Calvin Coolidge isn’t one of my favorite historical figures. As America’s 30th president during the Roaring 1920s, the taciturn Republican was cautious to a fault. But he did express a piece of advice that I’ve always admired:

“If you see ten troubles coming down the road, you can be sure that nine will run into the ditch before they reach you.”

Considering current stock market anxiety, those are sagacious words to live by.

Following two years of a remarkable bull run, the stock market’s swoon during the first half of 2022 rattled many investors. But as the market regains momentum, it seems that the apocalypse predicted by the perpetual pessimists has been called off.

On Wednesday, the major U.S. stock market indices rose as follows: the Dow Jones Industrial Average +0.15%; the S&P 500 +0.59%; the NASDAQ +1.58%; and the Russell 2000 +1.59%.

After the opening bell Thursday, the main U.S. stock indices were in the red in early morning trading, on concerns about global economic growth. But the last month has seen stocks on an upward trajectory.

The market’s momentum in recent weeks has been fueled by a technology sector rally. Second-quarter operating results for tech stalwarts have been solid so far. Notably, electric vehicle maker Tesla (NSDQ: TSLA) reported Q2 earnings results after the closing bell Wednesday that exceeded expectations ($2.27 earnings per share versus $1.81 estimated). Tesla’s earnings beat was achieved despite supply chain challenges.

The combination of rising inflation, pain at the gasoline pump, and empty shelves due to supply chain disruptions has clobbered consumer sentiment. And yet, on the jobs front, the news continues to be good.

The U.S. Bureau of Labor Statistics reported Thursday that the number of Americans applying for jobless claims last week reached its highest level in nearly 8 months, but the total number of those collecting unemployment benefits declined.

Applications for jobless aid for the week ending July 9 climbed by a modest 9,000 to 244,000, up from the previous week’s 235,000. The consensus expectation was for the number to remain flat from the previous week.

The four-week average for claims, which smooths out week-to-week volatility, rose by 3,250 from the previous week, to 235,750.

The total number of Americans collecting jobless benefits for the week ending July 2 fell by 41,000 from the previous week, to 1,331,000. That figure has hovered near 50-year lows for months.

The upshot: Initial jobless claims remain quite low from an historical perspective, signaling that labor market conditions remain tight.

The labor market is a bright spot in the U.S. economic recovery. What’s more, consumer finances are in good shape. The ratio of household debt payments to disposable income stands at historically low levels, and incomes are supported by robust job creation and rising wages.

Watch This Video: Has The Stock Market Stabilized?

The resilient jobs market does have a downside, because it adds pressure on the Federal Reserve to continue with aggressive rate hikes. The Fed is set to raise rates again, when it meets next week.

Some of the issues facing the U.S. and global economy are daunting. The Russia-Ukraine war drags on, continuing to disrupt supply chains. Higher borrowing costs due to Fed tightening are impeding growth. U.S. housing numbers have turned sour.

China, the world’s growth engine, has hit a speed bump. China last week reported gross domestic product growth of only 0.4% in the second quarter from a year ago, missing consensus expectations of 1% growth. The main culprit has been the government’s drastic anti-COVID measures.

The deceleration of the world’s second-largest economy is likely to exert adverse ripple effects. Europe is grappling with problems as well.

On Thursday, the European Central Bank (ECB) raised interest rates for the first time in more than 11 years, in an attempt to combat surging inflation in the eurozone (see chart).

The ECB raised its key interest rate by 0.5 percentage points to 0.0% and indicated that it plans additional increases later in the year. The hike was bigger than expected.

The rate had been negative since 2014 to encourage banks to lend rather than deposit money with the ECB. Consumer prices in June in the eurozone rose at the record rate of 8.6% year-over-year, far above the ECB’s 2% target. Other overseas central banks, notably the Bank of England, have been making similar hawkish monetary moves.

However, challenging markets also give you the chance to pick up excellent investments on the cheap. The wise investor looks for opportunities during times of adversity.

We’re not facing financial nirvana, but neither are we facing another economic meltdown, as we saw in early 2020 due to the pandemic. U.S. corporate balance sheets remain strong and supported by significant cash hoards.

Stay calm. Tweak your portfolio by adding inflation protection, but stick to your overall investment plan. And 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.

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John Persinos is the editorial director of Investing Daily.

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