Market Insights Recap — Week of August 17, 2026

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

Low, medium and high. What do these mean for your portfolio? What should you be thinking about? 

Now before you think I'm talking about your ceiling fan. those refer to data, bonds and stocks. So the economy's in good shape. Layoffs are near record lows. The economic surprise indices, they're turning higher. June's consumer price index posted a lower 3.4% year-over-year rate. The Bureau of Labor Statistics claims fuel and medical costs went down last month. My wallet says different. Expect fuel costs to continue to rise this fall. Diesel supplies remain tight.

So I think we've seen the low in inflation for this year. And that's okay news for stocks but not really for bonds. The weak jobs and retail sales prints last month should have sent bond yields lower. But markets look ahead, and bonds see the Fed ending its T-bill buying program, record $2 trillion deficit and $6 trillion in federal debt maturing in the next year. So rates are going to continue to grind higher into the fall. Not on low, not on high, but a medium speed drift toward 5% for the ten-year Treasury. Slightly higher rates, persistent inflation is going to keep the Fed on hold. Expect current short-term rates to be kind of a floor right now.

The S&P 500, it's still in a bull. A 4% rise in August so far is very rare. August is usually flat for the whole month. Only 6% of new highs for the S&P 500 have occurred in August. Advanced decline line is good. Breadth is good. The bulls in gear. Usually folks are on vacation or buying crayons and lunchboxes, but this year they're buying stocks. At 50% in the second quarter, we've likely seen peak earnings growth. Like bonds, stocks look ahead about a year or so. And earnings growth continues to look strong.

So this is big box week. We get earnings from Walmart, Home Depot and Lowe's. Our indicator dashboard, it's green for stocks, yellow for rates. Cash and commodities continue to outperform bonds. So stay tuned, 'til next time.