2026 a 'unicorn' year for investors and consumers will be in control: Innovator Capital's Urbanowicz

Market Outlook - The current year is viewed as a "unicorn year" for investors, with consumers expected to regain control over spending due to upcoming tax cuts [2][3] - The S&P 500 target is set at 7,600, indicating an anticipated increase of 11% from current levels, driven by consumer spending [3][10] Consumer Confidence and Spending - Consumer confidence has been low but is expected to improve with the introduction of tax cuts, which will provide additional disposable income [5][9] - Sectors such as discretionary and staples have underperformed, but the anticipated tax cuts could revitalize these stocks [6] Economic Indicators - Home prices have increased by 50% since 2018, contributing to an affordability crisis, which remains a significant concern for consumers [7] - The impact of Federal Reserve interest rate cuts is beginning to be felt in the economy, potentially aiding in the stabilization of home prices [8] Inflation and Wage Growth - Inflation is expected to decrease as wage growth has started to decline, which could provide relief to consumers [9] - Mortgage rates remain uncertain, but there are positive signs for the economy that could support a bullish outlook [10] Market Dynamics - The current market rally has been driven by valuation expansion, but future growth is expected to rely more on earnings growth rather than further valuation increases [11][12] - The focus for 2026 will shift to earnings growth as the primary driver of market performance, with a slight contraction in valuations anticipated this year [12][13]