2026, SO FAR: A MID-YEAR CHECK-IN
Lucidity Ledger — Insights for the Learned Investor
July 17, 2026
This morning one of my clients sent me a rather sardonic message with the lyrics to the 1969 Motown song War, and boy did it hit home[1]:
(War, huh) Yeah
(What is it good for?) Absolutely nothin'
Uh-huh, uh-huh
(War, huh) Yeah
(What is it good for?) Absolutely nothin'
Now that we're halfway through the year, it seems that markets have become accustomed to our new "new normal". How many “new normals” can we have at this point? Post-9/11, post-2008, post-COVID pandemic, and now what seems to be a new forever war, for which everyone I know (on BOTH sides of the political aisle) is disappointed at best (a mild description) at this “new”, yet age-old, development. Thankfully the World Cup being hosted here in the States has been a nice distraction in recent weeks, and is scheduled to come to an end this Sunday with the showdown of Argentina vs. Spain playing in the final match at MetLife Stadium in New Jersey.[2] Hosting the World Cup has shown foreign travelers that, even despite all of our current political and societal unrest, the grand United States of America is indeed still the greatest country in the world.
Economy and Markets
The second quarter of 2026 marked a strong rebound from the volatility we saw earlier in the year. Compared to the first quarter, the turnaround was significant. Q1 was unsettled by the outbreak of conflict and a resulting spike in oil prices; Q2 reversed much of that as those pressures eased and corporate earnings came in strong.
Year-to-date through June 30, most of the major indexes are in positive territory, including U.S. equities and fixed income, International equities, Emerging Market equities, and most Real Asset categories. Perhaps not surprisingly, two asset classes that have often been considered a hedge against traditional markets – Gold and Bitcoin – are both down the most YTD, -7.4% and -33.2% respectively.[3] The major U.S. indices finished the quarter at new all-time highs, driven by better-than-expected corporate earnings (powered primarily by AI-related tech stocks), and easing geopolitical tensions following a U.S./Iran ceasefire, which pushed oil prices back down to pre-conflict levels.[4]
Looking ahead, the market enters the second half of the year on solid footing: earnings growth above historical averages, steady economic growth, and continued enthusiasm (at least by Wall Street) for AI. That said, real risks remain. Inflation has moved back above the Fed's target, and expectations have shifted from rate cuts toward possible rate hikes.[5] Heavy economic reliance on AI infrastructure spending is another area worth watching. While none of this is a prediction of what comes next, it is a reminder of why we stay diversified and stick to the plan we’ve built for you specifically.[6]
Takeaway
At Lucidity, our commitment is to helping our clients make sound decisions as this environment continues to evolve. Building and maintaining wealth happens over years, not weeks, and short-term swings — however sharp — rarely warrant changes to a portfolio that’s built for the long haul. What matters is being consistent with what we can control: following the strategy we've put in place to support the goals in your financial plan and keeping your investment allocation aligned with your circumstances, needs, and comfort level.
If you are reading this and do not currently have a plan, or would like a second opinion on one you do have, reach out to us and we'll help get you on the right path.
[1] As quoted directly from the website https://genius.com/Edwin-starr-war-lyrics: “War” is a counterculture era soul song written by Norman Whitfield and Barrett Strong for the Motown label in 1969. Whitfield first produced the song – a blatant anti-Vietnam War protest – with The Temptations as the original vocalists. After Motown began receiving repeated requests to release “War” as a single, Whitfield re-recorded the song with Edwin Starr as the vocalist, with the label deciding to withhold the Temptations' version from single release so as not to alienate their more conservative fans. Starr’s version of “War” was a number-one hit on the Billboard Hot 100 chart in 1970, and is not only the most successful and well-known record of his career, but it is also one of the most popular protest songs ever recorded. A live recording of the song performed by Bruce Springsteen and the E Street Band hit #8 in 1985.
[2] Sentiment is evenly split between Argentina and Spain; while Spain is widely considered the “better team” as reflected in sports-betting odds, Argentina is a fan-favorite, with massive support for superstar Lionel Messi. At age 39, this is likely Messi’s last World Cup game, and his fans would love to see him finish his stellar career with back-to-back wins. Goaaaaaal!
[3] Source: Greycourt Capital Market Flash Report, June 2026.
[4] Of course, what comes down often goes back up again, including the prices of oil and energy stocks. At the time of this writing, 17 days into Q3, prices are steadily climbing their way back up. Will there be another ceasefire, and if so, will it actually stick? I hope so. Time will tell.
[5] Kevin Warsh was sworn in as the new Federal Reserve Chair on May 22, 2026, succeeding Jerome Powell. Warsh is generally viewed as an inflation “hawk”, focused on returning inflation to the Fed's 2% target. At his first meeting as chair in June, the Fed held rates steady but dropped its easing-leaning guidance, and more committee members began projecting a possible rate hike later in 2026 — a shift markets read as hawkish. He has also signaled a preference for a less communicative Fed that lets markets interpret economic data on their own. With inflation still above target, this is part of why rate-hike expectations have replaced the rate-cut hopes investors held at the start of the year. At Lucidity, we are monitoring this closely and remain cautious with our fixed income holdings, keeping our bond exposure high-quality and of short- to intermediate-duration while we wait to see how Mr. Warsh handles the corner into which he’s been painted.
[6] Trying to predict what’s coming next is a fool’s game. For every pundit and headline that says “X”, there’s always a counter that insists on “Y”. At Lucidity, we prefer to monitor and make adjustments based on factual data as we continue to balance risk and reward in our clients’ portfolios. Besides, my crystal ball is always on the fritz.
This commentary is only general information and should not be construed as investment, tax, or legal advice. You should consult your own investment, tax, and legal advisors before engaging in any transaction. Past performance of any market results is no assurance of future performance. The information presented within has been obtained from sources believed to be reliable but is not guaranteed.
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