During the administration of George W. Bush (remember him?), a White House aide derisively referred to mainstream journalists as part of the “reality-based community.” He went on to say: “When we act, we create our own reality.”

Those words sounded appalling at the time, but little did we know how pervasive this “post-truth” paradigm would become. In today’s era of fake news, partisans not only have their own opinions but they also have their own facts.

So what does this have to do with investing?

Political scientists have found that how people think about the economy is increasingly rooted in how they identify politically rather than in actual conditions. When Donald Trump was president, Democrats were more pessimistic than Republicans about economic conditions; under Joe Biden the converse is true. Partisan media amplify these preconceptions.

It’s our job at Investing Daily to look at conditions as they really are, no matter which party controls the White House. As I’ve often warned you, people who invest according to their ideological preferences constitute the “dumb money.”

When examined dispassionately, the latest employment, economic and earnings data paint an optimistic scenario, albeit with the usual nuances and caveats. Let’s look at the hard numbers, starting with the jobs market.

Payroll processor ADP reported Wednesday that U.S. employers added back fewer jobs than expected in July, as the emergence of COVID Delta dented business confidence.

Private payrolls increased by 330,000 in July, compared with consensus expectations of 690,000. In June, employers added back 680,000 private payrolls (see chart).

July’s number undershot expectations but keep in mind, private sector employment has increased for seven straight months, amid an accelerating vaccination rate. Many of these employment gains have occurred in the hard-hit services sector, as restaurants, bars, hotels, theme parks, and sports venues reopen.

The ADP report aptly summed it up: “The labor market recovery continues to exhibit uneven progress, but progress nonetheless.”

Headlines about COVID Delta took a turn for the worse Wednesday, rattling investors. The Dow Jones Industrial Average fell 323.73 points (-0.92%), the S&P 500 slipped 20.49 points (-0.46%), and the tech-heavy NASDAQ rose 19.24 points (+0.13%). The small-cap Russell 2000 fell 27.26 points (-1.23%). Cyclical stocks were among the biggest losers. In the bond markets, the yield on the benchmark 10-year Treasury note rose to 1.185% from 1.174%.

In pre-market futures contracts Thursday, all three major U.S. stock indices were trading in the green. Corporate earnings growth and the economic recovery remain on track, providing tailwinds for further stock market appreciation this year.

Analysts at Goldman Sachs (NYSE: GS) on Thursday boosted their S&P 500 targets for 2021 and 2022, pointing to corporate earnings growth that has consistently surpassed expectations. Goldman hiked its year-end S&P 500 target to 4,700 from 4,300, suggesting a 7% gain to the end of this year, and lifted its 2022 target to 4,900 from 4,600. The investment bank also cited low interest rates for its bullish stance.

The economic recovery buttresses the bull case. The Institute for Supply Management reported Wednesday that service sector activity rose a record 64.1% in July from 60.1% in the previous month, beating the consensus forecast of 60.5%. Hospitality and leisure activities led the gain.

The second quarter 2021 earnings performance of the financials sector is especially auspicious. The sector is s bellwether of future financial growth and its major players all reported substantial earnings per share (EPS) beats for Q2.

Bank of America (NYSE: BAC) reported actual Q2 EPS of $1.03 vs. the consensus expectation of $0.77; JPMorgan Chase (NYSE: JPM), $3.78 vs $3.20; Goldman Sachs (NYSE: GS), $15.02 vs. $10.26; Wells Fargo (NYSE: WFC), $1.38 vs. $0.98; Citigroup (NYSE: C), $2.85 vs. $1.97; Capital One Financial (NYSE: COF), $7.71 vs. $4.62; and American Express (NYSE: AXP), $2.80 vs. $1.63.

These blockbuster earnings results from the major banks highlight a bright spot for lenders: they’re writing more loans as the pandemic-battered economy continues to recover.

The next “rocket” stock…

The investment herd often misses compelling growth stories. Frequently they jump off the rocket just as a stock is launching into growth mode because they underestimate a company’s ability to innovate or expand product lines.

Investors often get scared by one disappointing quarter. Even the best growth company will stumble due to demand shifts, product introduction delays, or higher expenses. But a stumble is often just an opportunity to buy at a bargain price before growth resumes the next quarter.

We try to figure out the company’s story. What’s driving the numbers? Is this a fundamental shift that has long-lasting power? Was it a one-time event unlikely to be repeated?

By sifting through financial statements, reading company presentations and news releases, and scouring industry web sites, we get a deeper understanding of the growth story.

And we’ve just pinpointed a growth stock that’s about to blast off.

This firm is the world’s only producer of a rare, miracle material that’s essential for biological medicine, the Internet of Things, aeronautics, autonomous vehicles, microchips, 5G telecommunications…you name it.

The time to invest in this company is now, before it starts getting widespread coverage by the financial media and the fuse gets lit. Click here for details.

John Persinos is the editorial director of Investing Daily. Send your questions or comments to mailbag@investingdaily.com. To subscribe to his video channel, follow this link.