August 2026 - EverPar Advisors

Q3 2026 Market Update: Record Highs, Real Earnings, & Your Portfolio

EverPar Director of Investments David Ellis breaks down what is driving markets to record highs, why the 30-year Treasury matters, and how we are positioning portfolios heading into September.

By David Ellis, EverPar Advisors

Every quarter there are a handful of things worth stepping back and addressing directly with clients. This quarter, the question I keep getting is some version of the same one: markets are at record highs, so how nervous should I be?

It is a fair question. We have had twenty-seven record closes this year, with the most recent record close coming in at 7,798.99, just below the 7,800 level the index also traded above intraday for the first time. We are sitting about one percent off that high after a strong summer. Michael Christian and I sat down to work through what is actually behind that, and I wanted to expand on a few points here.

What is Holding Up This Market

The most important thing to understand about this rally is that it is being driven by earnings rather than by enthusiasm.

Second quarter profits were up roughly 50% from the year before. Eighty-six percent of the companies that reported beat their expectations, against a five year average of 78%. Profit margins reached 16.9%, the highest level since FactSet began tracking that measure in 2009. Corporations in the US are functioning well, and that flows through to the broader economy.

The AI and data center cycle is part of this, and the earnings there are real rather than speculative. Nvidia’s earnings have roughly doubled over the past year. We do keep the concentration risk inside that leadership at the front of our minds.

Inflation also stopped getting worse. The July reading came in better than expected at a tenth of a percent, and producer prices were flat.

What is different about this market compared with the last two years is the breadth. Large cap, small cap, and international have all performed. All eleven S&P 500 sectors were positive on the year. That is a real change from 2023 and 2024, and it is the reason diversified portfolios have participated in this year’s gains rather than lagging them.

The Headwinds Worth Watching

I would be doing clients a disservice if I only covered the good news.

The 30-year Treasury hit 5.34% earlier this week, the highest it has been since 2007. The level matters less to me than the timing. We received encouraging inflation data in July and the long end of the curve continued to rise anyway. That tells you inflation is not what is pushing those rates higher. It is a supply issue. Washington ran a $432 billion deficit in July, the largest single month since March of 2021.

The way that reaches your portfolio is straightforward. When long rates rise, a dollar of future earnings is worth less today, and that hits long duration growth names hardest. Those are the same names that have been leading this market.

The Treasury stepped in and doubled buybacks on long dated debt, and the 30-year came back to about 5.2%. So this may not become a problem. But if long yields keep rising while the short end stays where it is, the high growth names are the ones most affected.

The labor market is the second item, and it is something of a catch-22. Weaker readings signal The labor market is the second item, and it is something of a catch-22. July payrolls fell by 23,000 against expectations of a gain, and revisions stripped roughly another 100,000 jobs out of May and June combined. Labor force participation eased to its lowest level since early 2021. Weaker readings signal a slowing economy. They also give the Fed cover to leave short term rates alone, because the Fed is weighing the labor market and inflation together.

The third is energy. Brent is back near $90 with the Strait of Hormuz closed and no talks currently scheduled. We do not expect these prices to hold long term. Once there is some resolution there, oil should come down fairly quickly and filter through to the pump. In the near term it is a headwind.

Headline Against Core Inflation

This is where the two numbers tell different stories, and it is worth understanding the difference.

Headline inflation is running about 3.4% year over year. Core inflation, which strips out food and energy, is at roughly 2.5%, the lowest in about five months. Energy prices remain up nearly 15% from a year ago, which is most of what is driving the gap between headline and core.

A year ago the conversation about inflation was about the print itself. Today it is about what inflation is doing to household budgets. Wage growth is running 3.2% against headline inflation of 3.4%. That is a modest gap, but on the math it works out to negative real income growth. July retail sales fell six tenths of a percent when a modest gain was expected. The consumer is starting to face a wall, and if consumers step back meaningfully, that works its way into earnings.

A New Fed Chair, and Less Forward Guidance

The Fed held its target range steady all year, and the July meeting marked the fifth consecutive hold. The committee voted nine to three, with all three dissents preferring a quarter point hike, the first time in nearly a decade that three dissents have landed in the same direction.

Chairman Warsh has said he thought there was too much transparency coming out of the Fed, and that the number of voices created more confusion than clarity. He intends to limit that. My own view is that this is a positive for markets.

On rates, the market is currently pricing roughly a 33% chance of a hike in September. The July meeting produced a nine to three vote, with three members favoring a hike, so there is a portion of the board looking to get closer to that 2% inflation target. Warsh has said he wants the data to drive the decision.

I would not say rates are going higher or lower because of who is running the Fed. He has answered plenty of questions in ways that run counter to what the administration would prefer. I think he does what he believes is right for the Fed and for the country. It is entirely possible we get through this year without a hike at all.

The inflation report lands September 11 and the Fed meets September 16, so the committee will have those numbers in hand.

How We Are Positioned

Our posture right now is to stay diversified across sector and size, and to avoid concentrating in the leadership of the S&P 500 even though that leadership has been earning its returns. On fixed income we are being deliberate about duration and prefer the intermediate space rather than reaching further out on the curve.

The Bottom Line

Real earnings, real capital investment, inflation moving in the right direction, and improved breadth. That is a reasonable foundation for a market at these levels. The long end of the curve is the thing I am watching most closely, and we got some relief there this week with the Treasury stepping in.

We will take in the September inflation report and the Fed meeting, and adjust from there. If you have questions about how any of this applies to your situation, reach out to your advisor directly.

Sources:

-S&P 500 record close of 7,798.99 (27th of the year): CNBC market report, corroborated by Seeking Alpha and Schaeffer’s. Link: cnbc.com/2026/08/13/stock-market-today-live-updates.html

-Q2 profit growth about 50 percent, 86 percent beat rate vs 78 percent five year average, 16.9 percent profit margin: FactSet Earnings Insight, 7 August 2026. Link: insight.factset.com

-Nvidia earnings roughly doubled: analyst commentary reported in press coverage of the AI earnings cycle, not verified against a company filing

-July CPI up a tenth of a percent: Bureau of Labor Statistics, CPI news release, July 2026. Link: bls.gov/news.release/cpi.nr0.htm

-Producer prices flat in July: Bureau of Labor Statistics, PPI news release, July 2026. Link: bls.gov/news.release/ppi.nr0.htm

-All eleven S&P 500 sectors positive year to date: U.S. Bank Asset Management Group market commentary, data as of 10 to 11 August 2026. Link: usbank.com

-30-year Treasury at 5.34 percent, highest since 2007: press coverage of the 18 August session. Note that this figure varies slightly by source and timestamp.

-432 billion dollar July deficit: U.S. Treasury, Monthly Treasury Statement. Link: fiscaldata.treasury.gov/static-data/published-reports/mts/

-Treasury doubling buybacks, 30-year easing to about 5.2 percent: reported same day as the announcement, 19 August 2026. Confirm current level before publishing, as this was breaking news at time of writing.

-July payrolls down 23,000, May/June revisions down about 100,000 combined, labor force participation at 61.4 percent (lowest since early 2021): Bureau of Labor Statistics, Employment Situation, July 2026. Link: bls.gov/news.release/empsit.nr0.htm

-Brent crude near $90, Strait of Hormuz closed: press coverage, 18 to 19 August 2026. Note this is a live market figure and should be re-checked before publishing.

-Headline inflation 3.4 percent, core inflation 2.5 percent, energy up nearly 15 percent year over year: Bureau of Labor Statistics, Consumer Price Index, July 2026. Link: bls.gov/news.release/cpi.nr0.htm

-Wage growth 3.2 percent: Bureau of Labor Statistics, Employment Situation, July 2026. Link: bls.gov/news.release/empsit.nr0.htm

-July retail sales down six tenths of a percent: U.S. Census Bureau, advance retail sales, July 2026. Link: census.gov/retail

-Fed target range unchanged all year, July vote 9 to 3, three dissents favoring a hike: Federal Reserve, FOMC statement, 29 July 2026. Link: federalreserve.gov/newsevents/pressreleases/monetary20260729a.htm

-September rate hike odds moving from about 80 percent to 30 to 35 percent: CME FedWatch Tool. Link: cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html. Re-check the morning of publishing, as this figure moves.

-September 11 inflation report and September 16 Fed meeting: Federal Reserve FOMC calendar and BLS CPI release schedule. Links: federalreserve.gov/monetarypolicy/fomccalendars.htm and bls.gov/schedule/news_release/cpi.htm

All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability, or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.

The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.

The views expressed in this commentary are subject to change based on market and other conditions. This commentary may contain certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.

Can I Retire with $2.4M? A Case Study on the 5 Levers of Retirement

We built a hypothetical couple from patterns we see across real clients to show how retirement planning actually works, lever by lever.

By Courtney Hoffman, CFP®, AAMS™ EverPar Advisors

We get some version of the same question all the time. Do we have enough to retire? The honest answer is that the number on your statement doesn’t tell you much on its own. So instead of using one client’s real numbers, we built a hypothetical couple, Dave and Susan, out of patterns we see across a lot of client conversations, and used their situation to walk through what actually goes into a retirement plan.

Meet Dave and Susan: A Hypothetical Case Study

Dave is 61 and burned out. He’s ready to stop working. Susan is 60 and wants to retire alongside him rather than one of them sitting at home while the other keeps working. Their home is paid off and worth $500,000. They’re both healthy, and they want $100,000 a year in net income, with plans to travel more in the early years of retirement.

Their portfolio sits at $2.4 million. On paper, that sounds like a reasonable place to retire from. Whether it actually works depends on how well a handful of moving pieces get coordinated, not just the size of the number.

Where the Money Sits: A $2.4 Million Portfolio Breakdown

Before we can talk about spending, we have to talk about taxes, because not all $2.4 million is created equal. Here’s how Dave and Susan’s portfolio breaks down:

1.5 million dollars sits in 401(k) and IRA accounts. This is tax deferred, meaning every dollar withdrawn is taxed at ordinary income rates.

500,000 dollars sits in a taxable brokerage account, taxed at capital gains rates and generally more flexible to access.

250,000 dollars sits in a Roth IRA, which grows and can be withdrawn tax free.

150,000 dollars sits in cash or money market funds, their emergency reserve.

This is a very typical distribution for a pre-retiree. Most people accumulate the bulk of their savings pre-tax through an employer plan, then build an after-tax reserve alongside it. Where the money sits changes almost everything about how a plan gets built.

The Five Levers of Retirement Planning

Once we know the guaranteed income sources and the account breakdown, the real planning work comes down to coordinating five levers over the next 10 to 15 years. It’s not a switch that gets flipped the day someone retires. It’s an ongoing process.

Lever 1: Spending Isn’t a Hard Number

Most people have heard of the 4 percent rule, introduced by Bill Bengen in 1994. On Dave and Susan’s 2.4 million dollar portfolio, that works out to about 96,000 dollars a year. Morningstar’s most recent base case suggests 3.9 percent, or 93,600 dollars, though that assumes rigid, inflation adjusted spending. In practice, a safe withdrawal rate can run anywhere from around 4 percent up toward 6 percent as required minimum distributions increase over time.

Dave and Susan’s target of 100,000 dollars a year works out to about 4.2 percent of their portfolio, which sits within a reasonable range. But the real point is flexibility. The plan should be able to adjust up or down with market returns, rather than locking in one number and refusing to move. The number on your statement isn’t what tells you whether you can retire. The plan is.

Lever 2: Bridging the Healthcare Gap

Healthcare is often the biggest surprise for people retiring before 65. Dave has a four year gap until Medicare begins, with no employer plan to bridge it. For 2026, the ACA’s enhanced premium tax credit has expired and the 400 percent poverty subsidy cliff is back, which means marketplace premiums for a couple in their early sixties can run well into 2,000 dollars a month, or 24,000 dollars a year, on top of the 100,000 dollars they need for everyday spending.

The planning tension here is real. Keeping taxable income under the subsidy threshold, around 85,000 dollars for a couple, works directly against doing Roth conversions in the same years. Solving for both at once is one of the more delicate parts of the plan.

Lever 3: When to Claim Social Security

There’s no single right answer here, only trade offs. If Dave claims at 62, he protects the portfolio early but locks in the lowest benefit, at a little over 2,300 dollars a month, and shrinks Susan’s potential survivor benefit. If he waits until 70, he gets the largest guaranteed, inflation adjusted benefit, around 4,100 dollars a month, and maximizes what Susan could receive as a survivor. The break even point for waiting typically falls in the mid to late 80s.

The decision usually comes down to whether the priority is preserving the portfolio for beneficiaries or securing guaranteed income for as long as possible. There isn’t a universal right answer, only the one that fits a given family’s goals.

Lever 4: The Tax Bomb and the Roth Conversion Window

Because Dave was born after 1959, his required minimum distributions won’t begin until age 75. That gives him a long runway, from 61 to 75, and the years where he isn’t earning a paycheck are the richest tax planning years of his life.

For 2026, the standard deduction for married couples filing jointly is 32,200 dollars, and the 12 percent tax bracket runs up to 100,800 dollars of taxable income. The strategy is to fill up whatever bracket makes sense each year with Roth conversions, paying tax now at a known, lower rate instead of later at an unknown, possibly higher one. If that 1.5 million dollars in pre-tax accounts doubles or triples by age 75, the required withdrawals could push Dave and Susan into a much higher bracket, and trigger IRMAA surcharges on Medicare, which currently begin around 218,000 dollars for a couple.

There’s also a temporary boost worth knowing about. The Big Beautiful Bill Act added a 6,000 dollar per person senior deduction starting at 65, available through 2028 with a phase out at 150,000 dollars, which quietly widens the conversion window for a few years.

Lever 5: Sequence of Returns Risk

The first five years of retirement matter more than almost any other stretch. The same average return, in a different order, can produce very different outcomes. If Dave and Susan retire and the market drops significantly in year one, that’s one of the biggest risks to the whole plan, especially if they’re withdrawing on the higher end of the safe range.

This is where their 150,000 dollar cash reserve earns its keep. It acts as a buffer, along with spending guardrails, so they aren’t forced to sell shares at a loss just to generate income during a downturn. Selling into a down market to generate the same dollar amount consumes more of the portfolio. Selling into an up market is just harvesting gains. That difference, repeated over years, is what sequence of returns risk really means.

So, Can Dave and Susan Retire?

The honest answer is a qualified yes. Yes, if the levers get used well. Spending holds near 100,000 dollars a year, with room to flex. The healthcare bridge to 65 is funded and income is managed around it. Social Security is claimed strategically rather than by default. The Roth conversion window gets used before RMDs begin at 75. And the portfolio keeps a growth sleeve instead of turning conservative the moment retirement starts.

It tips toward no if spending is rigid at 140,000 to 150,000 dollars, if Social Security gets claimed without weighing the other factors, if a market drop early on meets a plan with no cash buffer, or if the 1.5 million dollars in pre-tax accounts gets ignored until age 75 and detonates into a tax and IRMAA problem all at once.

The question of whether 2.4 million dollars is enough to retire on doesn’t have a real answer by itself. The plan is what answers it.

If you’re wondering how your own numbers hold up against these same five levers, we’d love to help you find out. Schedule an introductory strategy session at everpar.com.

EverPar Advisors is a Registered Investment Adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. This article is for informational and educational purposes only. It is not intended as investment, tax, or legal advice. Consult with a qualified professional before making any investment decisions. Past performance is not indicative of future results.

Month: August 2026