EarningsBeats.com Digest for January 19, 2022
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Trading Places Live!
Due to unforeseen circumstances, Trading Places Live is cancelled today. We will resume next Monday, January 24th at 9:00am ET. See you then!
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Join Us For Today's Event...
Model ETF Portfolio
Wednesday, January 19th at 5:30pm ET
EarningsBeats' Chief Market Strategist Tom Bowley will unveil the next batch of ETFs hand-selected with the goal of outperforming the S&P 500. Tom will discuss his strategy in selecting and weighting the various ETFs to maximize their cumulative return.
Needing to have a balanced portfolio to reduce risk is paramount in 2022. Thankfully, we're hosting a timely event today for all of our members - including those on our 30-day trial. You can sign up for a 30-day NO COST trial by clicking the link below which will guarantee you a seat to the webinar, as well as all of the features of an EarningsBeats membership. Don't think twice!
When Will This Selling Episode End?
That's the million dollar question. Actually, for Wall Street, it's more of a billion or even a trillion dollar question. Growth stocks have been responsible for the lion's share of gains during this secular bull market. The reason is fairly simple. Interest rates have steadily declined, making the future earnings of growth companies more
valuable. Even though rates have been rising, we're still very close to historic lows. I don't view rising rates as much of a threat to the long-term secular bull market that we've enjoyed for nearly a decade. But the periodic worry of higher inflation serves as the reason for a pullback, perhaps even a cyclical bear market. Check out this chart on inflation (Core CPI):
I don't believe inflation nor interest rates will be rising for long. That's my opinion. But, for now, both are and that has the market very nervous, with growth stocks under serious attack. Because the stock market has been so complacent for so long, it's almost impossible to avoid the increasing pessimism that we're going to see. As fear escalates, markets move lower. That's simply how it works. The media will make sure we
live the pain of every move higher in inflation and every tick higher in treasury yields, which I believe will run its course over the next 3-6 months. That will produce the type of selling that will make growth stocks extremely valuable when inflation peaks and interest rates begin to drop again. Timing that bottom won't be easy, but I do believe that patience will pay off for those who can avoid big mistakes during Q1.
This afternoon, we'll have our next Model ETF Portfolio "Draft", where we'll select ETFs to attempt to avoid as much of the Q1 carnage as we can. I hope you will join me!
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Tom Bowley
Chief Market Strategist
EarningsBeats.com
Better Timing. Better Trades.
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