Stocks Up As Impressive Retail Earnings Underscore The Strong Economy

Plus New Zacks Strong Buys for Thursday, August 22 Profit from the Pros Stocks Up As Impressive Retail Earnings Underscore The Strong Economy Stocks closed solidly higher, building on gains from earlier in the week. While optimism grows over the next round of trade talks with China in September, and for another round of interest rate cuts in September as well, the real catalyst for the market's gains recently, and all year, has been our stellar economy. That was on full display again with company after company reporting strong sales and impressive earnings. Walmart and Home Depot reported earlier in the week, with Lowe's and Target reporting yesterday – with all of them crushing the ridiculous narrative of an economy in danger. I've been railing against this false narrative since early last year when everybody thought the so-called trade war was going to cause a recession. (It didn't.) Then when various parts of the yield curve began inverting starting back in December. (No recession then or now.) In fact, the economy has only gotten stronger, and the market has only climbed higher. I bring up the yield curve because the 10-year vs. 2-year briefly inverted again yesterday. But don't pay any attention to it. Former Fed Chair Janet Yellen dismissed the yield curve inversion hysteria by explaining that there were a number of factors other than market expectations causing the yield curve to invert. And that there's no threat of a recession at this time. And she's right. Our full year GDP is on pace for 2.6%, which is stronger than the average annual GDP of this entire 10½ year expansion. Unemployment is near record lows. Consumer confidence is near record highs. And corporate earnings continue to impress. The biggest reason why the yield curve inverted is because there's an enormous demand for our Treasuries. And it's easy to see why. With the slower growth rates around the globe, and the pervasiveness of near zero yields and negative yields in bonds of other countries, where else are bond investors going to put their money? Think about it -- if you have hundreds of millions of dollars or billions of dollars, capital preservation is priority number one (and the virtual risk-free guarantee of the U.S. Treasury satisfies that), and then a positive yield is priority number two. And that makes U.S. Treasuries the best game in town. But when/if the Fed cuts rates again, that will push short-term yields down, where they belong, and correct the inversion. And not so incidentally, it will stimulate more economic activity and likely send the market higher. And the odds are at 74% that we'll indeed get another rate cut when the Fed meets on September 18th, with more and more people speculating that it could be 50 basis points this time. That's very bullish for the economy and the market. While I wouldn't be surprised to see some additional volatility as we approach the action-packed month of September. I'd definitely buy any dips. Because it looks like there's a lot more upside to go. So make sure you're taking full advantage of it. That means getting into the right stocks and staying out of the wrong ones. If you're looking for additional stocks to add to your portfolio for the next leg up, be sure to read our latest commentary on insider trading (the legal kind). When top executives at companies are buying more shares, or when large numbers of executives are making new purchases, that can send a powerful signal that something good is happening to that company and will likely happen to that stock. And that can translate to big gains. So be sure to check out our latest commentary... [When "Insider" Greed Is Good]( Best, Kevin Matras Executive Vice President, Zacks Investment Research Sponsor [New 5G Device is Revealed to Public for the First Time]( A groundbreaking new technology is expected to be in every household in America by the end of the year... This technology has the potential to make over 266 million smartphones become obsolete forcing nearly every American to switch over to this new "5G Device." [Click here to learn more.]( Most Popular Articles from Zacks.com [5 Surging Tech Stocks Amid Past Month's Volatility]( The recent concerns about a U.S.-China trade deal and consequently global economic slowdown have not stalled growth of all technology stocks. [Read More »]( [Warren Buffett is Buying More Bank Stocks: Should You Too?]( Despite a challenging operating backdrop for the sector, the Oracle of Omaha is adding bank stocks to his investment portfolio. [Read More »]( [3 Discount Store Stocks to Buy as Retail Sector Sees Boost]( We take a look into stocks poised to continue their momentum in the closing half of 2019. [Read More »]( [5 Winners From PBOC's Stimulus Boost]( China and Hong Kong stocks have rallied after the People's Bank of China's announcement of their new Loan Prime Rate (LPR). [Read More »]( [Earn 5% Yields or More With These Dividend ETFs & Stocks]( Dividend securities are the major sources of consistent income for investors, creating wealth when returns from the equity market are at risk. [Read More »]( Sponsor [Rare Insider Buy: Should You Follow?]( It's rare for insiders to pony up personal funds to buy shares of their own company when it's already trading near multi-year highs. But that's exactly what two officers just did to the tune of $882,144. Both are awarded free shares as part of their compensation but they wanted more. Now. What possible reason would they have for doing this? They know something and are convinced the stock is on the verge of a surge. Using a proprietary strategy, we targeted that insider buy plus a handful of other compelling stocks with fresh insider purchases. These time-sensitive opportunities are now open to public view – but only until Sunday, August 25. [See Zacks' hand-picked insider trades now >>]( [Bull of the Day: Alibaba (BABA)]( Let's dive into why Chinese e-commerce powerhouse Alibaba is Thursday's Bull of the Day... [Read More »]( [New Zacks Strong Buys for August 22nd]( Here are 5 stocks added to the Zacks Rank #1 (Strong Buy) List today. [Read More »]( [Customize Your Profit from the Pros Delivery]( Download our app for convenient on-the-go access to even more—daily and weekly newsletters published by Zacks experts, proprietary research and tools, and Portfolio Tracker on Zacks.com. [Download our Zacks App for Apple iOS]( [Download our Zacks App for Android]( Visit [Success Stories]( to hear how Zacks research, tools and portfolios help our members outperform the market. Get all of our market insights and much more when you connect with us. [Visit Zacks on Facebook]( [Follow Zacks on Twitter]( [See Zacks videos on YouTube]( [Join Zacks on LinkedIn]( [Read Zacks Commentary on StockTwits]( This free resource is being sent by [Zacks.com](. We look for investment resources and inform you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. [www.zacks.com/disclaimer](. Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research is not a licensed securities dealer, broker or US investment adviser or investment bank. The Zacks #1 Rank Performance covers the period beginning on January 1, 1988 through June 3, 2019. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank #1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit [( for information about the performance numbers displayed above. Zacks Emails If you would prefer to not receive future profit-producing emails from [Zacks.com]( the primary purpose of which is the commercial advertisement or promotion of a commercial product or service, then please [click here]( and confirm your request. If you have trouble with the unsubscribe link, please email support@zacks.com. Zacks Investment Research 10 S. Riverside Plaza, Suite 1600 Chicago, IL 60606