Aurora Financial Strategies

05/28/2026

The inflation story may not be as under control as the market hoped.

Oil inventories are shrinking quickly, and that pressure is starting to work its way through the economy.

April CPI came in hotter than expected, with headline inflation running at a 3.8% annualized pace. Producer prices were even stronger, with PPI up at a 6% annualized rate. Businesses are getting squeezed.

You can already see it showing up in food prices. Fertilizer costs have surged alongside energy, and food inflation just posted its biggest increase since August 2022.

The bigger issue is what happens next.

Companies only have two choices when input costs rise:

Accept lower margins
Raise prices

Most eventually choose the second.

At the same time, the economy still looks fairly resilient. Retail sales and labor data remain solid, and manufacturing activity continues to benefit from heavy data center investment.

That combination matters because resilient demand plus rising input costs is not a great setup for inflation coming down quickly.

Rates have started moving higher again as markets price in a greater chance the Fed may need to tighten further this year.

And higher rates eventually hit the most interest-rate-sensitive parts of the economy first:
housing, autos, and highly leveraged businesses.

The market still seems positioned for a smooth inflation slowdown. The data may be pointing somewhere else.

Read more in our newsletter: https://aurorafinancialstrategies.us10.list-manage.com/subscribe?u=235c8b31ff2d0621142c2d43c&id=4c95f21516

05/26/2026

Semiconductor stocks have become a market leader once again.

As of 5/21/26, SOXX (iShares Semiconductor ETF) is up more than 74% YTD and over 154% in the last 12 months, according to FactSet.

But investors should ask an important question:
How much of this earnings growth is actually sustainable?

Right now, a large portion of semiconductor profits are being driven by shortages- especially in commoditized chips.

Memory has historically been one of the most cyclical industries in the market:
High profits attract new capacity.
New capacity eventually creates oversupply.
Oversupply crushes pricing power.

We’ve seen this cycle repeatedly over the last several decades.

And while these gains are certainly boding well for some investors, higher chip prices affect electronics, industrial equipment, and consumer products- leading to pushback and pressure by both manufacturers and consumers.

We suspect that these shortage-driven profits will not be long-lasting, and prices will likely stabilize again in the future.

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05/21/2026

Business spending continues to be a major driver of economic growth, fueled largely by the ongoing AI infrastructure buildout.

March data showed strong momentum:
• Business spending on equipment and structures increased 10.4%
• Equipment spending alone surged 17%
• Factory orders rose 1.5% from February

The key question moving forward is sustainability.

Can this level of AI-related investment continue long term, or will other parts of the economy need to step up to maintain growth momentum?

Right now, corporate investment is carrying significant weight in the economy. The next phase will depend on whether this spending remains durable and whether broader economic demand can keep pace.

05/20/2026

The stock market has delivered extraordinary returns over the last 15 years, but history reminds us that strong runs don’t last forever. Today’s market looks increasingly concentrated, expensive, and heavily dependent on a handful of technology companies tied to the AI infrastructure boom.

We’ve seen this story before.

During the dot-com era, investors believed internet growth would justify any valuation. The technology changed the world, but many investments still failed because expectations ran too far ahead of reality.

That doesn’t mean investors should avoid equities. It means diversification and discipline matter more than ever.

At Aurora Asset Management, we believe opportunities exist beyond the crowded corners of the market, in areas where valuations are lower and expectations are more reasonable. Small-cap value, energy, defense, housing, telecom, and other overlooked sectors may offer attractive long-term potential.

Read our latest blog for a deeper look at today’s market risks and where we’re finding opportunities. auroramgt.com/asset-management-blog/stock-market-investors-need-a-different-approach

Explore the growing risks facing today’s stock market, from inflated valuations and AI infrastructure spending to inflation pressures and market concentration. This article compares the current AI boom to the dot-com era and explains what investors can learn from past market cycles when building p...

05/14/2026

April’s CPI report highlights a growing challenge for the Federal Reserve and the U.S. economy.

Consumer prices rose 3.8% year-over-year in April, with energy and food costs increasing sharply. Even excluding those categories, inflation still climbed 2.8%, remaining above the Fed’s 2% target.

At the same time, unemployment remains very low, making it harder for the Fed to justify cutting interest rates. Persistent inflation, especially driven by an oil supply shock, strengthens the case for keeping rates elevated because lower rates could push prices even higher.

Meanwhile, wages are not keeping pace with inflation, meaning many workers are losing purchasing power.

The Fed is now balancing two competing priorities: stable prices and full employment.

05/13/2026

Devon Energy and Coterra Energy have completed their merger, marking a major transaction in the energy sector. Under the terms of the deal, shareholders of Coterra Energy (CTRA) received 0.7 shares of Devon Energy (DVN) for each CTRA share held, along with cash for any fractional shares.

The combined company is expected to deliver substantial operational synergies, significant cost savings, and enhanced long-term value through accelerated capital returns to shareholders. Investors across both companies may see portfolio, tax, and valuation implications as a result of the transaction.

If you held CTRA or DVN shares during the merger, there may be important financial considerations and opportunities to review. Read our latest blog for a deeper breakdown of what this merger means for shareholders, potential tax impacts, and what investors should watch moving forward.

Learn how the completed merger between Coterra Energy (CTRA) and Devon Energy (DVN) could benefit shareholders through improved operational efficiency, reduced costs, higher profitability, dividend growth, and an $8 billion share buyback plan.

05/07/2026

Consumer and housing data offered some encouraging signs in March, though the drivers are worth a closer look.

Retail sales rose 1.7% month over month, with gains led by gas stations and furniture stores. Higher gas prices played a role, and larger-than-usual tax refunds likely gave spending an added boost.

In housing, pending home sales increased 1.5% from February. Contract signings moved higher even as mortgage rates remained elevated, suggesting some resilience in buyer activity.

The trend is positive on the surface, but the underlying factors will matter in determining how sustainable this momentum really is.

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05/05/2026

Everyone knows they should be saving for retirement, but far fewer people understand where that money should actually go.

From brokerage accounts to IRAs to employer-sponsored plans, each option comes with different tax advantages, contribution limits, and levels of flexibility.

Choosing the right mix isn’t just about saving more. It’s about saving smarter.

In our latest blog, we break down:
• The key types of retirement accounts
• How each one works
• When and why you might use them

If you’ve ever wondered whether you’re putting your money in the right place, this is a great place to start.

Check out our latest blog: https://www.aurorafinancialstrategies.com/blog/the-power-of-planning-saving-for-retirment

Learn how to save for retirement with this guide to IRAs, 401(k)s, brokerage accounts, and more. Understand your options and build a smarter plan.

04/30/2026

The labor market looks relatively stable on the surface, but there are some areas worth watching more closely.

Growth remains heavily reliant on hiring in healthcare and education, which leaves the broader picture a bit more vulnerable than it may appear at first glance.

There are also some mixed signals coming through the data:
• Initial unemployment claims ticked up slightly
• The Fed’s Beige Book highlighted a growing shift toward temporary and contract workers as companies prioritize flexibility
• At the same time, ADP reported accelerating job growth

Taken together, it is a reminder that while headline strength is holding, the underlying dynamics are becoming more nuanced.

04/28/2026

Stock markets have moved higher in recent weeks, with semiconductor stocks leading the way. A lot of this momentum seems tied to expectations that shipping through the Strait of Hormuz could resume soon.

Even if that happens, oil prices may not fall back to where they were before the conflict. Restarting production and getting supply chains fully up and running takes time, and the risks around energy disruption still feel underappreciated.

On the earnings side, companies are expected to report strong results as the season picks up. Demand tied to the data center supply chain continues to be a major driver. At the same time, the long-term economics behind this wave of capital spending are still not entirely clear.

History shows that big infrastructure buildouts can create real, lasting value. But they can also come with meaningful risks for investors.

This feels like an environment where caution matters just as much as growth.

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