Welcome to my latest video presentation. The article below is a condensed transcript; my video contains additional details and several charts.

You’ve probably heard of the acronym FUD. It stands for fear, uncertainty and doubt. Yes, the stock market rally lives on. S&P 500 corporate earnings, as well as the employment situation and the economy in the U.S., have shown surprising resilience.

But therein lays the rub. Better-than-expected economic growth feeds worries about inflation. We saw this dynamic play out last week, when Federal Reserve Chair Jerome Powell remarked on monetary policy at the central bank’s economic summit in Jackson, Hole Wyoming. Powell was more hawkish than Wall Street would have liked.

It remains unclear just how strongly the Fed’s tightening is weighing on the economy, especially since interest rate hikes exert a lagging effect. The fear among many analyists is that the Fed already has gone too far in pushing up rates to fight inflation. “There is always uncertainty about the precise level of monetary policy restraint,” Powell acknowledged on Friday.

Unlike the harsh reaction to his hawkish sentiments at last year’s Jackson Hole, stocks actually finished higher Friday, to close out a mostly positive week.

For the week, the main U.S, indices performed as follows: The Dow Jones Industrial Average -0.4%; the S&P 500 +0.8%; and the tech-heavy NASDAQ +2.3%. The MSCI EAFE, which measures stocks in developed countries excluding the U.S. and Canada, rose 0.8%. Oil prices fell -0.7% to settle slightly below $80 per barrel, as demand destruction fears superseded production cuts and tight supply.

Despite the energy sector’s depressed Q2 year-over-year earnings growth and the stalled momentum in crude prices, savvy investors with a long-term horizon continue to make bullish bets on the energy sector.

Technical indicators remain positive for the broader stock market. The S&P 500 hovers above its 50- and 200-day moving averages, which reflects upward momentum. Most analysts project a double-digit gain for the S&P 500, at least in the low teens, by year’s end.

The New York Stock Exchange Advance/Decline line (NYAD) also hovers above its 50- and 200-day moving averages, which signals that market breadth is healthy and the rally isn’t just being driven by mega-cap Silicon Valley household names that get incessant hype on CNBC. Smaller stocks in other sectors have been joining the party.

But not everything is roses. By market close Friday, the benchmark 10-Year Treasury yield (TNX) had inched higher to approach 4.30%. A close of the TNX above that critical support area would be bearish for stocks. The yield is a proxy for investor sentiment over the economy. When the yield goes up, stocks tend to go down.

Exerting a “halo effect” on the broader stock market has been the spectacular second-quarter performance last week of chipmaker Nvidia (NSDQ: NVDA), which has joined the elite club of behemoths with trillion-dollar valuations. Driven by demand for the company’s artificial intelligence-focused chips, Nvidia crushed expectations on the top and bottom lines and issued hugely optimistic guidance for the third quarter.

Nvidia has a higher market cap than some third-world countries. Which brings me to geo-economic news.

Last week, while central bankers from the U.S. and around the world were bellying up to the hotel bar in Jackson Hole, the BRICS bloc (Brazil, Russia, India, China, and South Africa) of emerging economies held its 15th annual summit. At the meeting, the bloc agreed to add these countries to the group: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates.

The move is intended to create a counterweight to the G7 of industrialized nations and curb Western power, a goal that’s dear to the hearts of Russian President Vladimir Putin and the House of Saud. Divisions over the Ukraine-Russia war, though, are bound to make this newly expanded alliance problematic.

For example, India has been trying to stay loyal to the U.S., China and Russia. We’ll see how long India, the world’s largest democracy, can continue this balancing act within a larger 11-member BRIC. That same principle applies to Brazil.

The expansion is a clear win for Iran, which has been grappling with domestic dissent and international sanctions. Iran sits on the world’s second-largest natural gas reserves, after Russia, and accounts for a quarter of the oil reserves in the Middle East. Iran’s inclusion into BRIC is a huge diplomatic win for the embattled theocratic government.

The week ahead…

We face a busy week of economic reports. The highlights: S&P Case-Shiller home price index, job openings. consumer confidence (Tuesday); ADP employment, pending home sales (Wednesday); initial jobless claims, personal income, personal consumption expenditures (PCE) index (Thursday); U.S. nonfarm payrolls, U.S. unemployment rate, U.S. hourly wages, ISM manufacturing, and construction spending (Friday).

The biggest news will be the latest PCE reading, for July. The PCE is the Fed’s preferred inflation gauge, and it arrives before the next Fed meeting in September.

Are you struggling with your own feelings of FUD? One way to beat FUD is to maintain appropriate portfolio allocations, to make sure you strike the right balance between growth and risk-reduction.

Under current conditions, the allocations that generally make sense now are 40% stocks, 30% bonds, 15% hedges, and 15% cash. You should also consider the advice of my colleague Robert Rapier.

Robert Rapier is chief investment strategist of a trio of Investing Daily advisories: Utility Forecaster, Rapier’s Income Accelerator, and Income Forecaster.

Robert’s forte is finding investments that offer both growth and income, with mitigated risk. Robert just found a rare type of investment that has raised its payouts by double-digits every year for the past 16 years. If you’re tired of anemic payouts, Robert has the remedy. Click here for details.

John Persinos is the editorial director of Investing Daily.

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This article originally appeared on Investing Daily.