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CLA OUTLOOK

Key Insights for Sound Financial Strategies

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FEBRUARY 16 WEEKLY INSIGHTS
Dow breaks 50,000 while S&P 500 struggles with 7,000
  • Equities continue to be supported given improving manufacturing activity, with the ISM manufacturing index jumping to 57.1 in December from 47.4, its highest reading since 2022.
  • The Dow Jones Industrial Average — a more concentrated, blue-chip index with greater industrial exposure — surged past 50,000 and is up 4.4% year-to-date while the S&P 500 nears the 7,000 level, rising 1.8% YTD. 
  • Dividend strategies outperformed (up 9.5% YTD) as they contain manufacturing sensitive cyclicals and overlap with the Dow Jones constituents. 
  • CLA believes equity allocations should be diversified across regions, market cap, and dividend strategies. We avoid chasing concentrated bets, such as gold and silver. (Source: ISM, Morningstar)
Stronger payroll number signals reverse of a recent trend
  • U.S. employers added 130,000 jobs in January, the largest gain in over a year and a reversal of slowing numbers.
  • The unemployment rate held at 4.3%, reinforcing the view the labor market is holding steady.  
  • Job gains were concentrated in health care and social assistance while financial activities and federal government employment posted notable declines. 
  • Wage growth remained contained with average hourly earnings up 0.4% month-over-month and 3.7% year-over-year — supportive of real income growth without reigniting inflation pressures. (Source: U.S. Bureau of Labor Statistics)
Lower taxes with retirement plan contributions
  • Contributing to your retirement account is a good practice that also lowers your current tax bill.  
  • Traditional 401(k) plan contributions reduce adjusted gross income dollar-for-dollar, because they are made with pretax income and excluded from taxable wages.
  • Contributions to a traditional IRA may provide the same reduction but are subject to income limits and become only partially deductible or non-deductible above certain thresholds. (Source: CLA)
Develop strong financial strategies
Tune in to the CLA Outlook for 2026 as we discuss timely topics around policy, the economy, and market performance.
Read the CLA Outlook
Strategic Opportunities
The Big Picture for 2026
The CLA Outlook signals a turning point: stabilized inflation, growth above trend, and easing interest rates. Explore the key forces influencing portfolios in the year ahead.
  • Economic outlook
    Growth is back on the horizon after three years of higher interest rates and restrictive Federal Reserve policies, with AI helping to transform industries.
  • Fiscal policy
    The rising U.S. deficit remains a key concern as government spending continues to outpace revenues — watch for this to be a focal point heading into midterm elections.
  • Fixed income outlook
    Lower interest rates should be a tailwind to bonds in 2026, though consider credit quality and duration when building high-quality income portfolios.
  • Equity outlook
    Despite elevated stock valuations, led by tech-dominant Magnificent-7 stocks, equities remain compelling because of strong earnings growth and a robust economic backdrop.
  • Alternatives outlook
    Lower interest rates favor private equity and private real estate, while private credit can warrant caution. Manager selection and due diligence remain critical.
  • We can help
    No matter your financial position, incorporating sound tax and wealth advisory could help you achieve more.
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