Q2 2026 Client Letter

Q2 2026 Client Letter – July 8th, 2026

Market Recap

Common Themes Of 2026 So Far

• The Equity markets started the year off strong, then saw declines during the Iran conflict, but have more than recovered since

• Company earnings have been strong across the board, which has been the primary driver of where the market is to this point.

• The Fed hasn’t been able to drastically reduce interest rates

  • This is largely due to inflation being slightly high and employment data being largely neutral

• The market loves certainty

  • The more businesses know the “rules of the game”, the easier they could plan, the more they could focus on increasing profits, leading to higher values

• Diversification has been a helpful component of overall investment strategies so far this year 

  • Returns have largely been consistent with risk tolerance

• The Equity market is near all-time highs

• Top performing areas in Equities have been Value, Small Cap, International, and Mid Cap

  • Growth equities have lagged a little so far this year

Market Outlook

Equity Market

• Earnings/Valuation

• The S&P 500 is currently trading around 7,500 (WSJ) and the estimated earnings are around $340/share for 2026(Goldman Sachs). 

• If we use $340/share and divide that by 7,500 price we come to about a 4.53% earnings yield on the S&P 500. 

• Earnings for 2027 are estimated to be $385/share (Goldman Sachs).   

• If we use $385/share and divide by 7,500 price we come to about a 5.13% earnings yield on the S&P 500. 

• The 10-year treasury is currently sitting around 4.46% (Bloomberg). 

• What does this tell us?

• The market at its current 7,500 level has already priced-in next year’s earnings expectations

• For the market’s valuation to become more attractive, we would like to see more of a difference in the earnings yields and 10-year treasury yield

• How Do We Position Ourselves With This Information?

  • This depends on your particular situation 

  • People with long-time horizons may not need to make material changes 

• What Areas Do We Like?

  • The equity market offers fewer lower-priced opportunities at current levels

  • International equities are trading at lower valuation levels

  • We see opportunities in Mid Caps and Small Caps

• What Are We Looking For?

  • We’re looking for opportunities to buy areas of the market at attractive prices

Fixed Income

• Where Are We Now?

• The Fed Funds rate (short term rate) sits around 3.75%, down from 4.5% a year earlier (Bloomberg)

• The 10 Year Treasury sits around 4.46%, up from about 4.24% a year ago (Bloomberg)

• The 30 Year Treasury sits around 4.96%, which is up from about 4.% a year ago (Bloomberg)

• We are in a more normal interest rate environment which is a good thing overall

• What Areas Do We Like?

  • We see opportunities in Fixed Income

  • Primarily due to prevailing yield levels

  • Fixed income may hold its value better in a market correction

    • We will review your portfolio to determine possible outcomes

• Municipal bond funds, investment grade, and high yield may have some opportunities

Economy

• Growth

• The US economy grew by 2.1% in Q1 2026 (US Bureau of Economic Analysis)

• The S&P 500 is up in the low double digits so far in 2026 (WSJ)

• Just showing that there is usually a disconnect between the economy and the equity market 

• Unemployment

• The unemployment rate stands at around 4.2% as of June 2026 (Bureau of Labor Statistics)

  • Down from 4.4% from February 2026

  • Employment data has been relatively strong

  • Not point to signs of a recession but more an economic expansion

• This is a big reason why it’s tough for the Fed to cut rates

• Politics/Geopolitics

  • The conflict in Iran had the most significant impact on markets earlier this year but the market has largely shrugged this off in recent months

    • Mainly because projected company earnings are very strong

  • We continue to monitor these world events and see most market corrections as an opportunity to buy

• The Fed and Interest Rates / Inflation

  • The Fed has kept its overnight rate/short term rate at 3.75%

  • Core PCE Inflation came in at 3.4% in May 2026

    • This is the Fed’s preferred measure

    • Still much higher than where they would like to see it

  • We don’t see a reason for rates to be significantly reduced

    • We feel you would need to see significant unemployment or a dramatic reduction in inflation

    • We haven’t seen this happen

  • We also don’t see a reason for rates to be significantly increased

    • Inflation would have to be much higher

    • Employment data would also have to be much more positive

• Any client feeling uncertain about where they stand or haven’t been in in a while is encouraged to setup an annual review with their advisor

• Annual reviews are a great way to stay on track to hit your individual goals

• Please contact our office to do so 

• We are continuing to grow our team to serve you as best as we can

• Our team effort has been outstanding, and we look forward to our next chapter

• As always, thank you for your continued trust in us

• None of this is possible without you

• Feel free to pass this letter along to anyone you think it may help

• We also can’t thank you enough for passing along our info to your friends/family/colleagues

  • Referrals are the backbone of our business

• We hope you have a wonderful summer!

Sincerely,

Oujo Wealth Strategies

1540 Highway 138, Suite 106, Wall, NJ 07719

Main | 732-556-4200

Fax | 732-681-4479 

OujoWealthStrategies.com

All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful.

Past performance is not an indication or guarantee of future results.

Additional risks are associated with international investing, such as currency fluctuations, political and economic stability, and differences in accounting standards.

The return and principal value of bonds fluctuate with changes in market conditions. If bonds are not held to maturity, they may be worth more or less than their original value.

The return and principal value of stocks fluctuate with changes in market conditions.  Shares when sold may be worth more or less than their original cost.

S&P 500 – A capitalization -weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

A diversified portfolio does not assure a profit or protect against loss in a declining market.

Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing.

 The views stated in this letter are not necessarily the opinion of Cetera Wealth Services, LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results

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