Weekly Market Commentary

Weekly Market Commentary for

May 11, 2026

What a Difference a Month Makes

Stocks continued their advance for a sixth-consecutive-week. Just a little over a month ago, U.S. stocks took a beating over the war with Iran and the anticipated drag higher oil prices might have on the global economy. So far, that has not materialized. The stock market remains strong driven by significantly higher corporate profitability.

The Labor Department announced April's jobs report last week. The department said the U.S. economy added a whopping 115,000 new jobs in the month of April. Economists polled by the Wall Street Journal expected the figure to be just 55,000. That strong figure is in addition to the 185,000 new jobs created in the prior month of March. Economists are surprised at just how strong hiring has been as many were concerned about a gradual global economic slowdown fueled by higher energy costs. These concerns are still present but have not shown up in any data. The official unemployment was unchanged at 4.3%. The chart below from the Labor Department shows how strong job growth has been.

One question I am frequently asked is, "What is driving the stock market higher?" I understand the confusion investors have. There is no shortage of bad headlines globally to cause concern. However, in the end, the market looks at empirical data. That data says companies are doing very well. The earnings-per-share consensus for the S&P 500 in 2026 now stands at $327.87 (a record high). For 2027, it's estimated to be $380.79. That could be the reason U.S. companies are hiring more than analysts expected.

The Markets and Economy

The U.S. trade deficit grew in March as both imports and exports were higher. The $60.3 billion increase in the trade deficit shows how strong demand is in the U.S. even as the threat of trade tariffs continues.

According to pollster Gallup. the percentage of Americans who say their financial situation is getting worse increased to 55% in April. That's the highest reading since Gallup began tracking in 2001.

The economy in Hong Kong grew at its highest rate in five years for the first quarter. Exports were cited as the key driver of the 5.9% growth.

While overall layoffs in the U.S. are down 10% this year, AI has helped tech companies eliminate 85,000 jobs.

A federal trade court struck down President Trump's newly enacted tariffs. The court said the president didn't have the authority to enact the new global tariffs which he announced after the U.S. Supreme Court struck down his previous attempt at imposing tariffs.

Note: All figures exclude reinvested dividends (if any). All market close data sourced from the Wall Street Journal.

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System.

You cannot invest directly in an index. Index returns do not include fees and consequently may not be representative of any specific investment.

This newsletter was prepared by David M. Kover. The views expressed are merely opinion and are subject to change without notice. The information is provided for educational and information purposes only and is not intended as investment advice or to predict future performance.

All investing involves risk. Consult your financial professional before making any investment decision.

Past performance does not guarantee future results.

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Sincerely,

David M Kover, CFP®

OneDigital Investment Advisors LLC

Offices in Chicago, Naples, & Valparaiso

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