Eddie Ghabour on Housing Market Turnaround and 2026 Economic Outlook

Housing Market Recovery

• 🏠 The housing market, particularly for homebuilders, has faced two difficult years but is showing signs of turning around.
• 📈 Chances of a third bad year are considered very low, presenting a contrarian investment opportunity with significant upside.
• 💡 The administration is committed to housing, recognizing its importance for the macroeconomy.
• 🚀 Housing is expected to be a significant winner in the upcoming economic cycle, with excitement for this position in 2026.

Investment Strategy

• 📊 For clients, the ITB ETF is recommended as a prudent, risk-adjusted way to invest in homebuilders, offering handsome returns.
• 🎯 While individual stocks like Hovnanian have seen significant jumps (up 26% month-to-date), the ETF provides a diversified basket.

Market Outlook for the Year

• 📈 The S&P 500 may see double-digit returns, but the year will likely present a tale of two stories.
• ⚠️ A potential "air pocket" or correction in technology is anticipated in late first quarter due to high earnings expectations.
• ⚡ After navigating the tech correction, the market is expected to reaccelerate, favoring economically sensitive areas.

Sector Performance

• 💡 The bull market in technology remains intact, but a slowdown in the rate of earnings growth could cause temporary indigestion.
• 🚀 Conversely, areas like small caps, financials, and homebuilders have a low bar set for growth, suggesting potential for accelerated performance.
• 💰 Mathematically, areas with accelerating growth rates tend to perform well.
• 📈 The market is dynamic, with companies like Alphabet (Google) approaching significant market capitalization milestones.