With Earnings Season Taking Center Stage Are We Past the Worst of the Correction?

NYSE: SPY | SPDR S&P 500 ETF Trust News, Ratings, and Charts

SPY – You knew the bottoming process on this correction would not be easy. Once it seemed like the coast was clear on Wednesday the market tumbled a nasty -2.44% on Thursday. Today was a more enjoyable session with lots of green arrows popping up. They key is not to look day to day…but week to week or even month to month to measure progress. Now let’s turn our attention to recent events to see what is propelling stock prices at this time and what that means for the weeks ahead. Read on below….

(Please enjoy this updated version of my weekly commentary published February 04, 2022 from the POWR Value newsletter).

In that week over week view the S&P 500 (SPY) is +1.56% above last Friday’s tally which is a welcome sit. Gladly POWR Value Portfolio is up +3.58% in that time.

Earnings season is currently taking center stage. There have been some big misses like Meta/Facebook and Goldman Sachs.

But gladly even more impressive beats like Microsoft, Apple and Amazon (and a few of our own in the POWR Value portfolio like Columbia Sportswear today).

The key is that the overall quality of earnings season, with mostly raised guidance for the future, is rebuilding investor confidence that they need to get back to riding the bull.

That’s because with all the negatives recently highlighted like inflation, Fed action, Omicron etc is still not knocking the economy off track. And if that is true…then there is no need to keep hitting the sell button.

Furthermore ISM Services this week came in at a robust 59.9 with New Orders even better at 61.7. Once again, anything above 55 on these ISM reports is a sign of great economic improvement.

ISM Manufacturing earlier in the week was almost as strong as the Services reading.

That economic improvement party continued this morning with a MUCH better than expected Government Employment report.

It was only supposed to show 30,000 jobs added given the typical January release of extra workers hired temporarily for the holiday shopping season. And yet that came in at 467,000 jobs added.

Reity, are you saying the market will just be on a big bull run from here?

No. I am saying the long term picture is bullish. And we will make new highs this year.

What is unclear is the journey to get there because each day is a mystery. And the pattern of positive vs. negative days is nearly impossible to guestimate in advance.

However, if your eyes are firmly set on the positive long term horizon, and your portfolio is loaded up with healthy companies trading at attractive prices, then WHENEVER the bull run unfolds you will be in a position to benefit.

And yes, that is exactly the plan we have in place which is working out pretty darn well.

What To Do Next?

If you’d like to see more top value stocks, then you should check out our free special report:

7 SEVERELY Undervalued Stocks

What makes these stocks great additions to any portfolio?

First, because they are all undervalued companies with exciting upside potential.

But even more important, is that they are all A rated Strong Buys according to our coveted POWR Ratings system. Yes, that same system where top-rated stocks have averaged a +31.10% annual return.

Click below now to see these 7 stellar value stocks with the right stuff to outperform in the coming months.

7 SEVERELY Undervalued Stocks

All the Best!

Steve Reitmeister
CEO StockNews.com & Editor of POWR Value trading service

SPY shares closed at $448.70 on Friday, up $2.10 (+0.47%). Year-to-date, SPY has declined -5.53%, versus a % rise in the benchmark S&P 500 index during the same period.

About the Author: Steve Reitmeister

Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks. More...

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