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August 2026 Commentary and Economic Outlook

AUGUST 2026 EDITION:

Commentary and Economic Outlook


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MARKET & ECONOMIC OUTLOOK WEBINAR

Be sure to register and attend our Monthly Market & Economic Outlook Webinar scheduled for Thursday, September 10th 2026 @ 1:30PM EDT. In the webinar, Jay Hatfield, Infrastructure Capital Advisors CEO and Portfolio Manager, will walk you through updated market commentary, and economic outlook for the coming months. SIGN UP!



Economic Market Outlook Jay Hatfield InfraCap Infrastructure ETF

Fund Updates:

  • On May 12th we launched the Infrastructure Capital Nasdaq Option Income ETF, QVOL. The fund seeks high income and to outperform the Nasdaq 100 on a total return basis by screening for reasonable valuations based on PEG ratios (Price Earnings ÷ Growth). We seek to eliminate the “Dogs of the Daq”, which are overvalued companies such as Tesla, Comcast, Charter, Kraft Heinz, Mondelez, Walmart and Costco.


Economic Market Outlook Jay Hatfield InfraCap Infrastructure ETF

Economy:

  • We forecast that the economy will grow at a robust 2.5% even if the Strait of Hormuz is not reopened. Growth is being driven by a boom in tech investment, which was up 15% in the first quarter. We expect a gradual improvement in housing investment as interest rates decline during the second half of the year.

  • The consumer remains resilient as gasoline consumption is now only 3% of consumer spending versus up to 8% during the 1970s. If the Strait is reopened and interest rates drop to the 4% area, economic growth could accelerate into the 3% area as housing and construction recover.

  • ICA’s real-time market inflation, CPI-R, is tracking at 1.1% YoY vs Core CPI of 2.5% YoY. Core CPI Shelter is +3.15% vs InfraCap’s Realtime Shelter index showing -0.19% YoY. We project that July PCE will be 0.2% MoM and that lower shelter inflation will persist since it is a 6-month average and is further lagged by utilizing renewing rates.

    • Annualizing the trailing 3 months of Core CPI results in inflation of only 1.64%.

  • We project that reported PCE Core will decline from the current 3.4% y/y to below 2.5% as low shelter inflation finally gets reflected in the data, tariff impacts roll off, and volatile categories like Portfolio Management and Airline Fares normalize.



Economic Market Outlook Jay Hatfield InfraCap Infrastructure ETF

Stock Market:


  • If the Strait of Hormuz does not open by year end and oil prices stay in the $80-100 range and the 10-year remains at 4.75%, our target goes to 8,100 (20x 2027 S&P EPS). If the Strait opens, our target increases to 9,000 (22x 2027 EPS). S&P earnings estimates continue to “melt up” with the current estimate of $405 up 16% since the beginning of the year. Every 25 bp of 10-year yield impacts the theoretical equilibrium multiple by 1 point.

    • We are not currently experiencing a stock price bubble, but rather an earnings estimate surge as the AI boom causes a dramatic increase in long term earnings estimates.  The biggest risk to our target is to the upside as 2027 earnings estimates continue to rise rapidly.


Economic Market Outlook Jay Hatfield InfraCap Infrastructure ETF

Bond Market:

  • We continue to believe that a Fed rate increase at this time would be a historic mistake, in line with the “transitory” policy error of 2021. Fed policy is currently very tight with housing and construction in recession due to the Fed Funds rate being 0.75-1.00% over the neutral rate. CPI Core is tracking at 2.5%, in line with the Fed’s 2% arbitrary target and is tracking at only 0.8% if adjusted for the delayed and inaccurate shelter and financial services components.

  • We are also hopeful that the Warsh task force will reform the price indices to reflect real-time market prices.  If that occurs, the revised indices will show that Core PCE is already below the Fed’s arbitrary 2% target.  We publish CPI-R, which is our estimate of real-time market inflation and it shows that inflation is already at the Fed’s target.

  • The US could be headed toward deflation. Historically, inflation is only caused by excessive money supply growth and oil price spikes. In the 70s, oil prices rose 1,200% and the money supply grew at an average rate of 10% per year. Right now, the money supply (Mo) is declining by over 10% per year and oil prices have declined by over 20% from recent highs. If the Fed reforms its data feeds, it will cut rates aggressively to avoid the potential for disinflation.


DISCLOSURE

This information is not an offer to sell, or solicitation of an offer to buy any investment product, security, or services offered by Jay Hatfield, or Infrastructure Capital Advisors, LLC, (”ICA”) or its affiliates. ICA, will only conduct such solicitation of an offer to buy any investment product or service offered by ICA, if at all, by (1) purported definitive documentation (which will include disclosures relating to investment objective, policies, risk factors, fees, tax implications and relevant qualifications), (2) to qualified participants, if applicable, and (3) only in those jurisdictions where permitted by law. Jay Hatfield or ICA may have a beneficial long or short position in securities discussed either through stock ownership, options, or other derivatives; nonetheless, under no circumstances does any article or interview represent a recommendation to buy or sell these securities. This discussion is intended to provide insight into stocks and the market for entertainment and information purposes only and is not a solicitation of any kind. ICA buys and sells securities on behalf of its fund investors and may do so, before and after any particular article herein is published, with respect to the securities discussed in any article posted. ICA’s appraisal of a company (price target) is only one factor that affects its decision whether to buy or sell shares in that company. Other factors might include, but are not limited to, the presence of mandatory limits on individual positions, decisions regarding portfolio exposures, and general market conditions and liquidity needs. As such, there may not always be consistency between the views expressed here and ICA’s trading or holdings on behalf of its fund investors. There may be conflicts between the content posted or discussed and the interests of ICA. Please reach out to the ICA for more information. Investors should make their own decisions regarding any investments mentioned, and their prospects based on their independent research, and not on any subjective opinion(s) made either by ICA, ICA employees or affiliates. The information presented should not be construed as legal, tax or accounting advice or as a recommendation to invest in any of the products or strategies described, and may not be appropriate for individual investors. Such persons are urged to consult their own legal, tax and investment counsel before making any investment decision.This material must be preceded or accompanied by a prospectus. The information contained herein represents our subjective belief and opinions and should not be construed as investment, tax, legal, or financial advice. For a prospectus with this and other information about the Funds, please visit www.infracapfunds.com. Investors should consider the investment objectives, risks, charges, and expenses carefully before investing. Please read the prospectus carefully before investing. For more information about the Funds, Fund strategies or Infrastructure Capital, please reach out to Craig Starr at 212-763-8336 (Craig.Starr@icmllc.com). The Funds are distributed either by Quasar Distributors, LLC or by VP Distributors, LLC, an affiliate of Virtus ETF Advisers, LLC. QVOL, ICAP, SCAP, and BNDS ETFs are distributed by Quasar Distributors LLC. PFFA, PFFR, and AMZA ETFs are distributed by VP Distributors, LLC an affiliated of Virtus ETF Advisers, LLC.

 
 
 

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DISCLOSURE

Opinions represented on this website are subject to change and should not be considered investment advice. Past performance is not indicative of future results. This data was prepared using sources of information generally believed to be reliable; however, its accuracy is not guaranteed. For more information about the Funds, Fund strategies or Infrastructure Capital, please reach out to Craig Starr at 212-763-8336 (Craig.Starr@icmllc.com).

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Investors should consider the investment objectives, risks, charges, and expenses carefully before investing. For a prospectus with this and other information about the InfraCap Small Cap Income ETF, please click here. Please read the prospectus carefully before investing. For more information, please reach out to William Heffernan at 212-763-8326 or icap-operations@infracap-funds.com.

 

The Funds are distributed either by Quasar Distributors, LLC or by VP Distributors, LLC, an affiliate of Virtus ETF Advisers, LLC. ICAP and SCAP ETFs are distributed by Quasar Distributors LLC. PFFA, PFFR, and AMZA ETFs are distributed by VP Distributors, LLC an affiliated of Virtus ETF Advisers, LLC.

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Current income is a primary objective in most, but not all, of ICA's investing activities. Consequently, the focus is generally on companies that generate and distribute substantial streams of free cash flow. This approach is based on the belief that tangible assets that produce free cash flow have intrinsic values that are unlikely to deteriorate over time. For more information, please visit infracapfunds.com.

 

The Russell 2000 Index is a small-cap U.S. stock market index that makes up the smallest 2,000 stocks in the Russell 3000 Index. It is not possible to invest directly in an index. In addition, there is a highly liquid option market according to total option volumes, as of December 8, 2023 *Morningstar ratings are based on risk-adjusted returns. Strong ratings are not indicative of positive fund performance. Morningstar Rating: Five star ranking awards for three year performance was prepared by Morningstar, an independent third party. As of 09/30/2023, PFFA was rated 5 stars out of 64 funds, 1 stars out of 58 funds and has no rating out of 38 funds within the US Fund Preferred Stock category for the 3-, 5- and 10 year periods, respectively. As of 09/30/2023, AMZA was rated 5 stars out of 100 funds, 1 stars out of 91 funds and no rating out of 0 funds within the Energy Limited Partnership category for the 3-, 5- and 10 year periods, respectively. These ratings are not indicative of a fund's future results or the future success of the adviser in managing its other funds. Approximately 10% of funds received 5 star award (top ten) in these categories. These category rankings only reflects two category rankings produced by Morningstar. The Adviser did not pay a fee to participate in the in Morningstar’s rating system. Morningstar ratings do not represent the entire universe of Preferred Stock or Energy limited Partnership funds offered to investors, rather this rating represents a subset of Preferred Stock and Energy Limited Partnership funds. For more information about the ranking and rating process, please contact Morningstar at 1-312-384-4000, or visit https://bit.ly/440AjUT.

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A word about SCAP risk:  Investing involves risk, including possible loss of principal. An investment in the Fund may be subject to risks which include, among others, investing in equities securities, dividend paying securities, utilities, small-, mid- and large-capitalization companies, real estate investment trusts, master limited partnerships, foreign investments and emerging, debt securities, depositary receipts, market events, operational, high portfolio turnover, trading issues, active management, fund shares trading, premium/discount risk and liquidity of fund shares, which may make these investments volatile in price. Foreign investments are subject to risks, which include changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations, and changes in currency exchange rates which may negatively impact the Fund’s returns. Small and Medium-capitalization companies, foreign investments and high yielding equity and debt securities may be subject to elevated risks. The Fund is a recently organized investment company with no operating history. Please see prospectus for discussion of risks. Diversification cannot assure a profit or protect against loss in a down market.  SCAP is distributed by Quasar Distributors, LLC.

 

A word about ICAP Risk: Investing involves risk, including possible loss of principal. An investment in the Fund may be subject to risks which include, among others, investing in equities securities, dividend paying securities, utilities, preferred stocks, leverage, short sales, small-, mid- and large-capitalization companies, real estate investment trusts, master limited partnerships, foreign investments and emerging, debt securities, depositary receipts, market events, operational, high portfolio turnover, trading issues, options, active management, fund shares trading, premium/discount risk and liquidity of fund shares, which may make these investments volatile in price. Foreign investments are subject to risks, which include changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations, and changes in currency exchange rates which may negatively impact the Fund's returns. Small and Medium-capitalization companies, foreign investments, options, leverage, short sales, and high yielding equity and debt securities may be subject to elevated risks. The Fund is a recently organized investment company with no operating history. Please see prospectus for discussion of risks. ICAP fund distributor, Quasar Distributors, LLC.

 

Virtus InfraCap U.S. Preferred Stock ETF (NYSE: PFFA): Exchange Traded Funds: The value of an ETF may be more volatile than the underlying portfolio of securities the ETF is designed to track. The costs of owning the ETF may exceed the cost of investing directly in the underlying securities. Preferred Stock: Preferred stocks may decline in price, fail to pay dividends, or be illiquid. Non-Diversified: The Fund is non-diversified and may be more susceptible to factors negatively impacting its holdings to the extent that each security represents a larger portion of the Fund’s assets. Short Sales: The Fund may engage in short sales, and may experience a loss if the price of a borrowed security increases before the date on which the Fund replaces the security. Leverage: When a Fund leverages its portfolio, the value of its shares may be more volatile and all other risks may be compounded. Derivatives: Investments in derivatives such as futures, options, forwards, and swaps may increase volatility or cause a loss greater than the principal investment. No Guarantee: There is no guarantee that the portfolio will meet its objective. Prospectus: For additional information on risks, please see the Fund’s prospectus. 

 

InfraCap REIT Preferred ETF (NYSE: PFFR): Exchange-Traded Funds (ETF): The value of an ETF may be more volatile than the underlying portfolio of securities it is designed to track. The costs of owning the ETF may exceed the cost of investing directly in the underlying securities. Preferred Stocks: Preferred stocks may decline in price, fail to pay dividends, or be illiquid. Real Estate Investments: The Fund may be negatively affected by factors specific to the real estate market, including interest rates, leverage, property, and management. Industry/Sector Concentration: A Fund that focuses its investments in a particular industry or sector will be more sensitive to conditions that affect that industry or sector than a non-concentrated Fund. Passive Strategy/Index Risk: A passive investment strategy seeking to track the performance of the underlying index may result in the Fund holding securities regardless of market conditions or their current or projected performance. This could cause the Fund’s returns to be lower than if the Fund employed an active strategy. Correlation to Index: The performance of the Fund and its index may vary somewhat due to factors such as Fund flows, transaction costs, and timing differences associated with additions to and deletions from its index. Market Volatility: Securities in the Fund may go up or down in response to the prospects of individual companies and general economic conditions. Price changes may be short or long-term. Prospectus: For additional information on risks, please see the Fund’s prospectus.

 

InfraCap MLP ETF (NYSE: AMZA): Exchange Traded Funds: The value of an ETF may be more volatile than the underlying portfolio of securities the ETF is designed to track. The costs of owning the ETF may exceed the cost of investing directly in the underlying securities. MLP Interest Rates: As yield-based investments, MLPs carry interest rate risk and may underperform in rising interest rate environments. Additionally, when investors have heightened fears about the economy, the risk spread between MLPs and competing investment options can widen, which may have an adverse effect on the stock price of MLPs. Rising interest rates may increase the potential cost of MLPs financing projects or cost of operations, and may affect the demand for MLP investments, either of which may result in lower performance by or distributions from the Fund’s MLP investments. Industry/Sector Concentration: A fund that focuses its investments in a particular industry or sector will be more sensitive to conditions that affect that industry or sector than a non-concentrated fund. Short Sales: The fund may engage in short sales, and may experience a loss if the price of a borrowed security increases before the date on which the fund replaces the security. Leverage: When a fund leverages its portfolio, the value of its shares may be more volatile and all other risks may be compounded. Derivatives: Investments in derivatives such as futures, options, forwards, and swaps may increase volatility or cause a loss greater than the principal investment. MLPs: Investments in Master Limited Partnerships may be adversely impacted by tax law changes, regulations, or factors affecting underlying assets. No Guarantee: There is no guarantee that the portfolio will meet its objective. Prospectus: For additional information on risks, please see the fund’s prospectus.

 

Performance Data: Performance data quoted backtested results. Backtested Performance was derived from the retroactive application of a model developed with the benefit of hindsight. Backtested performance is no guarantee of future results and current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Please visit www.virtusetfs.com for performance data current to the most recent month-end and the Fund’s standard performance information. Past performance is not indicative of future results.

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Indices / Performance Terminology Used: For more information regarding the underlying data, calculations, or terminology used, please reach out to us. Please CLICK HERE to see a glossary of terminology and indices used.

 

Privacy Policy:  Protecting your privacy and personal information is important to us. Go to www.infracapfunds.com/privacy-policy to view our full policy.

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Past performance is not indicative of future results.

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