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Earnings might be saving this market. That’s the good news. The bad news is that the market needs saving, and for good reasons.

So far, with just about 10% of S&P 500 companies reporting, earnings have been better than expected, as usual. It’s a tough quarter considering inflation, the war, and covid in China. But companies have been resilient so far. And market performance has been upgraded from falling to floundering.

Remain cautious. The market’s latest selloff has continued this week, with even this morning’s good-looking gap higher disintegrating by day’s end.

It’s earnings season.

This should be an interesting one. Earnings have saved and rejuvenated the bull market throughout the pandemic recovery. Can this earnings season save the current floundering market?



Stocks are up today because of optimism from the few companies that have reported so far. The expectations are for just 4.5% earnings growth on average for S&P 500 companies. Of course, earnings almost always exceed expectations. But this will still be the slowest growth since the fourth quarter of 2020 as there are much tougher comparisons to the opened-up economy a year ago.

The world is still a mess with crosscurrents galore. But we will soon have something somewhat concrete to focus our attention on. Yes, I’m talking about first-quarter earnings season.

This week we review earnings from one of our recommended companies and provide updates on three other recommended companies. We share some thoughts on why what produced the remarkable bull market over the past decade and longer may not lead to investing success over the next 5-8 years.

The Update includes comments on earnings from recommended companies, other updates and the Catalyst Report, a powerful tool that anyone can use for finding attractive turnaround stocks. In the April monthly edition we highlight three companies with new CEOs, and summarize our deep-dive into the cannabis industry including six companies whose shares look appealing for long-term investors. We also discuss a spin-off which is our feature recommendation.

The big market rebound has petered. And ugliness might be resuming.

The waning of war panic and relief about the Fed’s March 0.25% rate hike have given way to new concerns. There may be a new round of economic fallout from the war as Europe proposes additional sanctions on Russia. There are also growing concerns about economic growth going forward because of inflation and a more aggressive Fed.

After last week’s boomlet, the market has put together another constructive week in our book, mostly because of what it didn’t do—all major indexes either rose nicely (the Nasdaq is posting just its second week of back-to-back gains since around Halloween) or have effectively held the vast majority of last week’s gains.

The market is looking a lot better than it did a couple of weeks ago even though the Russia-Ukraine conflict continues and the Fed has become more vocal about the need to hike interest rates in order to battle inflation.

The market had another solid day today, which was enough to flip our Cabot Tides back to a bullish signal.

Almost everywhere in the mainstream media and across most Wall Street research firms, there is a common implication that a recession will bring a bear market for stocks.

This week started off very strongly, especially on Tuesday, when some reports of peace talks overseas caused a big gap up in the indexes and a strong rise across the market.

There’s been a lot of talk lately about a potential yield curve inversion (happened briefly on Tuesday), so I did some work earlier in the week to see what the data says about small- and large-cap stock performance around inversions.

This week we review earnings from one of our companies and provide updates on others. Our podcast covers these topics and some thoughts on why waving off rising interest rates because they are “fully discounted” may not be a good idea.

The market (and especially growth stocks) took a good-sized hit today—our Cabot Tides remain positive, but as we wrote in last week’s update, we’re still seeing lots of selling on strength, leading to many air pockets among individual stocks.