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

Brian Sullivan (Anchor) 00:00.310

that's tim urbanowicz he is the chief investment strategist at innovator capital management tim i've got to imagine listen that's apollo they've got their own thing

Brian Sullivan (Anchor) 00:09.030

but it can't be a bad idea for your clients to have a little cash what do they call it dry powder kelly said when things go down they can buy them or should they be a hundred percent invested right now well brian

Tim Urbanowicz (Chief Investment Strategist) 00:20.710

you always want to be focused on managing risk that that is front and center no matter what we're doing especially when we look at the outlook season but brian

Tim Urbanowicz (Chief Investment Strategist) 00:27.470

we also think this year is going to be a very special one for investors where consumers get back in the driver seat we're viewing this as a unicorn year OK you

Brian Sullivan (Anchor) 00:35.470

have a situation what does that mean

Tim Urbanowicz (Chief Investment Strategist) 00:36.950

well investors are going to be double dipping on tax cuts you look at what's coming from the the big beautiful bill they're going to be benefiting retroactively from twenty twenty five which by the way that money is going to be coming in february through april

Tim Urbanowicz (Chief Investment Strategist) 00:47.470

and on top of that you're going to be benefiting from less withholding in twenty twenty six so that's a unique environment we think puts consumers in control spending is driving this economy and something that can push the S and P five hundred higher we got a target of seventy

Tim Urbanowicz (Chief Investment Strategist) 01:00.030

six yeah

Kelly Evans (Anchor) 01:00.870

i i wonder it's it's gone from the last couple weeks going wow did you know these tax refund checks are coming wow did you know the now i'm hearing it from everybody so i'm

Kelly Evans (Anchor) 01:10.190

not saying it's hard to invest when sentiment can swing that wildly but do you think people are getting too bulled up now about the consumer in the next couple of months well i

Tim Urbanowicz (Chief Investment Strategist) 01:17.350

do think you're starting to see that change if you look at consumer confidence it's been down in the train it's been terrible the last print in december looked positive well better better better so you

Tim Urbanowicz (Chief Investment Strategist) 01:27.950

know we think that trend is going to continue with these these tax cuts and if you look at you know different sectors out there discretionary staples these are sectors that haven't done much of anything this year outside of you

Tim Urbanowicz (Chief Investment Strategist) 01:37.990

know the the value plays where customers are value hunting they haven't done much so we think this this really can bring some life back into those stocks and i appreciate

Kelly Evans (Anchor) 01:44.790

you know we're just talking tim seymour had some skepticism about walmart more valuation sorry you like home depot walmart even target turning it around it's coming off that twelve day win streak but you know

Kelly Evans (Anchor) 01:53.670

what i can't get out of my head fifty thousand dollars is the average price visit a new vehicle in this country i think a new vehicle i think that just any vehicle yeah home

Brian Sullivan (Anchor) 02:01.590

prices

Kelly Evans (Anchor) 02:01.950

as we know are way high up fifty percent you know since twenty eighteen so even if we're getting a little extra money next year i i do you think it's going to help enough that it meaningfully changes the trajectory and this affordability crisis that people perceive

Tim Urbanowicz (Chief Investment Strategist) 02:15.630

portability is number one issue it it absolutely is it's certainly been a problem i think that's why we've seen the confidence that has been beaten down so bad but the other

Tim Urbanowicz (Chief Investment Strategist) 02:23.030

thing we have to keep in mind is we're getting to a point right now where we're starting to see the impact of the fed cuts that have taken place over the last year plus they're starting to make their way into the economy hopefully

Tim Urbanowicz (Chief Investment Strategist) 02:34.990

that helps with home prices obviously they don't fed doesn't control the longer end of the yield curve they don't control the ten year so we need to make sure inflation is coming under control but the other thing that

Tim Urbanowicz (Chief Investment Strategist) 02:43.950

we see and and you tend to see inflation that follows wage growth and we've seen wage growth start to come down

Tim Urbanowicz (Chief Investment Strategist) 02:49.870

so that makes us much more optimistic on the fact that we can continue to see inflation coming down and really provide some relief to consumers obviously

Tim Urbanowicz (Chief Investment Strategist) 02:58.870

mortgage rates are a big piece of that that to us is still a big question mark but there are some other bullish signs out there what you

Brian Sullivan (Anchor) 03:05.070

are making a pretty strong bull case for the american economy you're bullish ish on the stock market seventy six hundred is eleven percent historically

Brian Sullivan (Anchor) 03:14.560

the market returns about eight percent a year throwing the dividend yield you get to about eleven percent so you're optimistic and but you're not wildly optimistic it sounds like you're not saying

Brian Sullivan (Anchor) 03:24.510

we're going to be up thirty or forty percent next year it's four year 'cause we've been a three year bull run it's i don't need to tell you that's been pretty incredible it

Tim Urbanowicz (Chief Investment Strategist) 03:32.550

has brian and if you look at the the breakdown of how bull markets play out early on we see valuation expansion drive the rally that's exactly what we've seen this year or sorry the first couple

Tim Urbanowicz (Chief Investment Strategist) 03:42.510

years this year we've seen that baton start to pass to earnings growth we look at at twenty twenty six it's going to be all about earnings growth OK because the starting point is so high and so the reason

Tim Urbanowicz (Chief Investment Strategist) 03:52.270

i think our our target is is not you know twenty percent higher from here is because we don't think you're going to get that boost contributing from valuation expansion

Tim Urbanowicz (Chief Investment Strategist) 04:00.030

it's going to be all about earnings growth and that's what we want to be laser focused on because we just don't see that we actually think valuations are going to track slightly

Kelly Evans (Anchor) 04:07.630

this year