Earnings Are Being Rewarded

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In his podcast addressing the markets today, Louis Navellier offered the following commentary.

If you wish to listen to this commentary, please click here. 

The market finished on a very strong note yesterday, but the market is expected to open on a weak note today. That’s what happens when markets have to consolidate a recent violent action. We’ve had a very violent market sell-off, we’ve bounced, and now we have to consolidate.

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This volatility is expected to persist for at least another three to four weeks. It's very possible that the markets will firm up in late June on quarter-end window dressing.

The ten-year treasury bond yield has definitely consolidated. It was over 3% for some time, but now it's about 2.73% which is a very good sign.

It's widely viewed that inflation has peaked in America. This is because energy and commodity companies are largely paid in U.S. dollars, since all commodities, like crude oil, are priced in U.S. dollars. On the other hand, inflation is still running amuck in countries with weak currencies. Our Federal Reserve continues to raise rates and strengthens the dollar versus Japan and Europe. 

Earnings Rewarded

Snap Inc (NYSE:SNAP) is getting punished for providing horrible guidance. Zoom Video Communications Inc (NASDAQ:ZM), on the other hand, not only beat but provided good guidance, so their stock is up. The main message here is earnings are being rewarded. 

Real Silver Lining

The real silver lining in the market remains fertilizer, food, and shipping.

Nvidia (NASDAQ:NVDA) is supposed to announce earnings on Wednesday and we will see what that does for the entire semiconductor industry. Their forecast sales earnings are over 40%. I am expecting good things for Nvidia, but the guidance will be key.

In the meantime, the stock market is in the midst of normal oscillations. This is a great opportunity to buy good stocks on dips. 

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