August 2026 Investlylitics

Horizon Advisor Network Investment Committee August 17, 2026

Executive Summary

• The S&P 500 finished July essentially flat, posting a marginal absolute gain of just over 6 points and closing at 7,489.72 on July 31. This came amidst a notable mid-month rally followed by a sharp rotation out of mega-cap growth and artificial intelligence stocks.
• Tensions in the Middle East and the collapse of a ceasefire on July 8 led to the temporary closure of the Strait of Hormuz. This sparked risk-off behavior in equities but pushed West Texas Intermediate crude oil up nearly 25%, ending the month above $84 per barrel.
• The combination of moderating inflation and a disappointing jobs report has likely given the Federal Reserve Bank the ability to be patient and wait for additional data instead of raising interest rates in September, as was widely expected before the reports.
• Second quarter earnings season is nearing its end, with 89% of S&P 500 companies reporting. The blended earnings growth is a robust 50%, and 85% of firms have exceeded expectations. FactSet projects EPS growth of 30.6% this year, before decelerating to 12.7% in 2027.
• With markets once again flirting with new all-time highs, the committee believes it is a good time to rebalance portfolios and raise cash for any near-term liquidity needs. We would not be surprised to see additional bouts of volatility in the coming months, with the geopolitical backdrop and the upcoming midterm elections.

The members of the Horizon Advisor Network Investylitics Committee met on the afternoon of Monday, August 17. While corporate earnings and many economic reports showed resilience and strength, we continue to face an uncertain geopolitical backdrop, and the upcoming midterm elections could create bouts of volatility. During today's meeting, we reviewed portfolio performance and market outlooks from the economists and market strategists our committee follows.

The S&P 500 finished July essentially flat, posting a marginal absolute gain of just over 6 points, closing at 7,489.72 on July 31. This flat monthly return came amidst a notable mid-month rally followed by a sharp rotation out of mega-cap growth and artificial intelligence stocks. This volatile, range-bound performance followed a significant rotation of investor capital away from high-flying mega-cap tech stocks and into value sectors. In contrast, the Equal-Weighted S&P 500 gained 1.1% in July.

Tensions in the Middle East and the collapse of a ceasefire on July 8 led to the temporary closure of the Strait of Hormuz. This sparked risk-off behavior in equities but pushed West Texas Intermediate crude oil up nearly 25%, ending the month above $84 per barrel. While oil prices remain above pre-war levels, the worst-case forecasts of oil approaching or exceeding $150 per barrel have not materialized to date. This is largely because there was a global oil surplus before military action began, and because oil producers can ship oil through outlets other than the Strait. The committee will continue to monitor this closely, as previous releases of oil from the United States Strategic petroleum reserve in 2022, when Russia invaded Ukraine, and again this year have left it at levels not seen in more than 40 years, as you can see in our first chart below.

The combination of moderating inflation and a disappointing jobs report has likely given the Federal Reserve Bank the ability to be patient and wait for additional data instead of raising interest rates in September, as was widely expected before the reports. The July 2026 Consumer Price Index report from the US Bureau of Statistics showed headline inflation rose 0.1% for the month, putting the 12-month annual rate at 3.4%. Core CPI, which excludes volatile food and energy, increased 0.2% monthly and 2.5% year-over-year, as shown in our next chart below.

Additionally, the July 2026 Bureau of Labor Statistics jobs report showed the US economy unexpectedly shed 23,000 jobs, with the unemployment rate ticking down to 4.1%. This decline was driven by workers exiting the labor force rather than strong hiring, creating a stark contrast with the weekly jobless claims data, which shows a highly stable "slow hire, slow fire" environment. In fact, we recently experienced 3 consecutive weeks where the number of US individuals filing for first-time unemployment benefits fell below 200,000, something that had not happened since October 1969, when our population and employee base were substantially smaller.

On the positive side, second quarter earnings season is nearing its end, with 89% of S&P 500 companies reporting. The blended earnings growth is a robust 50%, and 85% of firms have exceeded expectations. FactSet projects EPS growth of 30.6% this year, before decelerating to 12.7% in 2027. The S&P 500 has risen 14% YTD, yet the forward P/E ratio has fallen from 22.2x at the start of the year to 20.2x, just above the 10-year average of 19.5x. Earnings growth expectations are climbing faster than prices, compressing the multiple. Additionally, mid-cap, small-cap, and foreign stock indices are trading at even lower multiples than their large-cap brethren, as shown in our final chart today.

Beyond corporate earnings strength, both the manufacturing and service sides of the economy are doing well, and small business optimism continues to rise. Businesses also report planning to hire more workers in the coming months, despite ongoing efficiency and productivity gains from technology and AI investments. This combination bodes well for the economy in the near term and likely reduces recession risk in the coming months.

With markets once again flirting with new all-time highs, the committee believes it is a good time to rebalance portfolios and raise cash for any near-term liquidity needs. We would not be surprised to see additional bouts of volatility in the coming months, with the geopolitical backdrop and the upcoming midterm elections. The committee will continue to monitor events closely. As always, should you have any questions about your family's unique situation, please reach out to your advisor. We trust and appreciate your continued confidence. Make it a great day!

The views stated in this piece are not necessarily the opinion of Cetera Advisors LLC and should not be construed directly or indirectly as an offer to buy or sell any securities. Due to volatility within the markets, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.
Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing.
A diversified portfolio does not assure a profit or protect against loss in a declining market.

INVESTYLITICS TEAM OF HORIZON ADVISOR NETWORK

Jesse Hurst - Senior Wealth Manager - Chair, Impel Wealth Management

Nathan Ollish - Senior Financial Advisor - Impel Wealth Management

Clint Gautreau, Financial Advisor - Horizon Financial Group

Kevin Myers, Financial Advisor - ATL Global

Grace Hayden MacNaught, Financial Advisor - The Planning Studio

Dusty Green, Financial Advisor - Spencer Financial Inc.

Sincerely,
Jesse W. Hurst, CFP®, AIF®
Senior Financial Planner and CEO

*Award Recipient Jesse Hurst

Forbes: Best-in-State Wealth Advisors Award received by Jesse Hurst, Senior Wealth Advisor, (2018-2024). The Forbes ranking of Best-In-State Wealth Advisors, developed by SHOOK Research, is based on an algorithm of qualitative data, rating thousands of wealth advisors with a minimum of seven years’ experience and weighing factors like revenue trends, assets under management, compliance records, industry experience, and best practices learned through telephone and in-person interviews. Portfolio performance is not a criteria due to varying client objectives and lack of audited data. Neither Forbes nor SHOOK receive a fee in exchange for rankings. Research summary as of April 2024: - 44,990 nominations received, based on thresholds - 23,876 invited to complete online survey - 20,412 telephone interviews - 4,926 in-person interviews at Advisor's location - 1,507 virtual interviews. Listing in this publication and/or award is not a guarantee of future investment success. This recognition should not be construed as an endorsement of the advisor by any client. No compensation was provided directly or indirectly by the recipient for participation or in connection with obtaining or using the third-party rating or award.

¹ This recognition and the due–diligence process conducted are not indicative of the advisor's future performance. Your experience may vary. Winners are organized and ranked by state. Some states may have more advisors than others. You are encouraged to conduct your own research to determine if the advisor is right for you.

² Portfolio performance is not a criterion due to varying client objectives and lack of audited data. SHOOK does not receive a fee in exchange for rankings.