A preface to the newsletter: I hope you had a nice 4th of July weekend!
In this week's newsletter I cover the June jobs report and why its surprising weakness was actually welcome news for investors. I touch on the Meta AI overcapacity story and what it means for the chip sector, and I do a brief recap of where markets stood at the halfway point of 2026. In the Personal Finance section I break down the different types of employer retirement accounts, explain the nuances of each account, and why employees often have more than one. And in this week's Longevity Science Foundation spotlight I review an article by Maria Corlianò, PhD on the medical research behind popular mushroom supplements and their health claims.
Lastly, on a more personal note relating to my financial planning practice - my wife and I are expecting our first child in September. There are many benefits to running my own practice except that I cannot take a prolonged leave of absence, so instead I will be scaling back my hours for the first couple of months until we get settled into a routine. My current clients are always my top professional priority, therefore I will be pausing taking on any new clients after August 1st in order to manage my workload once the baby arrives. If you, or anyone you know, are considering inquiring about becoming a client of mine, then please reach out before the August 1st deadline.
As always, please don't be shy about sharing feedback and please feel free to forward this on to anyone else who might be interested in reading it.
Have a nice week ahead,
Kevin
Stocks
It was a solid week for stocks, with all three indices gaining around 2%. Here we are at the mid-year point and the results for the first half of 2026 were fairly good: the S&P 500 gained a little more than 9%, the Dow gained about 10%, and the Nasdaq gained slightly over 11%. That's not a bad six months, all things considered.
However, what is notable is that most of the Magnificent Seven tech stocks that have been the talk of Wall Street for the past several years are underperforming the indices so far in 2026. The market is hitting new records while its most celebrated stocks are struggling to keep up - this is a dynamic worth watching carefully as we head into the second half.
Bonds
Bonds had their best week in several months. The June jobs report came in far below expectations, and soft hiring data means less pressure on the Fed to raise interest rates. Bond markets reacted quickly: yields fell as investors trimmed bets on a September rate hike, and the 10-year Treasury yield settled near 4.46% by Thursday's close. This is welcome news for bond investors, and it puts Bank of America's three-hike forecast from last week into serious question. That said, one month's soft jobs data does not solve the inflation problem. I will be watching the July jobs report next month closely because two consecutive weak readings would make a September hike very unlikely.
Oil
Oil held near $68.50 per barrel for the week, essentially unchanged, which is itself a form of good news. Several months ago, crude was above $100. A stable oil price near $68–70 through the summer would be transformative for the inflation readings we get in August and September. I remain cautious though: the Iran story has been a series of steps forward followed by steps back. But currently the trend is moving in the right direction.
The June jobs report badly missed expectations (and the markets rallied)
On Thursday morning, the Bureau of Labor Statistics reported that the U.S. economy added just 57,000 jobs in June. The Wall Street consensus estimate was expecting 115,000 new jobs. That is a miss of roughly half the forecast, and it arrived on top of significant downward revisions to both April and May that subtracted another 74,000 jobs from prior estimates.
In an ordinary environment, a jobs number this weak would generate significant worry about an economic slowdown. However in this case it did not, and here’s why: the dominant fear gripping markets right now is inflation, not recession. When the jobs data came in soft, traders immediately pulled back their bets on a September rate hike. The Dow responded with a surge to a record close and bond yields fell. The likelihood of an interest rate hike decreases when the labor market softens, because a weakening jobs market gives the Fed less justification to believe that the economy is overheating.
Meta's plan to sell excess AI computing capacity rattles chip stocks
On Tuesday, reports surfaced that Meta is planning to sell its unused AI computing capacity to outside customers. This means that they are selling the spare capacity from its own enormous AI infrastructure buildout to other tech companies. At first glance, this sounds like an entrepreneurial business move, however tech investors viewed it differently.
Here is the concern: Meta spent more than $100 billion building AI data centers in 2026 alone. Collectively the four largest tech companies (Meta, Microsoft, Google, and Amazon) are spending roughly $725 billion on AI infrastructure this year! If Meta (one of the biggest buyers of AI chips on earth) has enough unused capacity to start selling it to competitors, what does that imply about the trajectory of AI chip demand? The anxiety is that this may slow AI infrastructure spending if they cannot demonstrate that the cost is generating returns. The Semiconductor Index fell roughly 6% over two sessions in response, with Teradyne down more than 13%, KLA down nearly 12%, and Sandisk off more than 14%.
I think the market is overreacting to the Meta news. Amazon did exactly this with its own excess computing capacity in 2006 when it launched AWS, and that business eventually became one of the most profitable enterprises in corporate history. Meta selling spare AI capacity is not necessarily an admission that it over-spent on AI infrastructure, it is an attempt to monetize current excess capacity. The real question is whether AI demand continues to grow.
"The slowdown in payroll growth reinforces the view that the Federal Reserve is under little pressure to tighten policy." - Seema Shah, Chief Global Strategist, Principal Asset Management, commenting on the June jobs report
Contrary to last week's quote from Bank of America expecting three interest rate hikes later this year, Principal's Chief Global Strategist Seema Shah shared much more dovish comments after the June jobs report. Here Shah makes a point about the Fed's dual mandate that is worth unpacking. The Fed is required to pursue two goals simultaneously: keep prices stable (low inflation) and maintain maximum employment (a healthy labor market). When both goals pull in the same direction, the Fed's job is relatively straightforward. When they pull in opposite directions (as they have this year) the Fed has to make difficult trade-offs. When hiring weakens like it did in June, the tension between those two goals eases a bit. Now the Fed has less motivation to raise rates and cool off the economy (to lower inflation) since the labor market appears to be softening on its own.
Shah's point is that the June jobs data gives the Fed some flexibility, but that does not mean inflation is solved. However it does mean that the most aggressive rate hike scenario, such as the three hikes that Bank of America is forecasting, requires more dire conditions than are currently in place: a reheating labor market, reaccelerating inflation, and oil back above $90. None of those conditions exist right now. So what Shah is really saying is that the data bought us some time.
Retirement Accounts Explained: 401(k), 403(b), 457, and 401(a)
One of the most common sources of confusion I encounter in my practice are employees who have two, three, or even four separate retirement accounts and are not entirely sure why. If you have ever opened your retirement account statement and wondered what the difference is between a 403(b), a 457(b), and a 401(a), and why you seem to have all of them at the same time, then this section is for you. Let me start with the basics and work up to the nuances.
What all of these accounts have in common
The numbers (401, 403, 457) refer to the specific sections of the Internal Revenue Code that authorize each type of retirement plan. In most cases, the fundamental mechanic is the same: you contribute money to the plan before paying income taxes on it (that is called a pre-tax contribution and reduces your taxable income by the amount contributed), the money grows tax-deferred inside the account, and you pay ordinary income taxes when you withdraw from the account later in retirement. These days it’s common for plans to also offer a Roth option, where you contribute after-tax dollars and pay no taxes on the growth or withdrawals, but in return you don’t get to deduct the contribution from your taxable income. Contribution limits across these plans in 2026 are approximately $24,500 per year for employee contributions, plus a catch-up contribution for employees age 50 and older. The SECURE 2.0 Act also created a higher "super catch-up" limit for employees ages 60 through 63 - check with your HR department for your current contribution limit.
The 401(k): the private sector standard
The 401(k) is the most common retirement plan in America. It is used primarily by for-profit, private sector businesses. Employees elect how much of each paycheck to contribute, and employers typically offer a matching contribution up to a certain percentage of salary (a common formula is 50 cents for every dollar contributed, up to 6% of your salary). The money is invested in a menu of mutual funds selected by the plan's administrator. If you work in the private sector, this is almost certainly the type of retirement plan you have, and it may be the only option available to you.
The 403(b): the non-profit version, and why it has "annuity" in the name
The 403(b) is the structural equivalent of a 401(k) for employees of public schools, universities, hospitals, and other 501(c)(3) non-profit entities. Contribution limits and general structure are essentially identical to a 401(k). However, the 403(b) carries an official nickname you may have encountered: it is often called a Tax-Sheltered Annuity (TSA) or Tax-Deferred Annuity (TDA).
The reason is historical - when Congress first created the 403(b) plan in 1958, the only investment vehicles available within the plan were annuity contracts issued by insurance companies and the name stuck. Today, most 403(b) plans offer both traditional mutual fund investments and annuity options, but the word "annuity" in the plan's official name causes genuine confusion among employees who assume their entire account is some form of complex insurance product (in most cases it is not). The "annuity" label is a historical artifact, not a description of how your money is necessarily invested. You may be invested entirely in straightforward index funds inside a 403(b), however often retirement plan providers will shepherd participants into annuity investment options. I will come back to this in next week’s newsletter where I will explain the annuity component in more detail, because those can be very complicated investments.
The 457(b): the government plan with a hidden superpower
The 457(b) is available to employees of state and local governments and, in some cases, certain qualifying non-profit organizations. At first glance it looks similar to a 403(b) or 401(k): the same contribution limits, the same pre-tax treatment, the same general structure. But it has one significant feature that makes it exceptional for retirement planning - there is no early withdrawal penalty.
With a 401(k) or 403(b), if you withdraw money before age 59½, you owe income taxes on the withdrawal plus a 10% early withdrawal penalty. With a 457(b), there is no 10% penalty, regardless of your age. You simply owe ordinary income taxes on whatever you withdraw, whenever you withdraw it. For someone planning to retire early, or someone needs to use the money before age 59½, this flexibility is a meaningful and often underappreciated advantage. The one caveat is that you typically must first separate from service to your employer in order to have access to the funds within the 457(b) plan.
The 401(a): the employer-driven plan
The 401(a) is a plan in which the employer, not the employee, determines the contribution amount, i.e. the employer mandates a specific contribution. For example, contributing 8% of your salary into the plan automatically, regardless of whether you elect to put anything in yourself. The employee may or may not have the option to add their own contributions on top of the employer contributions. These plans, often referred to as a Defined Contribution plan, are common at government agencies and universities, functioning as the employer's core retirement vehicle that exists alongside the employee's voluntary 403(b) or 457(b). In some government positions, the 401(a) substitutes for Social Security, meaning the employer directs contributions to the 401(a) instead of paying into the federal Social Security system.
Why you might have more than one account at the same time
Here is where things can get interesting. A professor at a state university, or a nurse at a public hospital, might have all three of the above plans simultaneously. That’s not by accident or some sort of bureaucratic quirk - it is by design - and it is a significant financial advantage.
The structure typically works like this: the institution maintains a 401(a) as the employer's mandatory contribution plan, making automatic contributions on the employee's behalf. The employee also has access to a 403(b) where they can make their own voluntary contributions, up to the annual limit. And separately, the employee has access to a 457(b) with its own independent contribution limit. The key word there is independent: the 457(b) annual limit does not count towards the 403(b) annual limit; you can make tax-deferred contributions to both plans. They are completely separate buckets under the tax code. This means that a hospital nurse or university faculty member who maximizes both their 403(b) and their 457(b) can contribute roughly twice as much to tax-deferred retirement accounts each year as a private-sector employee who only has access to a 401(k). On top of that, the employer is likely contributing to the 401(a) as well. The cumulative tax-deferred savings opportunity at many public institutions is substantially larger than most employees realize.
The bottom line
The alphabet soup of employer retirement accounts exists because Congress created different rules for different types of employers over decades, and those rules layered on top of each other. The practical takeaways for employees are these:
A different way to think about agency in long term health & philanthropy
Microdosing, Macrodosing, and Mushroom Powders: A Longevity Reality Check
Maria Corlianò, PhD
This article from the Longevity Science Foundation tackles the hype around psychedelics and "medicinal" mushrooms as longevity tools, cutting through marketing claims to ask what the science actually shows about whether these substances help people live longer or healthier.
Medicinal mushrooms:
Lion's Mane shows small, inconsistent signals for cognition in mild cognitive impairment and early Alzheimer's, fading after stopping, with no evidence of lifespan extension.
Reishi may modestly help immune markers or quality of life alongside standard cancer care, but a review found insufficient evidence of survival benefit and it carries real hepatotoxicity risk.
Chaga is popular online but backed by almost no human trials, mostly cell/animal data. It also carries a specific danger: its high oxalate content has been linked to kidney injury, including cases progressing to end-stage renal disease.
Psychedelics:
Psilocybin paired with therapy shows meaningful, sometimes rapid relief from major depression and reduced heavy drinking in alcohol use disorder, though durability beyond a few months is still unclear. Preclinical work showing psilocybin preserving telomeres and extending lifespan in cells and mice is intriguing but not proven in humans. The strongest human evidence is psychiatric, not anti-aging.
LSD reduced generalized anxiety in a dose-dependent way, with benefits lasting 4–12 weeks in a 198-person trial. None of these trials measured lifespan or aging biomarkers. Microdosing claims (better mood, focus, creativity) largely fail in placebo-controlled testing. When people don't know if they got the real drug, the perceived benefits tend to vanish, and a recent ADHD trial found low-dose LSD no better than placebo.
Safety caveats matter: risk of mania in bipolar disorder, and ayahuasca's drug/food interactions (e.g., hypertensive crisis with tyramine-rich foods).
Why bother with any of this for longevity? Because treating depression or alcohol use disorder can plausibly extend health-span indirectly, even though the intervention itself doesn't touch biological aging directly.
Practical takeaways: Psychedelics are evidence-supported for specific psychiatric/addiction indications in supervised clinical settings, but not for extending life or slowing aging, and require ruling out contraindications like bipolar disorder. If using mushroom supplements, insist on third-party testing, avoid Chaga if you have kidney issues, watch for liver warning signs with Reishi (dark urine, jaundice, right-sided abdominal pain), and check with a clinician if you take anticoagulants or have liver/kidney disease.
Source: Corlianò, "Microdosing, Macrodosing, and Mushroom Powders: A Longevity Reality Check" (October 14, 2025)
To learn more, go to: Microdosing, Macrodosing, and Mushroom Powders: A Longevity Reality Check
It was a good week for investors with diversified portfolios. The Dow hit a record high, the first half of 2026 is officially in the books as one of the strongest in years, and the June jobs report gave the Federal Reserve a plausible reason to hold off on the aggressive rate hike path that Bank of America outlined just last week. The semiconductor sector struggled again, but a portfolio spread across multiple sectors fared far better than one concentrated in AI chip names.
Understanding your retirement plan options, rules, and nuances is extremely valuable - more so than watching the stock market. The employee who has been strategically contributing to their retirement plan for twenty years is in a substantially better position at retirement than the person who waited to start. If you are still working, then take the time to review your retirement plan and determine the optimal contribution and investment strategy. Even if you are planning on retiring soon, it's never a bad time to make a good decision.
Have a nice week ahead!
Kevin