While drinking coffee this morning and glancing at the financial news on mute, I’m reminded of Newt Minow’s famous description of television: “A vast wasteland.”

Minow made that bombshell declaration in 1961, while serving as chair of the Federal Communications Commission. A public servant widely respected throughout his career, Minow died last month at the age of 97.

Over the last six decades, TV’s wasteland has only gotten…vaster. As I write this, I’m watching the Wall Street pundits on CNBC gesticulate like they’re on dexies.

Instead of getting whipsawed by “breaking news” alerts, you should methodically create a hope-to-buy-soon list of stocks.

Keep your eye on the technical, fundamental, and macroeconomic indicators, not the alarmist chyrons. And those indicators right now are bullish.

The S&P 500 hovers above its 50- and 200-day moving averages; the New York Stock Exchange Advance/Decline line is rising, which indicates improving market breadth; and the CBOE Volatility Index (VIX), also known as the “fear index,” has fallen well below the demarcation of 20, which indicates decreasing risk.

Corporate earnings have generally surprised on the upside this quarter, coming in better than feared. The latter half of 2023 is expected to see a return to earnings growth. Despite elevated inflation, net profit margins have been improving (albeit because many companies have been padding prices to take advantage of inflation). Corporate and consumer balance sheets are strong.

The U.S. jobs market remains healthy, but it’s cooling enough to curb inflation. The Federal Reserve is nearing the end of monetary tightening and it’s expected to “pause” at its policy meeting next week.

Catching our breadth…

The main U.S. stock market indices closed mixed Wednesday, as follows:

• DJIA: +0.27%
• S&P 500: -0.38%
• NASDAQ: -1.29%
• Russell 2000: +1.78%

The tech-heavy NASDAQ was hit by profit taking after its long winning streak. However, the bull case for the second half of 2023 is getting stronger, as market breadth continues to improve. In a sign of economic optimism, small caps rallied. The VIX slipped 0.14% to 13.94.

Stocks have been on an upward trajectory so far this year, with the S&P 500 on the verge of a bear market exit.

WATCH THIS VIDEO: The Lonely Bull: Why This Unloved Rally Keeps Going

Over the past 40 years, the Fed has paused seven times after concluding a tightening cycle. Following the final rate hike, the central bank held rates steady for roughly six months on average before starting to cut rates to stimulate the economy. Stocks performed strongly in five of these instances, while they fell only modestly in the other two (see chart).

With most Q1 corporate earnings announced, Wall Street is looking forward to next week’s May consumer price index (CPI) report and Federal Open Market Committee (FOMC) meeting. I expect the news to be good on both fronts.

Current market expectations are for the CPI rate of inflation to show a further decline, and for the Fed’s policy rates to remain unchanged at 5%-5.25%.

The doom-and-gloom predicted for this year has yet to happen. The S&P 500’s robust start to the year continues to be fueled by three sectors: technology, communication services, and consumer discretionary. All three sectors have posted year-to-date gains of more than 20%.

Driving the tech sector’s outperformance has been the momentum behind artificial intelligence, a mega-trend that will accelerate over the long term.

The stock market is sustained by liquidity. The second half of 2023 is likely to enjoy several tailwinds, as the Fed’s stance softens.

With the debt ceiling fight in the rear view mirror, we might (just might) see a semblance of calm return to Washington. Here’s a happy thought: Congress traditionally goes into recess for the entire month of August. Your money is safer when lawmakers are out of town.

Start nibbling at your wish list of buys. I also suggest you consider the advice of my colleague Robert Rapier. As chief investment strategist of Rapier’s Income Accelerator, Robert has developed strategies that make money in bull or bear markets.

Robert Rapier can show you how to squeeze up to 18 times more income out of dividend stocks, with just a few minutes of “work” each week. Click here for details.

John Persinos is the editorial director of Investing Daily.

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