February 2026 Investylitics

Horizon Advisor Network Investment Committee February 5, 2026

Executive Summary

The major U.S. stock market indices finished January 2026 with positive gains, signaling a bullish start to the year. The Dow Jones Industrial Average led the blue-chip performance with a 1.7% increase, while the S&P 500 rose 1.4%.
Diversification has continued to work, with foreign stocks, emerging market stocks, commodities, and precious metals all outperforming the US stock market. This has enabled broadly diversified portfolios to achieve strong relative returns without taking significantly more risk.
U.S. weekly unemployment claims and continuing claims indicate a generally stable, "low-hiring, low-firing" labor market. Weekly and continuing claims remain within a low, historical range, indicating that companies are not aggressively reducing staff.
As of early February 2026, the Goldman Sachs US MAP Surprise Index has shown significant strength, recently reaching its highest level in nearly a year. This indicates that U.S. economic data has consistently outperformed most analysts' forecasts at the start of the year.
Finally, the financial media, the markets, as well as economists and market strategists are responding to President Trump's appointment of Kevin Warsh to be the new Federal Reserve Bank Chairman. There is much speculation about how he will try to reshape Fed policy in his new role.

The Horizon Advisor Network Investylitics Committee members met on the afternoon of Thursday, February 5th. Given the recent political and economic headlines, we were happy to share and discuss the research from the various market strategists and economists that the committee follows. The major U.S. stock market indices finished January 2026 with positive gains, signaling a bullish start to the year. The Dow Jones Industrial Average led the blue-chip performance with a 1.7% increase, while the S&P 500 rose 1.4%. Historically, a positive January has led to average full-year gains of roughly 15% or more. In contrast, years with a negative January have seen an average annual return of only about 2%.

The S&P 500 Equal Weight Index significantly outperformed the standard market-cap-weighted S&P 500 Index, signaling a notable broadening of the market rally beyond mega-cap tech stocks. The index's roughly 2% outperformance was driven by a rotation into lower-priced, economically cyclical sectors and value stocks. Additionally, in January 2026, small-cap stocks (represented by the Russell 2000 index) outperformed large-cap stocks (represented by the S&P 500) for 14 consecutive trading days. This historic streak marked the longest period of small-cap daily outperformance since May 1996.

Corporate earnings have continued to surprise to the upside for the fourth quarter 2025 reporting period. To date, approximately 59% of S&P 500 companies have reported, with 76% reporting a positive EPS surprise and 73% reporting a positive revenue surprise. The blended (year-over-year) earnings growth rate for the S&P 500 is 13.0%. If this level holds, it will mark the 5th consecutive quarter of double-digit earnings growth for the index.

Measures of economic growth have continued to exceed expectations as well. As of early February 2026, the Goldman Sachs US MAP Surprise Index has shown significant strength, recently reaching its highest level in nearly a year, as shown in the chart below. This indicates that U.S. economic data has consistently outperformed most analysts' forecasts at the start of the year.

The committee members also noted that U.S. weekly unemployment claims and continuing claims indicate a generally stable, "low-hiring, low-firing" labor market. Weekly and continuing claims remain within a low, historical range, indicating that companies are not aggressively reducing staff. Also, the ISM Manufacturing PMI accelerated to a 41-month high of 52.6 in January. It was the first expansionary reading in 11 months, and the largest monthly increase since June 2020, driven by a surge in new orders. This is reflected in the US recession dashboard below, from our friends at ClearBridge Investments. The overall signal remains green, indicating near-term economic growth.

Finally, people are responding to President Trump's appointment of Kevin Warsh to be the new Federal Reserve Bank Chairman. The financial markets and media have responded to the January 30, 2026, nomination with a mixture of relief over his “institutional experience” and sharp volatility in specific asset classes. Major outlets like Bloomberg and The Wall Street Journal highlighted that Warsh is a "known quantity" who served as a Fed governor from 2006 to 2011. Many analysts described the pick as the "best possible" among candidates for maintaining market credibility. We believe there will continue to be speculation about how he will try to reshape Fed policy in his new role in the coming weeks.

The committee members are cautiously optimistic about the trajectory of economic growth and corporate earnings, as well as the markets' early-year performance. It has been encouraging to see the markets continue to move higher, even as some of the biggest and most visible tech and AI companies see their stock performance lag the broader indexes. We continue to believe that disciplined diversification, along with periodic rebalancing to take advantage of the inevitable bouts of market volatility, remains your best option for reaching your long-term financial goals

The committee members appreciate your continued trust in our team and our processes. We stand ready to answer questions or help you with your family's unique situation. Please reach out if there is any way we can help.

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.

Additional risks are associated with international investing, such as currency fluctuations, political and economic stability, and differences in accounting standards.

Cetera does not offer direct investments in gold/silver/cooper (commodities). Commodities are volatile investments and may not be suitable for all investors.

The Russell 2000 is a stock-market index measuring the performance of 2000 small-capitalization stocks. It represents the 2000 smallest companies in the Russell 3000 Index, which in turn represents the 3000 largest companies in the U.S. Thus, the Russell 2000 is a barometer of small-cap stocks. Though small, the companies represented by the Russell 2000 are not the smallest of the small as they are not penny stocks. The Russell 2000 is weighted by the market capitalization of the stocks.

MSCI EAFE – Designed to measure the equity market performance of developed markets (Europe, Australasia, Far East) excluding the U.S. and Canada. The Index is market-capitalization weighted.

The Goldman Sachs MAP Surprise Index (Macro Activity Proxy) is a proprietary, daily indicator that measures the strength and importance of economic data releases relative to market expectations.

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.