June 2026 Investylitics
Horizon Advisor Network Investment Committee June 8, 2026
Executive Summary
The S&P 500 rose roughly 5.3% in May, capping a historic nine-week winning streak and reaching new all-time highs. Defying the traditional Wall Street adage to "sell in May and go away". Corporate
earnings are now expected to grow nearly 24% for calendar year 2026. Strong earnings growth has allowed stock prices to rise, while the P/E ratio has declined slightly.
Employers added 172,000 nonfarm payroll jobs in May, comfortably beating the more modest expectations of economists. Additionally, available jobs surged to 7.6 million in April—the highest level in nearly two years.
This better-than-expected job growth will likely allow the Federal Reserve Bank to focus on the inflation side of its dual mandate, thus limiting the potential for interest rate cuts in the near term, as the new Fed chair, Kevin Warsh, will lead his first meeting in mid-June.
A number of economic indicators come in
better than expected recently, including real time GDP measurements, manufacturing data and new orders, which is bolstering small business and CEO optimism.
This is juxtaposed against consumer sentiment readings, which are at all-time lows, especially for those in the lower half of income and net worth. Despite this, retail sales and consumer spending continue to show strength, indicating a significant gap between what people say and what they do.
With geopolitical and inflation r
isks still at the forefront, along with elevated oil and gas prices, the committee believes the best way to navigate these uncertain economic times is to ensure you have adequate liquidity, resilience,
and risk management processes built into your portfolio.
The members of the Horizon Advisor Network Investylitics Committee met on the afternoon of Monday, June 8th. Amid the market's rebound and one
of its strongest two-month periods in the last 75 years, we continued to focus on the research and outlooks from market strategists and economists, followed by the committee, while remaining cognizant of the geopolitical and inflation backdrop investors are facing.
The S&P 500 rose roughly 5.3% i
n May, capping a historic nine-week winning streak and reaching new all-time highs. Defying the traditional Wall Street adage to "sell in May and go away". This monthly gain extended a powerful market rally, capped off by a streak of nine consecutive weekly gains—a resilient milestone achieved only four other times in the last 40 years.
The market was powered by strong first-quarter corporate earnings, de-escalating trade tensions, and momentum in Artificial Intelligence (AI) stocks. Corporate earnings are now expected to grow nearly 24% for calendar year 2026, as shown in our first chart below. Strong earnings growth has allowed stock prices to rise, while the P/E ratio has declined slightly. Growing geopolitical optimism over a U.S.-Iran diplomatic resolution helped lower crude oil prices, easing broader inflation anxieties also helped equity performance.
Employers added 172,000 Nonfarm Payroll jobs in May. This significantly outpaced the consensus economist forecast of roughly 80,000 to 85,000 jobs and allowed the national unemployment rate to remain flat at 4.3%. Job growth, especially private payrolls, has continued to show strength, much to the surprise of those expecting job losses due to companies adopting AI.
Job openings rose to a 7-month high of 7.62 million in April, well above expectations of 6.8 million. Openings exceeded job seekers, indicating rising labor demand. Overall labor market data has stabilized in recent months following weaker trends in 2025.
This better-than-expected job growth will likely allow the Federal Reserve Bank to focus on the inflation side of its dual mandate, limiting the potential for interest rate cuts in the near term, as the new Fed chair, Kevin Warsh, will lead his first meeting in mid-June. As you likely know from recent grocery or gasoline prices, U.S. inflation remains elevated, largely driven by a recent surge in energy prices. In April 2026, the Consumer Price Index (CPI) reached 3.8% annually, while the Personal Consumption Expenditures (PCE) price index rose to 3.77%. Both metrics remain notably above the Federal Reserve's 2% long-term target.
A number of economic indicators have come in better than expected recently, including real-time GDP measurements, manufacturing data, and new orders, which is bolstering small business and CEO optimism. Service activity advanced in May, with the ISM Services Index edging higher to 54.5, near its long-term average, while new orders continued to expand. The ISM Manufacturing PMI climbed to a 4-year high in May. While manufacturers continue to face rising price pressures, overall production activity and new orders are improving.
This is juxtaposed against consumer sentiment readings, which are at all-time lows, especially among for in the lower half of income and net worth. Despite this, retail sales and consumer spending continue to show strength, indicating a significant gap between what people say and what they do. However, as you will note in our final chart today, from a historical basis, low consumer sentiment readings tend to be correlated with above average stock market returns over the following year. This is likely due to the fact that consumer sentiment tends to reach its lowest point near the bottom of an economic cycle.
