Skip to Main


  • John Stoltzfus
  • February 6, 2023

Should I Stay or Should I Go?

米乐娱乐可靠 A too-large-to-ignore global stock market rally ran into an air pocket last Friday

Key Takeaways

  • With 251 or half of the firms in the S&P 500 index having reported, earnings are off 3.7% from a year ago on revenue growth of 5.1%. Results have been mixed with five sectors showing double-digit earnings growth from a year earlier and six showing declines.
  • Earnings season continues this week with 94 firms scheduled to report. With a light calendar of economic data this week investors will likely lean on corporate results for signs of economic strength or weakness.
  • Last week’s economic data showed resilience in the labor market with a surprisingly strong jobs gain and a softening in wage gains. Meanwhile the ISM purchasing managers index surged back into expansionary territory on the strength of new orders.
  • Economic data that points to resilience of the economy even as the Fed remains committed to curb inflation suggests “Don’t Fight the Fed” may have new meaning this cycle. 
abstract financials

A larger than expected (517,000) January jobs gain number last Friday curbed investor enthusiasm and hit the pause button for stocks ahead of the weekend. While an easing in the hourly wage gains helped offset the surprisingly strong jobs number, worry prevailed on the day that inflation risk may prove sticky enough for the Federal Reserve to hang tough against inflation for longer than some of Wall Street’s denizens would like to see.

With stocks in broad rally mode around the globe pretty much from the start of the year we see Friday’s downdraft as an opportunity for market participants to curb their enthusiasm and to ponder whether stocks (and even bonds) had gotten somewhat ahead of themselves. We see it also as an opportunity to seek out any “babies that got thrown out with the bathwater” in the downdraft.

After all, 2023 has been showing the earmarks of a recovery year for the global economy and equity markets with signs of improvement across the landscape alongside what remains significant levels of uncertainty as to the when, what and how of hurdles to be traversed will be met.

Quotation from Aenean Pretium

Perhaps “Don’t fight the Fed” is finding a new meaning this cycle as at least some market participants appear to be grasping an idea that the Fed’s commitment to place inflation in check might actually be a good thing.

Recovery years in our recall typically don’t come with stock markets that go up in a straight line and bond yields that ease consistently as bond prices rise. Recovery years or “do over” years from our historical perspective on the market radar screen are work-out years presenting opportunity along with commensurate risk as economies and markets navigate uncertainties on the landscape.

In our experience such work-out periods require from investors prudent portfolio diversification, patience, discipline, self-knowledge and the courage of one’s convictions. The latter statement should not be taken as daunting as it may sound considering that there never has been nor is there likely ever to be a period that arrives announced by the sounding of an all-clear signal over the world’s economies or markets.

Don’t Fight the Fed

Perhaps “Don’t fight the Fed” is finding a new meaning this cycle as at least some market participants appear to be grasping an idea that the Fed’s commitment to place inflation in check might actually be a good thing.

Consider that at least for now we have moved away from a period of “free money” (historically low interest rates as a result of emergency efforts during the COVID19 pandemic by monetary and fiscal policy makers) as interest rates have moved higher toward a “next new normal” regime in which bond issuers pay for the privilege of borrowing money, bond buyers find yields that offer at least some protection against inflation and stock market participants giver greater consideration to fundamentals over momentum and highly leveraged bets.

In our view from our perch on the market radar screen the Federal Reserve is doing its job without malice toward investors as it seeks to bring down inflation with a methodology that remains highly sensitive to the effects of its policy on the economy while it provides high levels of transparency and communication to Main Street and Wall Street.

Recent economic data in our view suggests that the Fed’s actions since Q4 of 2021—when it announced its policy pivot towards addressing inflation that was getting out of hand—have had a positive effect thus far in taking the economy off of a “free money” boil while enabling the resilience of the US economy to remain intact.

With the Fed’s February FOMC meeting and the January jobs number now in the rearview mirror, market participants will likely focus on negotiations in Washington to raise the debt ceiling, the weeks that remain in the S&P 500’s Q4 earnings season and the challenges that exist in the realm of geopolitics.

John Stoltzfus headshot

John Stoltzfus


Chief Investment Strategist, Oppenheimer Asset Management Inc.

John is one of the most popular faces around Oppenheimer: our clients have come to rely on his market recaps for timely analysis and a confident viewpoint on the road forward. He frequently lends his expertise to CNBC, Bloomberg, Fox Business, and other notable networks.

Hide Bio


Strategist Certification - The author certifies that this investment strategy report accurately states his/her personal views about the subject securities, which are reflected in the substance of this investment report. The author certifies that no part of his/her compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this investment strategy report.

The strategy provided in this report is provided by Oppenheimer Asset Management Inc., (“OAM”) a registered investment adviser affiliate of Oppenheimer & Co. Inc. (“OPCO”). It reflects analysis of fundamental, macroeconomic and quantitative data to provide investment analysis with respect to U.S. securities markets. The overview in this report is provided for informational purposes and does not constitute an offer to sell, a solicitation to buy, or a recommendation for any security or investment advisory services. The report is not intended to provide personal investment advice. The investments discussed in this report may not be suitable for all investors. Investors should use the analysis provided by this report as one input into formulating an investment opinion and should consult with their Financial Advisor. Additional inputs should include, but are not limited to, the review of other strategy reports generated by OAM, its affiliates, and looking at alternate analyses. Securities and other financial instruments that may be discussed in this report or recommended or sold by OPCO or OAM are not insured by the Federal Deposit Insurance Corporation and are not deposits or obligations of any insured depository institution. Investments involve numerous risks including market risk, counterparty default risk and liquidity risk. Securities and other financial investments at times may be difficult to value or sell. The value of financial instruments may fluctuate, and investors may lose their entire principal investment.

Strategist Certification - The author certifies that this strategy report accurately states his/her personal views about the subject matter reflected in the substance of this report. The author certifies that no part of his/her compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this strategy report.

Potential Conflicts of Interest: Strategic analysts employed by OAM are compensated from revenues generated by the firm. The strategists authoring this piece also contribute to an OAM managed portfolio product that relies on and trades on the information contained herein. The managed portfolio strategy trades frequently, both ahead of and after the publication of this report. OAM generally prohibits any analyst and any member of his or her household from executing trades in the securities of a company that such analyst covers. Additionally, OAM generally prohibits any analyst from serving as an officer, director or advisory board member of a company that such analyst covers. In addition to 1% (or more) ownership positions in covered companies that are required to be specifically disclosed in this report, OPCO may have a long positon of less than 1% or a short position or deals as principal in the securities discussed herein, related securities or in options, futures or other derivative instruments based thereon and makes a market in the securities discussed herein. Recipients of this report are advised that any or all of the foregoing arrangements, as well as more specific disclosures set forth below, may at times give rise to potential conflicts of interest.

Third Party Research Disclosure OAM has a research sharing agreement with OPCO pursuant to which OPCO provides OAM Strategy thought pieces to its institutional and retail customers. OPCO does not guarantee that the information in OAM Strategy reports is accurate, complete or timely, nor does OPCO make any warranties with regard to the strategy product or the results obtained from its use. OPCO has no control over or input with respect to opinions found in OAM strategy pieces. OAM is a registered investment adviser affiliate of OPCO.

This report is issued and approved by Oppenheimer & Co. Inc., a member of all Principal Exchanges, and SIPC. This report is distributed by Oppenheimer & Co. Inc., for informational purposes only, to its institutional and retail investor clients. This report does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such offer or solicitation would be prohibited. The securities mentioned in this report may not be suitable for all types of investors. This report does not take into account the investment objectives, financial situation or specific needs of any particular client of Oppenheimer & Co. Inc. Recipients should consider this report as only a single factor in making an investment decision and should not rely solely on investment recommendations contained herein, if any, as a substitution for the exercise of independent judgment of the merits and risks of investments. The strategist writing this report is not a person or company with actual, implied or apparent authority to act on behalf of any issuer mentioned in the report. Before making an investment decision with respect to any security discussed in this report, the recipient should consider whether such investment is appropriate given the recipient's particular investment needs, objectives and financial circumstances. We recommend that investors independently evaluate particular investments and strategies, and encourage investors to seek the advice of a financial advisor. Oppenheimer & Co. Inc. will not treat non-client recipients as its clients solely by virtue of their receiving this report. Past performance is not a guarantee of future results, and no representation or warranty, express or implied, is made regarding future performance of any security mentioned in this report. The price of the securities mentioned in this report and the income they produce may fluctuate and/or be adversely affected by exchange rates, and investors may realize losses on investments in such securities, including the loss of investment principal.

Oppenheimer & Co. Inc. accepts no liability for any loss arising from the use of information contained in this report. All information, opinions and statistical data contained in this report were obtained or derived from public sources believed to be reliable, but Oppenheimer & Co. Inc. does not represent that any such information, opinion or statistical data is accurate or complete and they should not be relied upon as such. All estimates and opinions expressed herein constitute judgments as of the date of this report and are subject to change without notice. Nothing in this report constitutes legal, accounting or tax advice. Since the levels and bases of taxation can change, any reference in this report to the impact of taxation. 

Investment Strategy should not be construed as offering tax advice on the tax consequences of investments. As with any investment having potential tax implications, clients should consult with their own independent tax adviser.

This report may provide addresses of, or contain hyperlinks to, Internet web sites. Oppenheimer & Co. Inc. has not reviewed the linked Internet web site of any third party and takes no responsibility for the contents thereof. Each such address or hyperlink is provided solely for the recipient's convenience and information, and the content of linked third party web sites is not in any way incorporated into this document. Recipients who choose to access such third-party web sites or follow such hyperlinks do so at their own risk. The S&P 500 Index is an unmanaged value-weighted index of 500 common stocks that is generally considered representative of the U.S. stock market. The S&P 500 index figures do not reflect any fees, expenses or taxes. This research is distributed in the UK and elsewhere throughout Europe, as third party research by Oppenheimer Europe Ltd, which is authorized and regulated by the Financial Conduct Authority (FCA). This research is for information purposes only and is not to be construed as a solicitation or an offer to purchase or sell investments or related financial instruments. This report is for distribution only to persons who are eligible counterparties or professional clients and is exempt from the general restrictions in section 21 of the Financial Services and Markets Act 2000 on the communication of invitations or inducements to engage in investment activity on the grounds that it is being distributed in the UK only to persons of a kind described in Article 19(5) (Investment Professionals) and 49(2) High Net Worth companies, unincorporated associations etc.) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended). It is not intended to be distributed or passed on, directly or indirectly, to any other class of persons. In particular, this material is not for distribution to, and should not be relied upon by, retail clients, as defined under the rules of the FCA. Neither the FCA’s protection rules nor compensation scheme may be applied. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Oppenheimer & Co. Inc. Copyright © Oppenheimer & Co. Inc. 2022.