Stocks Down, Earnings Season Officially Begins This Week

Plus 5 New Strong Buys for Today Stocks Down, Earnings Season Officially Begins This Week [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks Down, Earnings Season Officially Begins This Week [Stocks Down, Earnings Season Officially Begins This Week]Image: Bigstock Stocks closed lower yesterday as earnings season officially begins this week. While Alcoa has long been the official start to earnings season, there are plenty of big name banks and financial companies on deck to report this week that the market is looking forward to. (BTW, Alcoa is only the so-called 'official' start of earnings season because it was once the first Dow component to report earnings. Just like Hewlett-Packard has been called the official end of earnings season because it used to be the last of the Dow components to report earnings. Ironically, both AA and HPQ are no longer part of the Dow Jones Index. But after bookending earnings season for so long, that tradition has stuck, regardless of their current Dow non-membership status.) Earnings season is always an exciting time for stocks, since stocks typically go up during earnings season (yesterday notwithstanding). As for yesterday's price action – even though it's no fun when stocks go down, the pullback yesterday simply filled in a common gap left on the chart from Thursday's gap higher open. (Although, while that's true for the S&P and Nasdaq, the gap is still open for the Dow.) In addition to the focus on earnings, the fate of the $1.2 trillion infrastructure bill, and the reconciliation bill, which is likely to be somewhere in the vicinity of $2 trillion, will be watched closely as well. Once you start talking trillions of dollars, that's an enormous amount of money that could possibly be pumped into the economy. And that could lift stocks even more. We also have a full slate of economic reports this week. Today we'll get the NFIB Small Business Optimism Index, the Redbook retail sales report, and the Job Openings and Labor Turnover Survey report (JOLTS). Tomorrow we'll get MBA Mortgage Applications, the Consumer Price Index, the Atlanta Fed Business Inflation Expectations report, the FOMC Minutes, and the Treasury Statement. On Thursday we'll get Weekly Jobless Claims, and the PPI-Final Demand report. And on Friday we'll get Retail Sales, the Empire State Manufacturing Index, Import and Export Prices, Business Inventories, and Consumer Sentiment. Should be a busy week. In the meantime, keep your eyes on the big picture. With full-year GDP growth expected to come in at the fastest pace in 37 years, with job growth expected to accelerate in Q4, and with Covid cases on the decline while the promise of new Covid therapeutics are in the offing, it looks like there's a lot more upside to go for both the economy and the markets. So make sure you're taking full advantage of it. 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