to post earnings growth of 24.7%. If that’s right, then this will be the seventh quarter in a row of double-digit earnings growth, and the second in a row of 20+% growth.

For revenue growth, 85% of companies have beaten Wall Street’s forecasts. So far, the revenue beats are running at 3.8% above estimates. That’s quite good. The overall revenue growth rate is currently tracking at 12.3%.

Analysts are very optimistic for this year. Perhaps too optimistic. For Q3, Wall Street is looking for earnings growth of 27.0%. For Q4, it sees growth of 24.5%. That’s huge. It means that for all of 2026, the S&P 500 will grow its earnings by 24.5%.

We got our second Buy List earnings report this morning from Mueller Industries (MLI). If you recall, shares of MLI recently split 2-for-1. One of the things I like about Mueller is that it’s almost completely ignored by Wall Street. For Q2, Mueller made $1.13 per share so I can’t say if it beat earnings or not because there’s no consensus.

Since shares of Mueller rallied 5.6% today, that’s probably a hint that it topped someone’s consensus. Mueller also raised its quarterly dividend from 12.5 cents to 17.5 cents per share.

I expect to see more good news from Mueller. The CEO said, “Backlogs are strong, and we are carrying out our 2030 strategic plan initiatives with a high sense of urgency.” I’ll have more details on Mueller later this week in our premium issue.

As I’ve said before, one of my concerns about this earnings season is that expectations may be too high. Any little miss and stocks are getting severely punished. Last week, shares of IBM (IBM) had their worst day in the company’s history. There’s even talk now of breaking up the company.

Shares of Netflix (NFLX) also got stomped on after it gave disappointing guidance. Interestingly, Netflix actually beat by one penny per share, but that wasn’t enough to stop traders from punishing the stock. Netflix used to be one of the superstar stocks (remember FAANG?). Not anymore. Over the last year, the stock has been cut in half.

If you think that’s bad, Danaher (DHR) had it even worse. The company beat earnings and raised guidance, but it still got knocked for an 11% loss today. Barron’s said DHR was headed for its worst loss in 30 years. The crime that Danaher committed? It said it expects its core revenue to grow slightly less than expected. That was enough for traders to nail the stock. The market gods reward, and they take away.

Shares of 3M (MMM) had a very good day today. The stock rallied 7.3% today after it beat earnings and raised guidance. I’ve thought that 3M is a good case study for investors. This has long been a very good company, but the stock did poorly for several years. From 2018 to 2023, the stock got chopped in half. No matter how long I waited, the stock went lower and lower.

3M finally turned around three years ago, and the stock is up around 150%. Still, it took a lot of patience. Even if you’re right on the stock, you can still get the timing wrong.

Last week, I tweeted, “If you had invested $10,000 in Apple on June 6, 1983, by April 17, 2003, you’d be sitting on $8,400.” You wouldn’t think these words would anger so many people, but welcome to social media.

Several responses told me that I was obviously wrong or that I failed to account for stock splits. Well, the numbers are right, and I did account for stock splits. For 20 years, an investment in Apple (AAPL) was dead money. It took time for Apple to turnaround, but it happened and Apple took off. Since then, Apple is up 130,000%.

(Note: the chart above doesn’t cover the first year of the time period I mentioned. That’s as far back as the data goes, but you can still see that Apple was not a big success at the time.)

Stock Focus: Ametek

Ametek (AME) is a stock I like to keep an eye on. I’ve come close to adding it to our Buy List. It’s not terribly well known, but it’s no small fry, either. The current market cap is about $55 billion, and it has more than 22,000 employees.

Ametek describes itself as “a leading global provider of industrial technology solutions serving a diverse set of attractive niche markets with annual sales of approximately $7.5 billion.” Ametek operates in several high-tech niches which gives them a “wide moat.”

The company’s objective is to produce “double-digit percentage growth in earnings per share over the business cycle and a superior return on total capital.” The company was founded in 1930, and it’s been a member of the S&P 500 for nearly a century. It was originally called American Machine and Metals but in the 1960s that turned into Ametek.

Ametek is divided into two groups, the Electronic Instruments Group and the Electromechanical Group. The Electronic Instruments Group produces advanced analytical, test, and measurement instrumentation. The Electromechanical Group supplies automation and precision motion control solutions, electrical interconnects, specialty metals, thermal management systems, motors and pumps.

The stock has been a huge winner over the years. Since 1990, AME is up more than 27,000% (including dividends). The stock recently hit a new all-time high. AME’s Q2 earnings report will be out on August 4 before the opening bell.

While I like Ametek’s business, the stock is a bit rich here. It’s currently going for about 27 times next year’s earnings.

That’s all for now. The Federal Reserve meets again next week. Don’t expect any changes to interest rates, but changes may be coming after Labor Day. Stay tuned. I’ll have more for you in the next issue of CWS Market Review.

– Eddy

Posted by on July 21st, 2026 at 6:09 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.