The Markets
Reading the economic tea leaves.
The stock market is forward-looking, which means that it reflects investors’ expectations for the future.1 No one knows exactly what will happen in the months ahead, but investors try to gain an edge by interpreting economic information. Last week, we saw information about inflation, consumer spending, and consumer sentiment push the market in different directions. Here’s what happened:
Markets rejoiced that inflation slowed
Markets celebrated mid-week when the Consumer Price Index showed price increases slowed slightly in July 2026.2
- Headline inflation was 3.4 percent year over year, down from June’s 3.5 percent.
- Core inflation, which excludes volatile food and energy prices, was 2.5 percent year over year, down from 2.6 percent in June.
Even though prices continued to rise faster than the Fed’s target of 2 percent, “Back-to-back gains in equities drove the [Standard & Poor’s 500 Index] S&P 500 to a record…[the] tame inflation print, paired with last week’s softer-than-expected jobs report, will give Fed Chair Kevin Warsh more breathing room, and may just be enough to keep rates on hold,” according to a source cited by Rita Nazareth of Bloomberg.3
Markets lamented slumping retail sales and consumer sentiment
Investor optimism tempered later in the week when the retail sales report suggested consumer spending declined in July.4 Normally, consumer spending is the fuel that powers the United States economy. The weak sales report in tandem with the previous week’s sluggish jobs report raised concerns that the economy could be slowing, reported Anne D’Innocenzio of the AP.5
On Friday, investors learned that consumers are not optimistic. The University of Michigan released its preliminary report for August, which showed consumer sentiment falling sharply. Surveys of Consumers Director Joanne Hsu wrote:
“Consumer sentiment fell about 8 percent this August, ending two consecutive months of improvement. While views of personal finances saw only minor declines, expected business conditions sank 11 percent for the short run and 17 percent for the long run. Decreases in sentiment were seen across the political spectrum, with Republicans exhibiting the strongest month-to-month decline in August.”6
The S&P 500 and Nasdaq Composite Indexes finished the week higher, while the Dow Jones Industrial Average fell.7 The yield on the 30-year U.S. Treasury bond was 5.25 percent at the end of last week.8
Data as of 8/14/26 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | 0.4% | 13.7% | 20.4% | 20.1% | 11.7% | 13.5% |
| Dow Jones Global ex-U.S. Index | 1.2 | 15.0 | 23.9 | 17.0 | 6.5 | 6.8 |
| 10-year Treasury Note (yield only) | 4.7 | N/A | 4.3 | 4.2 | 1.3 | 1.6 |
| S&P GSCI Gold Index | 0.9 | 2.2 | 31.2 | 31.7 | 19.9 | 12.7 |
| Bloomberg Commodity Index | 2.8 | 23.4 | 35.4 | 8.8 | 7.3 | 4.7 |
S&P 500, Dow Jones Global ex-US, S&P GSCI Gold Index, Bloomberg Commodity Index returns exclude reinvested dividends. The three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
BOND MARKETS WERE READING THE TEA LEAVES, TOO. Stock investors weren’t the only ones weighing last week’s economic news. The bond market was considering the same signals.
Normally, lower inflation would result in lower yields on U.S. Treasuries, and rates did ease briefly. Late in the week, though, the U.S. government issued 30-year bonds with the highest interest rate since 2001, reported Greg Ritchie of Bloomberg.9
Bond market seems to be less concerned about this month’s inflation data than it is about the level of government debt and the risk of ongoing “supply shocks” that could keep prices elevated for years, according to a source cited by Martin Baccardax of Barron’s.10
Growing government debt. The U.S. has a long history of spending more than it takes in. “This year, the United States hit an unfortunate fiscal milestone as the national debt grew larger than the size of the economy. Federal debt held by the public is projected to reach 101 percent of gross domestic product (GDP), the highest level since World War II. Worse, it is projected to reach an all-time high of 120 percent by 2036,” reported the Peter G. Peterson Foundation.11
High debt levels mean the government must commit a higher share of revenue to pay interest, which reduces the amounts available for other spending. That can lead to higher deficits and even more debt.12
Persistent supply shocks. Supply shocks happen when goods become scarce, pushing prices up and economic growth down. The Bank for International Settlements, an organization owned by the world’s central banks, warned that these shocks are arriving more often and hitting harder.13
“Those shocks, including the massive surge in semiconductor costs, the power demand linked to rollout of AI-powered data centers, and the spikes in global crude prices tied to the U.S. war with Iran, are all evident in the current market mindset,” reported Baccardax.10
That has real consequences for investors. Normally, bonds help cushion a portfolio when stocks fall. When supply shocks dominate, that cushion can weaken, and stocks and bonds may lose ground at the same time, according to the Federal Reserve Bank of San Francisco.14
Despite strong earnings, the path ahead may be bumpier for stock and bond markets than most would prefer. Staying disciplined, diversified, and focused on long-term goals is more important than ever.
WEEKLY FOCUS – THINK ABOUT IT
“I haven’t a clue how my story will end, but that’s all right. When you set out on a journey and night covers the road, that’s when you discover the stars.”15― Nancy Willard, Author
* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.
* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
Sources:
1 https://www.investopedia.com/investing/how-interest-rates-affect-stock-market/
2 https://www.bls.gov/news.release/cpi.nr0.htm
3 https://www.bloomberg.com/news/articles/2026-08-12/stock-market-today-dow-s-p-live-updates or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/08-17-26-Bloomberg-S&P-Hits-All-Time-High%20-%203.pdf
4 https://www.census.gov/retail/marts/www/marts_current.pdf
6 https://www.sca.isr.umich.edu
7 https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/08-17-26-Barrons-DJIA-S&P-Nasdaq%20-%207.pdf
9 https://www.bloomberg.com/news/articles/2026-08-13/us-braces-for-30-year-bond-auction-at-highest-yield-since-2001 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/08-17-26-Bloomberg-Costliest-US-Bond-Sale%20-%209.pdf
10 https://www.barrons.com/articles/bonds-stock-market-federal-reserve-c93aded3
11 https://www.pgpf.org/article/can-we-grow-our-way-out-of-the-national-debt/
12 https://www.pgpf.org/our-national-debt/
13https://www.bis.org/publ/arpdf /ar2026e1.htm or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/08-17-26-Barrons-Bonds-Got-Scorched%20-%2013.pdf
The Markets
The rally continues.
A lot of factors influence the United States stock market, including economic trends, market sentiment, and government and Federal Reserve (Fed) policies. However, many investors consider earnings, which reveal how profitable a company is after paying expenses, one of the most important indicators of company and market health.
Companies have been more profitable than analysts expected.
In 2026, most companies in the Standard & Poor’s (S&P) 500 Index have delivered higher-than-expected profits. John Butters of FactSet reported:
- From January through March 2026, overall S&P 500 earnings grew 28.6 percent year over year, and 85 percent of companies in the Index reported higher-than-expected earnings.1
- From April through June 2026, overall earnings grew 50.4 percent year over year. Much of that resulted from unusually large earnings at two of the largest companies in the Index. When they’re excluded, growth was still 32 percent year over year.2
Analysts expect profits to keep growing in 2026.3
The pace of hiring and wage growth has slowed.
The availability of jobs and the size of paychecks shape how Americans feel and how they spend. That’s important because consumer spending is a primary driver of economic growth in the United States.
- The number of new jobs needed to maintain full employment is uncertain because it depends on immigration numbers. Last year, Alexander Bick of the Federal Reserve Bank of St. Louis explained that immigration “is a significant source of labor for the U.S. economy.” He estimated that much lower immigration projections had cut the optimal number of jobs from more than 150,000 a month to a range of 32,000 to 82,000.4 His newest estimate is 15,000 to 87,000.5
Last week, the Bureau of Labor Statistics (BLS) reported that unemployment remains low by historical standards, even though job growth remains modest. Employers cut 23,000 jobs in July and just 34,000 jobs a month were added, on average, over the last year.6 That pace falls within Bick’s breakeven range, which helps explain why unemployment has stayed low even as hiring slowed.
- The report also showed average hourly pay rose 3.2 percent over the year through July 2026.6 Inflation eased some over that period, slowing to 3.5 percent in June from 4.2 percent a month earlier.7 Even so, wages have not kept pace with prices.
For now, strong earnings are carrying the market, hiring is slowing without stalling, and inflation is cooling even if paychecks have yet to catch up.
Last week, major U.S. stock indexes gained.8 Yields on longer maturities of U.S. Treasuries moved lower after the weaker-then-expected employment report raised “fresh concerns about the labor market while dimming the immediate outlook for higher Fed interest rates,” reported Yun Lee, Sean Conlon, and High Leasak of CNBC.9, 10
Data as of 8/7/26 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | 3.6% | 13.3% | 22.4% | 19.7% | 11.9% | 13.5% |
| Dow Jones Global ex-U.S. Index | 1.8 | 13.6 | 24.1 | 15.9 | 6.2 | 6.9 |
| 10-year Treasury Note (yield only) | 4.7 | N/A | 4.2 | 4.1 | 1.3 | 1.6 |
| S&P GSCI Gold Index | 7.1 | 1.4 | 27.4 | 30.7 | 20.6 | 12.6 |
| Bloomberg Commodity Index | -0.2 | 20.1 | 30.8 | 7.6 | 7.2 | 4.6 |
S&P 500, Dow Jones Global ex-US, S&P GSCI Gold Index, Bloomberg Commodity Index returns exclude reinvested dividends. The three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
WHAT DO YOU KNOW ABOUT BACK-TO-SCHOOL TIME? The shock of an early alarm after sleeping in all summer, the smell of old textbooks, and that fluttery mix of dread and excitement about who you’d sit next to in homeroom. Whether your first day of the new school year involved a chalkboard, an overhead projector, or a smartboard, one thing united many of us: the sensory overload of a crowded school hallway as everyone caught up after a few weeks off. With the school buses rolling out again, it is the perfect time for a pop quiz. This quiz won’t be graded, there’s no permanent record, and you absolutely do not need a calculator.
- According to the Merriam Webster Dictionary, the English word “school” traces back to the ancient Greek word “scholē.” Somewhat ironically, what did that original Greek word mean?11
- A. A place of gathering
- B. Leisure time
- C. Strict discipline
- D. The pursuit of wisdom
- According to a 2025 AdoptAClassroom.org survey, about how much of their own money did the average U.S. teacher spend on classroom supplies during the 2024–25 school year?12
- A. About $300
- B. About $550
- C. About $895
- D. About $1,500
- Recognized by the Guinness Book of World Records as the “oldest existing and continually operating educational institution in the world”, the University of Karueein was established in 859 AD. Where is the university located?13
- A. Bologna, Italy
- B. Oxford, England
- C. Fez, Morocco
- D. Athens, Greece
- In 1939, school transportation officials met to establish “national construction standards for the American school bus,” reported Bryan Greene of Smithsonian Magazine. Today, most U.S. school buses are painted the same color, which is officially known as “National School Bus Glossy Yellow.” What was the main reason this particular shade was chosen?14
- A. It contrasts sharply with red stop signs and traffic signals
- B. It’s an easy color for the human eye to see
- C. It resists fading and hides road dirt better than darker colors
- D. It matched the color already used on U.S. postal and government vehicles
Whether you aced every question or found a few to be challenging, we hope this quiz brought a smile to your day. Any time you have questions about financial matters, please get in touch.
WEEKLY FOCUS – THINK ABOUT IT
“An investment in knowledge pays the best interest.”15
― Benjamin Franklin, Founding Father, scientist, and inventor Answers: 1) b; 2) c; 3) c; 4) b
* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.
* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss. * Consult your financial professional before making any investment decision.
Sources:
1 https://insight.factset.com/earnings-insight-infographic-q1-2026-by-the-numbers
6 https://www.bls.gov/news.release/empsit.nr0.htm
8 https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/08-10-26-Barrons-DJIA-S&P-Nasdaq%20-%208.pdf
11 https://www.merriam-webster.com/dictionary/school [Etymology]
12 https://www.adoptaclassroom.org/2025/06/09/2025-teacher-survey-spending-stats-classroom-needs/
13 https://www.guinnessworldrecords.com/world-records/oldest-university
14 https://www.smithsonianmag.com/history/history-how-school-buses-became-yellow-180973041/ or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/08-10-26-Smithsonian-History-of-How-School-Buses%20-%2014.pdf
15 https://www.brainyquote.com/quotes/benjamin_franklin_141119
The Markets
Federal Reserve (Fed) Chair Warsh shakes the market’s confidence.
Former Fed Chair Ben Bernanke has said that “monetary policy is 98 percent talk and only 2 percent action.” He meant that public statements are powerful tools that can shape the market’s expectations around future Fed actions.1 That proved true last week, when the Fed appeared to lose credibility during a relatively brief press conference held by its new Chair Kevin Warsh.
The Fed did what markets expected, but the new Chair did not
The Federal Open Market Committee (FOMC) met last week to determine a path for interest rates. In its post-meeting statement, the committee confirmed:
- Inflation remains high.
- The Fed is committed to bringing it lower.
- Most voting members were not ready to raise thefederal funds rate yet.2
That was exactly what Wall Street expected,3 and stocks experienced a brief relief rally, reported Connor Smith of Barron’s.4 Then, during the press conference, “Federal Reserve Chairman Kevin Warsh explained his decision to keep rates steady with a series of contradictory, confounding, and supremely confident answers to reporters’ questions,” reported Alex Rosenberg of Barron’s.5
Bond markets pushed Treasury rates higher
After Chair Warsh’s comments, the bond market expressed its opinion. Yields on longer U.S. Treasuries moved sharply higher. “Benchmark 30-year Treasury bond yields, the market’s best representation of long-term inflation risks and expanding government deficits, are trading at the highest levels since 2007,” reported Baccardax.6
Higher interest rates can help slow the rate of inflation by making borrowing more expensive and reducing demand for goods and services.7 Often, the FOMC increases the federal funds rate to accomplish this. In this case, it was the work of bond vigilantes, investors who think inflation risks are greater than the rest of the market assumes, and who act on that belief, reported Martin Baccardax of Barron’s.6
Higher rates mean higher interest payments on the national debt
Since the U.S. government borrows to fund the national debt by issuing Treasuries, higher rates also will increase the amount of interest the U.S. government pays to finance the debt. The Peter G. Peterson Foundation reported:
“As the national debt grows and interest rates rise, the United States will spend more of its budget on the cost of servicing that debt — crowding out opportunities to invest in the economy. Interest costs are set to become the fastest-growing part of the federal budget and will total $16.2 trillion in the next 10 years alone, according to the CBO [Congressional Budget Office].”8
It was a tumultuous week for U.S. stocks, too. Major indexes moved lower during the week before rebounding to finish the week higher.9
Data as of 7/31/26 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | 1.1% | 9.4% | 18.2% | 17.7% | 11.3% | 13.2% |
| Dow Jones Global ex-U.S. Index | 1.8 | 11.6 | 24.2 | 14.4 | 5.8 | 6.7 |
| 10-year Treasury Note (yield only) | 4.8 | N/A | 4.4 | 4.0 | 1.2 | 1.5 |
| S&P GSCI Gold Index | -0.6 | -5.4 | 22.7 | 26.9 | 17.7 | 11.7 |
| Bloomberg Commodity Index | -2.1 | 20.4 | 30.5 | 7.2 | 6.6 | 4.8 |
S&P 500, Dow Jones Global ex-US, S&P GSCI Gold Index, Bloomberg Commodity Index returns exclude reinvested dividends. The three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
THE RETIREMENT BALANCING ACT. The amount of income you receive in retirement will depend on a lot more than your Social Security benefits and distributions from your retirement savings accounts. The rules governing Medicare, Social Security, and taxation are complex and can have unexpected effects on retirement income for those who are unfamiliar with how they work together.
Some Medicare costs are deducted from Social Security benefits
While most of the changes to Medicare and Social Security for 2026 and 2027 are relatively modest, they illustrate how one program can affect another. Take Social Security. The average monthly retirement benefit is projected to increase by about $75 in 2027 if the projected 3.6 percent cost-of-living adjustment (COLA) holds, according to Deirdre Shesgreen of AARP. The purpose of the annual COLA is to help benefits keep pace with inflation over time.10
Medicare costs also are expected to increase in 2027. The Medicare Trustees Report projects that the standard Medicare Part B premium will increase by $6.60 a month in 2027. In addition, many beneficiaries will pay higher deductibles, prescription drug premiums, and out-of-pocket costs.11 Since the Social Security Administration can automatically deduct Part B and Part D premiums from your monthly benefits, those increases take a bite out of the larger Social Security check.12
Taxes add another layer of complexity
The amount of taxable income you receive as a retiree will affect the taxability of your Social Security benefits and the cost of your Medicare benefits. Here’s how it works:
- Almost 50 percent of retirees pay taxes on Social Security benefits. Over the past few decades, the number of retirees whose Social Security benefits are taxable has risen significantly because the income levels that determine benefit taxability have not changed for decades. As a result, today, a single taxpayer with taxable income of $25,000 or more, and joint filers with taxable income of $34,000 or more, usually owes taxes on a portion of their Social Security benefits.13
- Higher-income Medicare enrollees pay surcharges. If you fall into the higher-income category for Medicare, you may pay Income-Related Monthly Adjustment Amount (IRMAA) surcharges on Medicare Part B and Part D premiums. Because IRMAA is based your most recent federal income tax return, a large withdrawal from a traditional IRA, a sizeable required minimum distribution (RMD), or other taxable income distributions can increase both federal income taxes and future Medicare premiums.12
Retirement income planning requires a thorough understanding of the rules and changes that affect Social Security benefits, Medicare costs, and taxation. Knowing how one change influences another can help retirees make informed decisions and gain a clearer understanding of how to maximize retirement income. The timing and source of retirement income can be just as important as the amount received.
There are strategies that can help retirees effectively manage retirement income. They may spread withdrawals over multiple years or transform taxable income into tax-free income by converting traditional IRAs to Roth IRAs during lower-income years. The strategy that’s right for you will depend on your personal financial circumstances. If you would like to learn more, please get in touch.
WEEKLY FOCUS – THINK ABOUT IT
“Words have no power to impress the mind without the exquisite horror of their reality.”14― Edgar Allen Poe, Author
* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.
* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
Sources:
1 https://www.brookings.edu/articles/inaugurating-a-new-blog/
2 https://www.federalreserve.gov/newsevents/pressreleases/monetary20260729a.htm
3 https://www.morningstar.com/economy/what-expect-july-fed-meeting
4 https://www.barrons.com/articles/stocks-today-major-indexes-fall-after-fed-press-conference-d6304e45? or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/08-03-26-Barrons-Review-and-Preview%20-%204.pdf
5 https://www.barrons.com/articles/stock-market-survives-turbulent-week-meta-warsh-d83256da or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/08-03-26-Barrons-Flying-Blind-Stock-Market-Survives%20-%205.pdf
6 https://www.barrons.com/articles/fed-credibility-crisis-stock-market-bonds-ada3194c? or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/08-03-26-Barrons-Fed-Faces-Credibility-Crisis%20-%206.pdf
7 https://www.investopedia.com/ask/answers/12/inflation-interest-rate-relationship.asp
8 https://www.pgpf.org/our-national-debt/
9 https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/08-03-26-Barrons-DJIA-S&P-Nasdaq%20-%209.pdf
10 https://www.aarp.org/social-security/cola-2027-increase-estimate/
11 https://www.cms.gov/oact/tr/2026 (Pages 205 and 208)
12 https://www.ssa.gov/benefits/medicare/medicare-premiums.html
13 https://www.congress.gov/crs_external_products/IF/PDF/IF11397/IF11397.4.pdf
14 https://www.goodreads.com/author/quotes/4624490.Edgar_Allan_Poe
The Markets
Sometimes, the road is rough.
In the early 1900s, riding in new-fangled automobiles was a bone-jarring and physically exhausting experience. Roads were unpaved and rutted, jolting passengers relentlessly. Shock absorbers changed that. Working in tandem with the spring suspension, they made the ride a lot smoother. 1,2
A two-part system smooths the ride for investors, too. It includes asset allocation and diversification.
Asset allocation can help smooth portfolio volatility. In recent years, stock markets have experienced significant volatility because of “systematic risks”, which include events that affect the economy and financial markets. Systematic risks can be changes in market sentiment, inflation, government policies, and geopolitics.3
Market- and economy-wide events are felt broadly, although they often have a bigger impact on some assets than others. As a result, one way to manage systematic risk, particularly market risk, is through asset allocation. Dividing investments among asset classes that may respond differently to changes in the economy or market can help reduce the impact of those changes on a portfolio.4
Diversification can make the ride more comfortable, too. Diversification helps investors manage “unsystematic risk”, which is the chance that a company or industry will be affected by poor performance, regulation, new competition, innovation, or something else that affects its potential growth.5
A well-diversified portfolio typically includes more than one type of investment within an asset class.4 For example, an investor might diversify by owning small, mid-sized, and large company stocks across diverse industries inside of the United States and in other countries. If an investor owns 30 stocks and three perform poorly, the impact of the weaker performers on the overall portfolio return is reduced by the stronger performers.
It’s important to remember that a car’s suspension system smooths the ride without altering the road. Asset allocation and diversification are similar. They’re essential aspects of the investment process that help investors manage risk. However, neither asset allocation nor diversification will prevent a market downturn or eliminate losses.
Last week, major U.S. stock indexes moved lower,6 and U.S. Treasuries moved higher.7 Randall Forsyth of Barron’s reported, “Real risk-free bond yields haven’t been this high in years. Real five-to-10-year yields hadn’t reached current levels since 2023-24. As for 30-year maturities, you would have to go back to the 2008-09 financial crisis to encounter real yields of nearly 3 percent. Real interest rates are what you earn after the bite taken by inflation.”8
Data as of 7/24/26 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | -0.6% | 8.3% | 16.5% | 17.6% | 10.9% | 13.1% |
| Dow Jones Global ex-U.S. Index | 0.3 | 9.6 | 18.4 | 13.8 | 5.7 | 6.7 |
| 10-year Treasury Note (yield only) | 4.7 | N/A | 4.4 | 3.9 | 1.3 | 1.6 |
| S&P GSCI Gold Index | 1.3 | -4.9 | 20.4 | 27.3 | 18.0 | 12.0 |
| Bloomberg Commodity Index | 2.7 | 23.0 | 29.5 | 7.8 | 6.9 | 4.9 |
S&P 500, Dow Jones Global ex-US, S&P GSCI Gold Index, Bloomberg Commodity Index returns exclude reinvested dividends. The three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
BABY BOOMERS HAVE ABOUT $93 TRILLION, BUT IT WON’T ALL GO TO THEIR HEIRS. In the United States, some in younger generations perceive baby boomers as the generation that caught every financial break. They believe boomers benefitted from more affordable housing, lower tuition costs, and rising stock markets. When baby boomers look back, many recall facing significant economic headwinds during their working years, including double-digit mortgage rates, high inflation, and recessions.9
Regardless of the circumstances, baby boomers have accumulated a lot of wealth. When compared to previous generations, baby boomers have more wealth than older generations did at the same age, according to Richard Fry of Pew Research.10
| Household wealth by generation10 Median wealth of U.S. households headed by 58- to 76-year-olds in 2024 dollars | |
| Baby boomers in 2022 | $432,200 |
| Silent generation in 2001 | $335,900 |
| Greatest generation in 1983 | $185,300 |
In total, boomers have about $93 trillion saved and invested, according to 2026 research from a digital payments firm.11 That’s about three times the U.S. gross domestic product, or GDP, which is the value of all goods and services our country produced last year.12 The amount that is passed on to heirs will be far less for several reasons:
- $5 trillion in debt. Many baby boomers are still paying mortgages on their homes in retirement. Beyond housing, many also have credit card debt and auto, personal or business loans that will be repaid from their assets. 11
- Wealth is not distributed evenly. Of the $88 trillion remaining after debts are paid, about 33 percent is held by the top one percent of households. When this group is left out of the calculations, the remaining baby boomers have about $60 trillion.11
“…while excluding the top 1 percent makes the wealth estimate more realistic, it does not make the transfer democratic…most remaining wealth ($44 trillion) is still held by affluent boomers in the top 90 to 99 percent of households. In contrast, the bottom 90 percent of boomer households hold just $16 trillion,” according to the digital payments firm.11
- Retirement is expensive. A significant share of many households’ savings will be spent during retirement. In total, the researchers estimated that “$36 trillion will pass to younger generations over the next 20 years, equivalent to roughly $515,000 per inheriting household.”11
Estate planning is important for many reasons. It ensures your assets are distributed as you want them to be. In addition, an estate plan can directly affect the amount heirs receive by minimizing taxes, avoiding probate, and reducing the likelihood of inheritance disputes. If you don’t have an estate plan or you haven’t reviewed your plan recently, get in touch. We can help.
WEEKLY FOCUS – THINK ABOUT IT
“We are cups, constantly and quietly being filled. The trick is, knowing how to tip ourselves over and let the beautiful stuff out.”13 – Ray Bradbury, Author
Sources:
1 https://en.wikipedia.org/wiki/Shock_absorber
2 https://www.atlasobscura.com/articles/how-america-joined-its-two-great-loves-cars-and-the-outdoors
3 https://www.investopedia.com/terms/s/systematicrisk.asp
4 https://www.investor.gov/introduction-investing/getting-started/asset-allocation
6 https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/07-27-26-Barrons-DJIA-S&P-Nasdaq%20-%206.pdf
8 https://www.barrons.com/articles/rising-interest-rates-danger-markets-tips-215b867d? or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/07-27-26-Barrons-Rising-Interest-Rates-Are-A-Danger%20-%208.pdf