HOTLINE
Hotline Archive
August 7, 2026
This is John Bonnanzio with a Fidelity Monitor & Insight Hotline update for Friday evening, August 7.
There are no model portfolio trades advised.
This week, stocks and bonds fired on all cylinders. Along the way, major equity gauges scored new highs.
Primary market drivers included the continuation of strong corporate earnings growth (second-quarter S&P 500 profits are on track to make their biggest gains since 2021), deescalation of tensions between the U.S. and Iran, and somewhat ironically, data pointing to a slowdown in labor market.
As to the latter, economists had forecasted job gains of 80,000 in July. Instead, it’s estimated that 23,000 were lost, and there was also a downward revision in job creation from prior months. However, the unemployment rate also declined, suggesting this is more of a slow-hire / slow-fire situation as opposed to a weak economy. Regardless, stock and bond investors embraced the data, as any kind of perceived weakness in the labor market could mean the Fed will be less inclined to hike interest rates next month.
Separately, the July survey of purchasing managers suggests optimism with factory activity poised to expand at its fastest pace in over four years. The Institute for Supply Management said that factory hiring had increased after tensions in the Persian Gulf had eased along with oil prices. That the ISM survey is at odds with government jobs data is not unusual as the former is forward-looking while that latter is not.
This week, the S&P 500 reached an all-time high on Tuesday, then again closed at a record level today: its week-to-date gain was 3.6%. Likewise, the Dow Industrials closed at a record high on Tuesday (up 3.0%), while the Nasdaq Compose rode a wave of AI optimism to a record close today. Since last Friday’s close the tech-rich index has soared 5.2% and, in the process, more than erased July’s decline of 3.2%.
Elsewhere, Russell’s small- and mid-cap indexes gained 3.5% and 3.2%, respectively, this week.
With tech a far less significant factor in overseas markets, gains were solid, though somewhat weak in comparison. The Stoxx Europe 600 gained 1.7%, having easily outpaced London’s FTSE 100 (up 0.3%). On the other hand, France’s CAC 40 gained 2.4% due to several factors: strong corporate earnings from several makers of luxury-brand goods, an agreement on a new trade agreement and expectations of a central bank rate-cut.
In Asia, China’s Shanghai Composite and Japan’s Nikkei 225 rose 2.8% and 1.9% owing, in part, to tech optimism.
Turning to oil, West Texas Intermediate futures plunged nearly 9% this week to $77.03 a barrel. As mentioned earlier, another cessation in hostilities between the U.S. and Iran, plus reports of progress being made on an agreement to fully reopen the Strait of Hormuz, fueled investor optimism.
Turning to the fixed-income market, short- to intermediate-term Treasury yields fell this week. The primary catalyst was the weak July jobs report. Yields on both the 5- and 10-year Treasury Notes eased 10 basis points to 4.35% and 4.65%, respectively. (Bond prices, of course, move inversely to their yields.)
| Our model performance as of Friday's close is listed below: | ||
|---|---|---|
| Week | YTD | |
| S&P 500 | + 3.6% | + 14.1% |
| Barclays US Aggregate Bond | + 0.6% | 0.0% |
| Income Model | + 1.5% | + 5.8% |
| G&I Model | + 2.3% | + 11.2% |
| Growth Model | + 3.9% | + 16.0% |
| Select System | + 3.5% | + 18.3% |
| Unique Opportunities Model | + 4.2% | + 14.6% |
The August newsletter was posted on our website Monday evening.
Our next regularly scheduled Hotline update will be on Friday August 14.
Fidelity Monitor & Insight's Hotline is updated on Friday evenings or whenever the Dow moves 1,000 points or more in either direction.