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

Market Outlook & Investment Strategy - Innovator Capital Management believes 2026 will be a unique year for investors, with consumers benefiting from tax cuts retroactively from 2025 and less withholding in 2026 [2][3] - The firm anticipates consumer spending will drive the economy and potentially push the S&P 500 to a target of 7,600 [3] - Managing risk remains a central focus for the firm, especially when considering the market outlook [2] - The firm is optimistic but not wildly so, projecting an S&P 500 target that aligns with historical market returns of approximately 8% plus dividend yield to reach about 11% [10] Consumer & Economic Factors - Consumer confidence has been low, but recent data shows signs of improvement, potentially driven by tax cuts [5] - Affordability is a major concern, particularly regarding high home prices, which have increased significantly since 2018 [7] - The impact of previous Federal Reserve interest rate cuts is expected to gradually influence the economy, potentially aiding with home prices [8] - Wage growth is slowing down, which could lead to a decrease in inflation, providing relief to consumers [9] Sector & Valuation Analysis - Discretionary and staples sectors have underperformed, but the firm believes they could experience a resurgence due to increased consumer spending [5][6] - Early bull market rallies are driven by valuation expansion, but the focus is shifting to earnings growth, particularly in 2026 [11][12] - The firm anticipates a slight contraction in valuations this year, emphasizing the importance of focusing on earnings growth [13]