Market Insights Recap — Week of August 10, 2026

Hello, I'm Steve Orr, Chief Investment Officer for Texas Capital's Private Bank.

Jobs. Prices. Earnings. What do these mean for your portfolio? What should you be thinking about?

Well, first off, the jobs number. Last Friday's jobs report looked like a bit of a downer. Payrolls declined by 23,000 jobs. And you mean employment contracted in a solid second gear economy driven by an AI building boom? Well, that's what the stats and models came up with. But if you dig into the numbers, they tell a different story. And when you're an economist and you have a personality like sheetrock, you have time to do this. Local government education fell by 49,000. That's the largest since virus shutdowns five years ago.

Education. It's measured by expiring teacher contracts. Kind of a lull in the summer. As soon as those lunch boxes get filled, those numbers are going to reverse.

Leisure and hospitality lost 40,000 jobs. And here's where that model stuff comes in. A lot of hiring earlier in the year for World Cup and 250. Usual July leisure hiring did not appear. The BLS models just assumed those jobs disappeared. Key for our portfolios is private sector payrolls. And they show positive growth 16 of the last 24 months and for the last five months straight. So companies are hiring but at a modest pace.

Inflation. It cooled a bit over the summer thanks to crude oil releases from the strategic oil reserve. Those are largely tapped out. Now thanks to the Ukraine and Iran wars, a diesel squeeze is coming our way. That's going to affect prices of everything that rides in a truck or a train. And this week, the consumer price index will come in close to 3.5%. We think it's going to push towards 4% this fall. ISM surveys of service and manufacturing businesses continue to slowly improve from last year's slowdown. 

Overall, the economy remains in good shape, driven by capital expenditures on plant equipment. And of course, that AI data center and server boom. Solid economy, growing earnings means good portfolio performance down the road. 

And speaking of earnings, wow. Second quarter pretty much behind us, Looking at second quarter versus second quarter of 2025. Earnings up 50.4%. Now if you take away Google and Amazon's adjustments to their income statement, you only get 32% growth in earnings. Now remember, we like over the long haul to have earnings grow double inflation. Inflation at three and a half. Earnings at 7%. Solid no problem. But we're on our seventh quarter right now of double digit earnings gains. This is an earnings-led boom. And analysts are marking up earnings estimates for the rest of the year.

So it's a very good time to be invested. And we think with your portfolios, you should be just like we're set up: long stocks, light on interest rates, light on cash. So stay invested. Till next time.