{"id":9814,"date":"2021-09-02T15:11:57","date_gmt":"2021-09-02T15:11:57","guid":{"rendered":"https:\/\/zackspcg.com\/blog\/?p=9814"},"modified":"2022-02-26T13:05:37","modified_gmt":"2022-02-26T13:05:37","slug":"bad-news-everywhere-what-does-that-mean-for-stocks","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/bad-news-everywhere-what-does-that-mean-for-stocks\/","title":{"rendered":"Bad News Everywhere &#8230; What Does That Mean for Stocks?"},"content":{"rendered":"\n<p><em>Roxanne S. from Wrightsville\nBeach, NC asks: <\/em>Hello Mitch, I\u2019ve been a bit disheartened lately with the\nslew of bad news. Inflation, the Delta outbreak, and now the situation in\nAfghanistan. It feels like some of the cards are stacked against the economy\nand the stock market. What do you think? Time to step aside for a few months?<\/p>\n\n\n\n<p><strong>Mitch\u2019s Response:<\/strong><\/p>\n\n\n\n<p>Thanks for your note, Roxanne, and I empathize with your\nconcern over the string of bad news this summer. Many Americans had been hoping\nthe pandemic risk would be completely faded by now, and that the economy (and\nnormal life) would be charging ahead. Not only is the outbreak currently worsening,\nbut there are also the layered concerns of inflation pressures and a messy\nsituation in Afghanistan.<\/p>\n\n\n\n<p>The confluence of bad news has many people concerned. An\nAugust survey from the University of Michigan found that the U.S. Consumer\nSentiment Index (CSI) fell to 70.2, which was far below the 80+ expectation and\nmarked a -13.5% decline from July. The only other times the CSI has fallen so\nsteeply was October 2008 \u2013 at the cusp of the Global Financial Crisis \u2013 and April\n2020. And we all know what happened then.<\/p>\n\n\n\n<p><sup>______________________________________________________________________________________________<\/sup><\/p>\n\n\n\n<p><strong><a href=\"https:\/\/go.steadyinvestor.com\/avoid-emotional-investing?source=zim&amp;medium=blog&amp;term=mitchsmailbox_avoid_emotional_investing_zim_09_02_2021&amp;content=avoid_emotional_investing\">See How You Can Navigate Through Turbulent Times<\/a><\/strong><br> \u00a0<br>Investing is an emotional process. But to better reach your financial end goal, staying invested is key. Since 1926, investors who remained in the market over the long term came out ahead 99% of the time. <\/p>\n\n\n\n<p>In our guide, <em>How to Avoid Emotional Investing<\/em>,\nwe cover:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>How to do a \u201creality check\u201d on individual\nstocks during a market correction<\/li><li>How to potentially protect your\nportfolio from extreme market swings<\/li><li>Plus, more useful techniques to take\nemotions out of your investing<\/li><\/ul>\n\n\n\n<p>If you have $500,000 or more to invest, get our free guide,\u00a0<em>How to Avoid Emotional Investing<\/em>. It provides our advice, based on decades of experience, to help you navigate through turbulent times.<br> \u00a0<br><a href=\"https:\/\/go.steadyinvestor.com\/avoid-emotional-investing?source=zim&amp;medium=blog&amp;term=mitchsmailbox_avoid_emotional_investing_zim_09_02_2021&amp;content=avoid_emotional_investing\"> <\/a><strong><a href=\"https:\/\/go.steadyinvestor.com\/avoid-emotional-investing?source=zim&amp;medium=blog&amp;term=mitchsmailbox_avoid_emotional_investing_zim_09_02_2021&amp;content=avoid_emotional_investing\">Download Our Guide,\u00a0<\/a><\/strong><em><strong><a href=\"https:\/\/go.steadyinvestor.com\/avoid-emotional-investing?source=zim&amp;medium=blog&amp;term=mitchsmailbox_avoid_emotional_investing_zim_09_02_2021&amp;content=avoid_emotional_investing\">How to Avoid Emotional Investing<\/a><\/strong><\/em><strong><a href=\"https:\/\/go.steadyinvestor.com\/avoid-emotional-investing?source=zim&amp;medium=blog&amp;term=mitchsmailbox_avoid_emotional_investing_zim_09_02_2021&amp;content=avoid_emotional_investing\">.<\/a><sup><a href=\"https:\/\/go.steadyinvestor.com\/avoid-emotional-investing?source=zim&amp;medium=blog&amp;term=mitchsmailbox_avoid_emotional_investing_zim_09_02_2021&amp;content=avoid_emotional_investing\">2<\/a><\/sup><\/strong><\/p>\n\n\n\n<p><sup>______________________________________________________________________________________________<\/sup><\/p>\n\n\n\n<p>The University of Michigan survey cited \u201cdashed hopes\u201d from\nAmericans who were expecting the pandemic to be over by now. Folks are clearly\nfeeling a bit disheartened and erring on the side of caution, as it sounds like\nyou are. <\/p>\n\n\n\n<p><strong>Consumer Sentiment\nDipped<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/02\/2_pic2-1-1024x395.png\" alt=\"\" class=\"wp-image-9818\"\/><figcaption> <strong><em>Source: Federal Reserve Bank of St. Louis<sup>2<\/sup><\/em><\/strong> <\/figcaption><\/figure>\n\n\n\n<p>I understand the concern, but at the end of the day, it\u2019s\nimportant to remember the stock market is <em>forward-looking<\/em>,\nwhile consumer sentiment is a coincident indicator. In other words, if you\u2019re\nworried about how things look today, remember that the stock market is focused\non how things will be six or even 12 months from now. <\/p>\n\n\n\n<p>And looking ahead just one quarter, we can see that most\nU.S. corporations \u2013 whose sales and profits matter most to stock market returns\n\u2013 are still feeling good about the coming months and quarters. Total S&amp;P\n500 earnings in Q3 are expected to be up +26.2% on +13.3% higher revenues, and\nthe chart below shows how Q3 estimates have been pushing higher since the start\nof the year. That\u2019s a sign of more confidence, not less.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/02\/pic1-2-1024x745.png\" alt=\"\" class=\"wp-image-9819\"\/><figcaption>  Image Source: Zacks Investment Research <\/figcaption><\/figure>\n\n\n\n<p>To be fair, the magnitude of upward revisions is on the\nlower side relative to what we had seen in the preceding quarter\u2019s comparable\nperiod, but it is still quite strong. <\/p>\n\n\n\n<p>The last point I\u2019ll make is regarding the classic \u201cwall of\nworry.\u201d As bad news builds and folks become more cautious and skeptical about\nthe economic outlook, it usually means that expectations for growth are revised\ndownward \u2013 which ultimately makes the hurdle lower for the economy to clear. If\nexpectations fall and the outcome is not as bad as everyone expects, those are\nthe precise times you want to be in stocks, in my view.<sup>3<\/sup><\/p>\n\n\n\n<p>In times like these, when news headlines are causing investors to worry, the key is to not let your emotions get the best of you. The more you stay invested, the better your financial outcome will be!<br> \u00a0<br>If you have $500,000 or more to invest, get our free guide,\u00a0<em>How to Avoid Emotional Investing<\/em>.<sup>4\u00a0<\/sup>It provides our advice, based on decades of experience, to help you navigate through turbulent times. Click in the link below to get your copy!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Delta resurgence, inflation, and the Afghanistan situation all add up to grim news. Mitch assesses the market reaction. <\/p>\n","protected":false},"author":3,"featured_media":7436,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[66,71],"tags":[],"class_list":["post-9814","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mitchs-mailbox","category-private-client-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9814","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=9814"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9814\/revisions"}],"predecessor-version":[{"id":10322,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9814\/revisions\/10322"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=9814"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=9814"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=9814"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}