ARTICLES

An Alternative To Money Market Funds

August 2026

MARKET OVERVIEW
The US stock market continues to drive higher even as the battle in Iran rages on. As of the close of trading on August 7th, the Dow Jones Industrial Average is up 12.43% for 2026. The S&P 500 is up 13.32% and the Nasdaq is up 14.84%, year to date. The impact has also been swiftly seen in the energy markets. Both Brent Crude oil and WTI ended the week trading well below the feared $100/barrel level. Brent Crude ended the week trading @ $83.55/barrel while WTI closed @ $78.18/barrel.

Some items of note: Intercontinental Exchange will acquire MarketAxess for $5.7 billion in cash. Both Porsche and Volkswagen are slashing headcount, IBM shares tumbled after it informed investors that it would report a disappointing quarter, Mavis Tire is acquiring auto repair chain Pep Boys, PayPal is reportedly a takeover target, both Conagra and Wendy's slashed their dividends as their operating problems continue. Wendy’s has dipped to 3rd place among US hamburger chains based on revenue behind McDonald’s and Burger King. Samsung is slashing jobs and will relocate its headquarters from New Jersey to Texas.  New Jersey will bid farewell to Mars Wrigley as it moves its headquarters to Chicago. Utz Brands is being acquired by the European snack maker Intersnack Group for $2.9 billion in cash. Berkshire Hathaway is now the owner of homebuilder Taylor Morrison. Meanwhile, Dream Finders Homes will acquire Beazer Homes. Finally, Duke Energy, JP Morgan, Wells Fargo and Bank of America are increasing their quarterly dividends.

ECONOMIC SUMMARY
Friday’s Nonfarm Payroll Report was much softer than expected as 23,000 jobs were lost, well below the 80,000 jobs addition forecast. The prior two months saw a reduction of 103,000 jobs. The Labor Participation Rate declined to 61.4% while the U-6 Unemployment rate held steady at 7.9%. The U-3 rate fell to 4.1%. The next Nonfarm Payroll Report will be released on Friday, September 4.

FEDERAL RESERVE
The Federal Reserve met July 27-28 and stood pat on rates. The Fed will continue to monitor inflation and hopes to soon meet its 2% target. The Fed will next meet on September 15-16.

STOCKS TO WATCH
Hedge Fund Situational Awareness “SA” blew up last month triggering wild swings in the share price of numerous technology firms. Citadel stepped in to calm the markets after it acquired the portfolio of SA at a 10% discount. The problems SA faced were really the result of three foolish actions it took. First, a large portion of its portfolio was in illiquid securities. Second, the portfolio was highly concentrated. Finally, there was too much leverage on the portfolio. Throughout our history, numerous individuals and firms have suffered financial ruin due to excessive leverage and debt. Both Lehman Brothers and Archegos Capital Management are recent examples of the danger created by excessive leverage and debt. With Margin Debt now at an alltime high, many market observers are concerned that this issue could soon add more turbulence in the market.

My weekly radio show is now on holiday and should return soon on WWPR 1490 AM. My prior radio shows and columns are available here.

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