You can always count on cable news for hyperbolic drivel. Reporters and pundits are wringing their hands about the Chinese surveillance balloon, as if the now-resolved situation is a national security disaster that heralds a new Cold War.

Same scenario with the recent dip in stocks. Analysts on financial news channels are hyperventilating that so far this year we’ve witnessed a bear market rally, rather than a sustainable upward trajectory. I saw one CNBC chyron Monday that screeched: ANOTHER TECH WRECK ON THE WAY?

If you want to lose a lot of money, take your investment cues from television.

Here’s my take: We’ll experience a bumpy ride in the overall stock market in the coming weeks, as the mix of good and bad economic news continues to pour in. However, despite the January run-up, quality stocks (tech stocks in particular) remain oversold.

As long as the S&P 500 and NYSE Advance Decline line (NYAD) continue to stay above their 200-day moving averages, we can point to the formation of a base for the next bull market.

Seeking the next bullish catalyst…

To be sure, stocks moderately dipped Monday as markets consolidated following last week’s sharp gains.

On Tuesday, Federal Reserve Chair Jerome Powell made remarks at the Economic Club in Washington, DC that were dovish, then hawkish, then dovish again…all of which predictably generated intraday volatility.

The main U.S. stock market indices ultimately closed higher on Tuesday, as follows:

• DJIA: +0.78%
• S&P 500: +1.29%
• NASDAQ: +1.90%
• Russell 2000: +0.76%

Wall Street is betting that one or two more 0.25% hikes are in the offing, followed by a protracted pause as the Fed digests data on how higher rates are affecting inflation and the economy. History shows that once rate hikes stop, the stock market jumps. The consensus of analysts is that the S&P 500 will appreciate in price in 2023 by at least 11%.

Meanwhile, corporate earnings are a mixed bag. About 50% of S&P 500 companies have now reported fourth-quarter 2022 earnings, with revenue growth resilient but profit margins squeezed by still-elevated inflation.

For the quarter, the blended earnings decline for the S&P 500 is -5.3%, according to the latest data from research firm FactSet. If -5.3% is the actual decline for the quarter, it will mark the first time the index has reported a year-over-year decline in earnings since Q3 2020 (-5.7%).

In the technology sector, the negative earnings surprise reported last week by Apple (NSDQ: AAPL), $1.88 actual vs. $1.94 estimated, was a major factor in weakening bullish sentiment heading into this week.

WATCH THIS VIDEO: Big Tech Hits a Speed Bump

The narrative on Wall Street is shifting to the state of the economy in 2023, and therein lies encouraging news that should eventually boost earnings.

The U.S. economy has been cooling, just as the Fed wants, but it’s nonetheless forecast to grow in 2023 by 1.4%, thereby avoiding a recession.

The global economy is expected to grow this year by 2.9%. The United Kingdom is expected to be the only G7 country to fall into recession in 2023, according to the latest estimates of the International Monetary Fund (see chart).

The UK is sowing a bitter harvest from its ill-advised move to leave the European Union. Polls show that most Brits now regret Brexit.

The UK economy is estimated to be 5.5% poorer now than it would have been had it stayed in the EU, according to a study released February 3 by the Centre for European Reform.

The British tabloids had pushed hard for Brexit, which is yet another case study in why investors should always remain skeptical of the media’s manufactured consensus.

One man who always thinks for himself is my colleague Dr. Joe Duarte.

In a new report, Dr. Duarte pinpoints a groundbreaking tech disruption worth $75 trillion…and it all starts with one under-the-radar $3 stock.

Dr. Duarte is the chief investment strategist of our premium trading services, Profit Catalyst Alert and Weekly Cash Machine. He currently recommends an investment opportunity in the tech sector that’s poised for market-crushing gains. Learn more by clicking here.

John Persinos is the editorial director of Investing Daily.

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