Why there’s no need to fear a bear market

A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up But a correction doesn’t necessarily mean that an even worse pullback is coming. Few analysts are predicting a long, painful bear market ahead. That’s when stocks drop more than 20% from recent highs.”Corrections are a temporary setback for a long-term investment strategy, and about half of all corrections since 1966 have resolved themselves in less than five months,” said James Solloway, chief market strategist at SEI’s Investment Management Unit, in a report last month.Solloway added that higher volatility does not mean there is a “high likelihood that we’re heading toward a bear market or a recession in the near future.” “Ups and downs are a normal part of the investment cycle,” he noted.Even a portfolio manager who runs a fund that is hedged against big stock market swings isn’t expecting a major drop anytime soon. “This is a normal pullback,” said Dan Cupkovic, manager of the Amplify BlackSwan Growth & Treasury Core (Chevron (CVX) is leading the Dow with a 15% gain while Exxon Mobil (XOM) is up more than 30%. Halliburton (HAL), Schlumberger (SLB), Occidental Petroleum (OXY), Hess (HES) and APA (APA) are among the top gainers in the S&P 500. Higher oil and gas prices are not good for consumers. But investors are pleased to see rising energy costs because it means more profits for oil giants.Along those lines, Exxon analysts have raised their earnings forecasts for 2022 by 16% over the past three months and have raised their 2023 profit targets by 20%.”We’re seeing this sector rotation into energy,” said Tony Minopoli, chief Investment officer at Knights of Columbus Asset Advisors. “Stocks will follow earnings.”Monday: Earnings from Tyson Foods (TSN), Hasbro (HAS), Amgen (AMGN) and Take-Two (TTWO)Tuesday: Earnings from BP (BP), Pfizer (PFE), Sysco (SYY), DuPont (DD), Harley-Davidson (HOG), Chipotle (CMG) and Peloton (PTON)Wednesday: Earnings from Honda (HMC), CVS (CVS), Fox (FOXA), Yum Brands (YUM), Pepsi (PEP), Disney (DIS), Uber (UBER), MGM (MGM) and Mattel (MAT)Thursday: US consumer prices; US weekly jobless claims; Earnings from Coca-Cola (KO), Kellogg (K), Twitter (TWTR), Zillow (Z), Expedia (EXPE), Affirm and Yelp (YELP)Friday: UK GDP; US consumer sentiment; Earnings from Goodyear (GT) and Under Armour (UA)