Below are highlights from the NDW Morning Update Video for the morning of 07/02. Access the the video on the NDW Morning Update Video page. 

• The market-cap-weighted S&P 500 (SPX) pulled back modestly over the past week but remains up roughly 9% year-to-date. Performance continues to trail the equal-weighted S&P 500 (SPXEWI) by more than 2 percentage points, reflecting ongoing strength in the average stock relative to the index’s largest constituents.
• The Russell 2000 (RUT) has completed three consecutive buy signals and is now up approximately 21% year-to-date, outperforming the S&P 500 by more than 10 percentage points in 2026. This strength is also evident in our Asset Class Group Scores, where multiple small-cap groups rank above the 90th percentile, underscoring the significant improvement in small-cap leadership this year.
• Within our DALI Sector Rankings, Health Care added 50 signals during June, advancing to third place and firmly into overweight territory. The sector’s rise has coincided with notable weakness in Energy, which saw its signal count decline by roughly 50% over the course of the month.
• The market is currently assigning a greater than 50% probability of a rate hike at the September FOMC meeting. Meanwhile, the iShares 20+ Year Treasury Bond ETF (TLT) recently completed a double-bottom breakout above $85.75, a move that comes as Treasury yields start to trend higher entering the second half of the year.
• This week’s featured research piece highlights our Smart Beta Quilts, which track factor performance across a variety of market segments. Within U.S. equities, Growth and Momentum have reestablished themselves as the leading factors, currently occupying the top spots in the rankings.

Quarter endings and beginnings are typically a good time to provide a touch point with your clients and prospects, so in recognition of the change of calendar, we wanted to give you a sample newsletter to aid you with this communication. You want to let your clients know that you are holding the reins of their portfolios and that you are holding on tight. This letter has not been FINRA approved; however, you are welcome to use the text as you like. Feel free to "slice and dice" the text to best incorporate it within your business.

Sample Client Newsletter: Q2 2026

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The second quarter and first half of 2026 are now officially in the record books. US equities staged a blistering rally from their first quarter slump as the S&P gained nearly 15% in Q2, its best quarter since 2020. Technology stocks were among the best performers leading the tech-heavy Nasdaq-100 to a gain of more than 27%. AI sentiment rebounded, helping to push the NYSE Semiconductor Index to a gain of more than 90% for the quarter.  While tech heavyweights posted strong numbers, small cap stocks generally outperformed their large cap counterparts as the Russell 2000 Index outgained the S&P 500 by more than 6% in Q2.

International equities also advanced, though there was a large gap in performance between developed and emerging markets. The MSCI EAFE Index, which comprises developed markets gained a little under 10%, while the MSCI Emerging Markets Index was up more than 20%. South Korea was a major driver of the spread between emerging and developed markets as the Korea Composite Index gained more than 65% in Q2.

While stocks were mostly higher, it was an unproductive quarter for commodities as the S&P GSCI Commodity Index fell almost 17%. Crude oil was down more than 30% for the quarter, giving back virtually all the ground it gained at the outset of the Iran conflict, which also acted as a major headwind for energy stocks. Meanwhile, precious metals continued their decline that begin in Q1 as silver was down more than 20% while gold dropped more than 13%. Silver is down roughly 15% for the year after having been up more than 60% early in the year.

Interest rates rose over the quarter as worries about energy prices and inflation fueled speculation that the Federal Reserve could raise interest rates this year. Those concerns cooled somewhat as energy prices fell in Q2, but the market is pricing in about a 75% chance of a rate hike by the end of 2026.

International equities remain at the top of the asset class rankings in our Dynamic Asset Level Investing (DALI) tool, which provides us with a heat map of where relative strength (and weakness) resides across and within asset classes. Domestic equities remain in second place, but we saw significant movement among US sectors last quarter. After falling to fourth place in the first quarter, technology has reclaimed the number one spot in the sector rankings as the sector led the rally by US stocks. Meanwhile, energy, which began the second quarter in first place has fallen to seventh as worries about a prolonged conflict with Iran have eased.

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P.S., If you think this type of information would be beneficial to anyone you know, please share this communication with them.

Please be aware that the content of this newsletter is based on the opinion of Dorsey, Wright research and may differ from the research provided by your financial advisor. This market theme letter was written by Dorsey, Wright & Associates and is provided courtesy of your advisor.

The performance numbers in this article do not reflect dividends or transaction costs.  Indexes are not available for direct investment. Past performance is not indicative of future results and there is no assurance that any forecasts mentioned in this report will be attained.

Stocks offer growth potential but are subject to market fluctuations. Dividends are not guaranteed; companies can reduce or eliminate their dividend at any time. There are special risks associated with an investment in real estate, including credit risk, interest rate fluctuations and the impact of varied economic conditions.

The information contained herein has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs.  Accordingly, investors should not act on any recommendation (express or implied) or information in this material without obtaining specific advice from their financial advisors and should not rely on information herein as the primary basis for their investment decisions.  Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources believed to be reliable (“information providers”).  However, such information has not been verified by Dorsey, Wright & Associates, LLC (DWA) or the information provider and DWA and the information providers make no representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein.  DWA and the information provider accept no liability to the recipient whatsoever whether in contract, in tort, for negligence, or otherwise for any direct, indirect, consequential, or special loss of any kind arising out of the use of this document or its contents or of the recipient relying on any such recommendation or information (except insofar as any statutory liability cannot be excluded).  Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.  Neither the information nor any opinion expressed shall constitute an offer to sell or a solicitation or an offer to buy any securities, commodities or exchange traded products.  This document does not purport to be complete description of the securities or commodities, markets or developments to which reference is made.

Potential for profits is accompanied by possibility of loss.

The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy

The option suggestions featured here are pulled from the NDW Options Ideas tool. These are just a sample of the ideas that can be found there. The Options Idea tool contains numerous additional income and speculative plays. It also offers relative strength-based screens targeting the highest (and lowest) relative strength stocks and ETFs that have recently moved counter to their longer-term trend. To access or subscribe to the Options Ideas tool, click here.

Call

J.P. Morgan Chase & Co. (JPM) September 18 $330 Call

Put

Atlassian Corp. PlC (TEAM) September 18 $85 Put

Income (Short Put) 

DoorDash, Inc. Class A (DASH) July 31 $175 Short Put