HPWG January 2026 Market Update Podcast

Todd Hoffman: Hello, and welcome to the January edition of the Hoffman Private Wealth Group Podcast. My name is Todd Hoffman. I am a Certified Portfolio Manager and Certified Financial Planner, and the Founder and Managing Director of Hoffman Private Wealth Group at Steward Partners. Thank you for joining us, and Happy New Year.

Jenna: Happy New Year, everyone. Todd, it’s great to be back. How was your holiday break?

Todd: It was great. Time with family, some travel, and I had a chance to reset before the new year. I value stepping back at year-end to reflect on where markets have been and where they may be headed. So how were your Christmas and New Year's?

Jenna: It was great.  I took a cruise and enjoyed Christmas with the kids. So, do you have any interesting New Years resolutions this year?

Todd: Well, one of the things I did was go skiing for a few days and my body told me I really need to step up my workouts. So, while working out is not an original new year’s resolution, I thought this year maybe I would try some new activities to keep it interesting. Maybe take a boxing class or find something with a core workout. Professionally, my resolution this year is to spend more time with the newer people on the team. We have had some super sharp people join the team over the last couple of years and I want to help them grow in their careers.  What about you?

Jenna: Mine is also always to get into better shape but also to try to carve out more time to focus on myself this year. You know just to have a little more me time. Professionally, I want to work on learning new things, like new advanced estate and tax planning concepts.   

Todd: That’s great, you can never run out of things to learn there.

Jenna: So, let’s jump into it. Todd, we finished 2025 with strong returns, but the fourth quarter—especially in technology and AI—we did experience a lot of volatility and a small pullback. What do you think drove that?

Todd: I agree 2025 was a strong year overall, including for our clients, despite the late-year volatility. I was hoping for a traditional year-end rally, but it never materialized.

As you mentioned, Technology and AI, which led the market for most of the year, were the most volatile in the end. That wasn’t a total surprise considering the sharp gains after the spring tariff selloff. In hindsight, the market needed a period of consolidation to reset expectations, flush out short-term traders, and give long-term investors a better entry point.

The key takeaway is that fundamentals did not deteriorate. Earnings remain solid, balance sheets are strong, and capital spending on AI and infrastructure continues to grow.

Jenna: Now that we’re in 2026, do you expect continued volatility, or do you think markets settle down and move higher?

Todd: Looking ahead, there are four key drivers supporting a constructive outlook. First, corporate earnings remain strong. Second, we now have the full-year benefit of the Trump tax cuts enacted in mid-2025. Third, employment remains strong, which continues to support consumer spending. Finally, President Trump is expected to appoint a new Federal Reserve Chair, increasing the probability of a more accommodative monetary policy and potentially lower interest rates.

Taken together, these factors create a supportive backdrop for 2026.

Jenna: So, are you saying the markets have reached a near-term bottom?

Todd: From your lips to God’s ears. Unfortunately, I still expect some near-term volatility, especially until earnings season gets underway. Historically, it can often take a few weeks of strong earnings reports for the markets to restore upward momentum.

So far, according to FactSet, the data during the 4^th quarter is encouraging. Consumer spending held up, factory orders were strong, imports hit new record levels, and auto sales were resilient. Additionally, Balance sheets remain healthy, and capital spending continues to grow. Overall, I expect markets to trend higher not only for first quarter, but I expect them to remain constructive for the year ahead.

Jenna: Beyond technology, where do you see opportunities?

Todd: I expect market leadership to broaden. Industrials continue to look strong. Select Consumer Discretionary companies continue to benefit from ongoing consumer strength. Utilities which are focusing on expanding power capacity to support AI-driven demand remain attractive, as do infrastructure-related areas.

Healthcare and Energy appear inexpensive, but I would like to see additional catalysts before allocating significant capital. In the case of healthcare, I think we need to see a new bill pass and in the energy sector, I think we need to see the price of Oil firm up.

I also like the Defense sector, particularly with the restocking of new high-tech missiles and ammunition, drones and aircraft.  President Trump has also been tweeting and talking about massive new ship building. This would be great for the Northeast, but I am not confident he can pass a huge new budget for them, given so far, they can’t even pass a new healthcare bill.

Jenna: The International markets performed much better in 2025 than in any recent year according to FactSet. Do you think that trend continues?

Todd: The International markets benefited from a weaker U.S. dollar and more aggressive rate cuts abroad than in the US. They also followed a long period of underperformance relative to U.S. equities, starting the year at attractive valuations.

Tariffs still pose a risk, but most are already in place, making a repeat of the 2025 shock unlikely. Some near-term volatility is still possible, as the Supreme Court is expected to rule on the validity of President Trump’s authority to impose certain tariffs and on any procedural requirements if that authority is challenged.

If the Court determines that proper authority was lacking, it is reasonable to expect a transition period allowing the administration time to pursue legislative approval, with existing tariffs likely remaining in place during that process. Overall, international markets remain attractive in 2026.

Jenna: Where do you see the U.S. dollar going this year?

Todd: Most analysts expect lower rates and higher deficits to pressure the dollar modestly lower. If that occurs, it could again be a tailwind for international equities and U.S. multinational companies.

Jenna: How do bonds and fixed income look for 2026?

Todd: The outlook for bonds is increasingly attractive. Yields remain well above long-term averages, and credit conditions remain healthy. If interest rates fall, bond prices should rise, creating total return potential.

Municipal bonds look particularly compelling. Heavy issuance in 2025 weighed on prices, but that supply is being absorbed. As that continues, prices should improve.

Bonds also serve as a source of liquidity during periods of equity market volatility. Drawing from bonds can help avoid selling equities at depressed prices, improving long-term portfolio outcomes.

Jenna: So would you say a fair summary is that strong fundamentals, supportive policy, and improving financial conditions point to a constructive 2026.

Todd: Exactly.

Jenna: Any jokes to start the year?

Todd: Sure, what do you call a snowman party on New Year’s Eve?

Jenna: What?

Todd: A Snow Ball!

Jenna: Ha!

Todd: Why is partying in Times Square overrated?

Jenna: Why?

Todd: Because they drop the ball every year.

Todd: ok final one - Why do birds fly south for New Year?

Jenna: Why?

Todd: Because it's too far to walk!

Jenna: No more please! So, do you have any closing comments?

Todd: I do, as we move through 2026, our focus remains the same—protecting capital, managing risk, and positioning portfolios to participate in long-term growth. Also, prudently maximizing income and minimizing taxes, wherever possible. Markets will always involve uncertainty, but disciplined planning and thoughtful diversification matter far more than short-term headlines.

As the investment landscape continues to evolve, we will evolve with it. If you know anyone who may benefit from our services, please consider making an introduction to us. It is simple, you can schedule a call with the three of us, or if they are local, we can meet in person. If this is not possible, please send a three-way email introduction and we will follow up directly. We really appreciate it, and we will work hard to make whoever you refer to us appreciate that you did. Remember, a lot of people really need good help and assuming you feel we have helped you and your family, introducing us may be doing them a huge favor.  

If you have questions about your portfolio, your income strategy, or how your plan is positioned for 2026, let’s talk and do a review. We look forward to speaking with you and assisting in any way we can.”

Thank you for listening. We appreciate your trust and wish you a healthy, successful, and prosperous 2026.

Jenna: Thank you for listening to the January Hoffman Private Wealth Group Podcast. If you enjoy our podcast, please feel free to share it with a friend, colleague, or family member.