As I write this article Thursday morning, the hair-sprayed heads on CNBC are on fire. Inflation! Recession! War! A hawkish Fed! Red chyrons announcing “alerts” and “bulletins” are flashing like the lights on a pinball machine.

CNBC needs a warning label: “This channel is entertainment and should not be construed as financial advice.”

Why do I have CNBC playing (mercifully on mute) in the background of my home office all trading day? Not so much to glean useful data, but to spot contrarian indicators. And the wave of pessimism right now tells me that the worst might be behind us.

Case in point: crude oil prices have been plunging, but this data input isn’t fully accounted for in the latest inflation readings. (More on that in a minute.)

It’s easy to get hung up on the current headlines. There’s a lot of fear in the markets and emotions are running rampant. Most retail investors tend to buy high, when the markets are up and everything looks rosy.

But through it all, you should stick to your investment plan. Investing Daily recently surveyed its readers, and based on the results, I know that reliable income is important to many of you.

Below, I pinpoint a way to generate a reliable stream of robust income, despite the risks I’ve just described. First, let’s take a look at the latest drama on Wall Street.

The major U.S. equity indices fell Wednesday as follows: the Dow Jones Industrial Average -0.67%; the S&P 500 -0.45%; the NASDAQ -0.15%; and the Russell 2000 -0.12%. Traders are bracing for a big rate hike from the Federal Reserve this month to quell inflation.

A silver lining is that inflation data for July is likely to be milder. Gasoline prices, as well as the prices for several crucial commodities, have been dropping in recent weeks. Indeed, in response to the June CPI report, President Biden on Wednesday pointed out that the data is “out-of-date.”

On the international front, Asian and European stocks have been slumping, as inflation soars around the world and the Russia-Ukraine war grinds on. The global economy faces headwinds. China is grappling with a resurgence of COVID, and Western sanctions on Russian oil and gas are bedeviling European economies.

The U.S. Bureau of Labor Statistics (BLS) reported Wednesday that the consumer price index (CPI) in June rose 9.1% over the last 12 months, above expectations for 8.8%.

On Thursday, the BLS released the producer price index (PPI) for June. The PPI, a gauge of the prices paid to producers of goods and services, increased 1.1% last month. Prices for final demand goods rose 2.4%, and the index for final demand services advanced 0.4%. Final demand prices moved up 11.3% for the 12 months ended in June.

In June, three-fourths of the advance in the PPI index for final demand was due to a 2.4% rise in prices for final demand goods. The index for final demand services increased 0.4% (see chart).

After the opening bell Thursday, U.S. stocks were trading in the red as investors expected the Fed to eventually lower the hammer.

The bond yield curve has inverted, sending a recessionary signal as investors fear an economic growth slowdown due to a hyper-aggressive Federal Reserve.

The sizzling CPI and PPI inflation reports make it highly likely that the Fed will boost the fed funds rate by 75 basis points (0.75%), or by even more, during its next meeting, scheduled for July 26-27.

Q2 earnings into view…

As second-quarter corporate earnings season kicks into gear, a major worry for stock investors is that the Fed is pushing the already beleaguered economy into a recession on its mission to fight inflation.

Read This Story: Recessions: Don’t Wait for The Starting Gun

As of this writing, the S&P 500 is expected to report year-over-year earnings growth of 4.3% for the second quarter, according to research firm FactSet. The analyst consensus is that growth-oriented sectors such as technology will post lackluster earnings, at best.

Growth stocks are particularly sensitive to rising rates because they’re more dependent on debt to drive expansion, whereas value stocks tend to enjoy more ample free cash flows that they can leverage for growth.

The big banks are first up to bat for Q2 reports, and so far the sector bellwethers are missing expectations, even though rising rates tend to help financial services.

Before the opening bell Thursday, JPMorgan Chase (NYSE: JPM) reported Q2 operating results and they were grim. Earnings per share came in at $2.76 (versus $2.88 expected).

The biggest U.S. bank, JPM reported Q2 revenue of $31.63 billion (vs $31.98 billion expected). The bank temporarily suspended share buybacks. It’s another sign that the economic slowdown will compress earnings for the S&P 500.

Rattled by the spate of gloomy news from Wall Street? Don’t lose perspective. If you’re looking for a way to generate steady income with reduced risk, consider our premium trading service, Rapier’s Income Accelerator, helmed by our income expert Robert Rapier.

Robert Rapier can show you how to squeeze up to 18x 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.

Subscribe to John’s video channel: