Friday the 13th = Investors Not That Spooked

Stocks retreated early on Friday when word first hit our shores that S&P and Fitch were talking about some bond rating downgrades in Europe. As the day progressed, US stocks erased half of the earlier losses to still end the week in positive territory. Heck, even the European markets were barely in the red Friday on this "seemingly" bad news.

Why did stocks not sell off more?

I'm not saying that bond downgrades are a good thing. However, bond investors are way ahead of the agencies in understanding the risks at hand (as usual). So this is just tough guy posturing on the part of the agencies to show that they are relevant (after years of irrelevancy and mistakes). So I wouldn't sweat these actions too much.

Looking ahead, US investors will have their attentions turned inward to determine the quality of this earnings season. The few early results to date have been underwhelming. If it stays on that path, then the recent rally will come to a halt. However, if we get more reports that reinforce or improve upon the 2012 estimates, then stocks will continue higher.

Let's see what they got!

Hot Topics on Zacks' Real Time Insight: Join the Conversation Now

•  What Is the Largest Position in Your Portfolio? Enough theoretical talk about the economy and outlook for stocks. It's time to put your "mouth where your money is". Find out where Zacks' experts are actually putting their money to work in 2012.

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Best,

Steve Reitmeister
Executive VP, Zacks Investment Research

Today's Top Stories: Monday- January 16, 2012

ZACKS RANK BUY STOCKS

• Aggressive Growth - Thomas & Betts Corp. (TNB) has seen a positive earnings surprise in each of its last six quarters. The topline has also shown a similar history with back to back beats of more than 3%. Read More...
   
• Growth & Income - Teekay LNG Partners L.P. (TGP) pays a distribution that currently yields a very attractive 7.8%. And analysts expect recent additions to its fleet to drive strong earnings growth in the near future. Read More...
   
• Momentum - Kodiak Oil & Gas Inc. (KOG) recently moved into a Zacks Rank 1, when we noticed several analysts upgrading their forward earnings outlooks. The company has been showing explosive year over year growth in revenues. Read More...
   
• Value - C&J Energy Services Inc. (CJES) huge earnings growth of 375% is expected in 2011 and analysts are also still bullish on 2012. The 2012 Zacks Consensus Estimate rose to $4.33 per share. That is earnings growth of 36%. Read More...
   

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PeopleAndPicks.com:

VIP "Neurodoc" is posting gains early in the year with BUY calls in (LYB), (STX), (URI) and (VIV). Read More...

• 9 eurozone nations downgraded by S&P @ CNNMoney.com
• Earnings, Europe Top Agenda in Coming Week @ TheStreet.com
• Friday's Decline Leaves Wall Street Full of Buying Opportunities @ FOXBUSINESS.com
• U.S. stocks face lowered earnings bar @ MarketWatch.com

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