In the week since we published the first part of this sector review, the markets haven’t calmed down much. As Global Income Edge’s chief investment strategist, Richard Stavros, pointed out then, we’ve seen the worst correction since 2011 over the past two weeks and the Dow is now down 8.5%. As much as I would like to, I certainly wouldn’t call a bottom yet.

Most of this turbulence is thanks to China, which having grown over the past two decades to become the second-largest economy in the world is crucial to global economic growth. Over the past decade alone, China was responsible for nearly a third of global growth. So Tuesday’s news that the country’s manufacturing sector contracted at the fastest pace in three years in August understandably jangled some nerves.

Thanks to the globalization of today’s economy, it has also been raising some questions about our own American growth prospects.

Just as I wouldn’t call a bottom to this correction just yet, I also wouldn’t say that this latest Chinese slowdown is enough to cause a U.S. recession. It’s not as if these Chinese problems just suddenly popped up, yet the U.S. economy still managed to grow by 3.7% in the second quarter. On top of that, exports account for only about 15% of American GDP and exports to the Asia-Pacific region are just 2%. Plus unemployment here is down, both business and residential investment is up, and consumer spending is strengthening.

So China problems don’t spell the end of the American economy. For now, your best bet is to buy American. Unfortunately though, even after this recent correction, our models aren’t showing any compelling buys in the American markets aside from what we have in our portfolios. Still, some interesting companies are popping up that we might add to our holdings if they become screaming values.

Financial Services and Banks

Financial services stocks are the most overvalued, with my review of the sector failing to turn up any bargains that I would feel comfortable recommending. The biggest issue with financial services companies is that they’ve been bid up on the expectation that the Fed would raise rates in September, a move that’s now in question.

For instance, insurance companies typically see their profitS rise along with interest rates, thanks to the higher returns they earn on invested premiums. Banks also get a boost from higher rates on loans.

The Fed has been fairly vocal about its desire to begin normalizing rates this year, and most traders have been betting on a September rise. But with all of the global turbulence, it looks like we might have to wait a bit longer for the first rate hike since June 2006.

That hasn’t really brought the sector’s valuations down to more reasonable levels yet, so at least for now the best bargains in the sector appear to be the ones we already recommend in our Aggressive Portfolio.

Healthcare

While the healthcare sector has also held fairly steady in the recent correction, our review turned up that Conservative holding GlaxoSmithKline is relatively undervalued.

The drug maker hasn’t been getting much respect lately, mostly on worries that its biggest seller Advair, responsible for nearly 20% of the company’s total revenue, could start facing pressure from generic drug competitiors. But that patent actually expired in 2010 and a true generic competitor has yet to emerge, largely thanks to the complexity of making and delivering such drugs.

The vaccines Glaxo (NYSE: GSK) picked up from Novartis (NYSE: NVS) also leave the company well positioned in the vaccine market, with several promising new ones in the pipeline.  The company’s new HIV drugs are also selling better than expected and gaining traction, so they should provide a growing earnings boost going forward.

Take advantage of its low valuation to pick up GlaxoSmithKline under $54, for a yield of better than 6%.

Our review also showed that AstraZeneca (yield: 4.5%), which isn’t one of our holdings, also offers a pretty compelling value proposition.

The company has undergone a management shakeup, with a new CEO taking the reins in October and the ouster of its heads of commercial operations and research and development earlier this year. The new management has quickly refocused the company’s efforts on developing treatments for unmet medical needs, a strategy which actually boosts the odds of getting new drugs approved and would leave AstraZeneca (NYSE: AZN) with strong pricing power. It is showing the strongest progress in its oncology franchise, with a particularly promising treatment for lung cancer winding its way towards approval.

The company does face a potential challenge as patents on its two top selling drugs are set to expire over the next few years, but that’s becoming less of a potential headwind thanks to its strong pipeline of drugs under development. So while we wouldn’t pull the trigger on AstraZeneca just yet, instead waiting for the current market turbulence to settle down (and maybe get it at an even better price), its looking more attractive.

Telecoms

Of the sectors that I covered for this report, telecoms were the most attractively valued. That’s because, at least before this recent market swoon, investors were beginning to focus more on growth as the economy looked more solid. The potential for a rate hike was also causing investors to refocus, with an eye towards potentially locking in solid income streams on bonds. On top of that, there’s been a well-recognized price war going on between the major wireless carriers, which are competing to grow their customer bases.

Portfolio holding AT&T looks particularly undervalued, which is somewhat surprising since its recent acquisition of DirecTV will make an impressive contribution to the company’s cash flow. And being only a third as volatile as the broader market, with a 5.8% dividend to boot, AT&T (NYSE: T) should be just what the doctor ordered.

Continue buying AT&T up to $38.

While we’re not adding it to the portfolio, Verizon has also become somewhat undervalued for all the same reasons.  But serving a quarter of the U.S. population with local phone service and having more than 100 million retail customers, it is easily the premier carrier in the U.S. wireless industry. You wouldn’t be wrong to say Verizon is probably one of the best American businesses.

While telecoms might be stodgy, that’s exactly what income investors should want.

Consumer Staples

My search of the consumer staples sector didn’t turn up any screaming bargains, largely because the sector has seen a lot of interest from yield hungry investors for several years now.

That said, Aggressive Portfolio holding Philip Morris International has become a solid bargain that has turned in long-term dividend and earnings growth. Currently yielding 5.1%, the company has sold off largely thanks to the strong dollar, even though it does relatively little business in U.S. currency. Still, it has been a major player in developing e-cigarette technology, which is a growing alternative to traditional cigarettes. The technology also won surprising praise from a British public health agency, which issued a report suggesting e-cigarettes are a safer alternative to regular cigarettes.

Continue buying Philip Morris International under $90.

We did turn up one interesting company in the sector which does appear to be slightly undervalued; Orchids Paper Products Company.

The company is tiny with a market capitalization of $260 million, so we aren’t likely to add it to our portfolio any time soon, but it sports a big 5.5% yield. It is in the tissue paper business, producing bulk rolls of the stuff which are then cut down into napkins, bathroom tissue and paper towels. Its products are primarily sold in discount stores and on to janitorial and food service companies.

The company’s revenue has grown an average of more than 13% over the past decade, while earnings per share growth has average 10.2% over the same period. It also has a low beta of just 0.14, so it’s not really subject to huge price swings.

Again, we’re not buyers at the moment, Orchids Paper Products Company (NYSE: TIS) could be interesting down the road.