Equity Market Commentary - August 2026

Despite market distractions, the author believes the S&P 500 has significant upside, driven by upward reevaluation of 2027 earnings. Current projections of nearly $415 per share could push the index well north of 8,000 by year-end 2026. Company guidance remains robust, suggesting further positive earnings revisions are likely.

The author remains committed to large-cap tech, specifically Nvidia and Google, despite their recent underperformance. He argues their fundamentals have significantly exceeded expectations, and stock prices should eventually reflect this. This position has hurt recent portfolio performance, but patience is warranted as companies invest for the future, a strategy Wall Street often overlooks.

The primary risk to the bullish equity thesis is the Federal Reserve potentially raising rates. Higher rates would likely stifle P/E expansion, hurt speculative stocks, and benefit financials. Controlling risk is paramount in this environment. The author sees no signs of market euphoria, indicating a major bull market cycle has not yet ended.