Stocks Up On Friday, Fed Officially Begins Their Tapering Today

Plus 5 New Strong Buys for Today Stocks Up On Friday, Fed Officially Begins Their Tapering Today [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks Up On Friday, Fed Officially Begins Their Tapering Today [Stocks Up On Friday, Fed Officially Begins Their Tapering Today]Image: Bigstock Stocks closed up on Friday, but just missed finishing up for the week, ending a 5-week winning streak for the Dow, S&P, and Nasdaq. The hotter than expected inflation reading last week (the CPI showed inflation jumping to a 31-year high), weighed on stocks. But they managed to regroup and bounce back with the Dow just 0.63% off their all-time closing highs (made just the other week), while the Dow and the Nasdaq trail their records by just 0.31% and 0.97% respectively. On Friday afternoon, the Fed published their taper schedule, confirming what they said less than two weeks ago – that they would begin tapering their purchases of Treasuries by $10 billion per month this month (starting today), and their Mortgage Backed Securities (MBS) by $5 billion per month. So instead of buying $80 billion in Treasuries and $40 billion in MBS per month ($120B total), they'll now buy $70B in Treasuries and $35B in MBS ($105B total). Then in mid-December, they'll cut their purchases from a total of $105B to $90B (that's $60B in Treasuries and $30B in MBS). Stocks added to their gains on the news, as this was the first and long awaited step for the Fed to start doing something about inflation. But rates remain at near zero and are expected to stay that way for the foreseeable future. In other news, the JOLTS report (Job Openings and Labor Turnover Survey), showed September job openings at 10.438 million. That's down from last month's upwardly revised 10.629M, but above the consensus for 10.100M. It was also reported that the 'Quits Rate' (number of people quitting their jobs), rose to a record 3% or 4.4 million people in September. It's a fascinating development. We've been seeing this play out for months – more jobs than there are unemployed people to fill them. On top of that, you've got workers who are employed calling it quits, further exacerbating the situation. All while the economy is rebounding in historic fashion, and employers scramble to find help. Gladly the economy is strong. And having more jobs than people to fill them is a better problem than not enough jobs to go around. But these supply chain problems and worker shortages will need to be worked out soon. Both are contributing to inflation. And these imbalances can't go on forever without more severe consequences to follow. Fortunately, the latest employment report showed job growth accelerating. If that trend continues, and it looks like it should, we should start seeing more improvement in the supply chain and worker shortage front. The Consumer Sentiment report was a bit disappointing at 66.8, down from last month's 71.7 and views for 72.3. No doubt it was negatively impacted by the surge in inflation. Ironically, companies are reporting record earnings, banks are the strongest they've been in years, household income has been on the rise, but inflation has a way of casting a pall over things, even other positive developments. All the more reason to get inflation under control. In the meantime, stocks are trading near their all-time highs. Economic growth is accelerating. And with November and December typically being strong months for stocks, it looks like there's a lot more upside to go. So make sure you're taking full advantage of it. See you tomorrow, [Kevin Matras - Signature] Kevin Matras Executive Vice President, Zacks Investment Research Sponsor [Miso Robotics]( has built a cloud-connected AI platform that enables autonomous robotic kitchen assistants to perform tasks such as frying and grilling alongside chefs in a commercial kitchen. You might have already met Flippy — the robot that's fried 175,000+ lbs of food and flipped 10,000+ burgers — but recently Miso Robotics has expanded its product range and partnerships. It's latest update is a partnership with Inspire Brands, parent company of Buffalo Wild Wings, called Flippy Wings — a robotic frying solution forecasted to increase food production speed by 10-20%. Join Miso Robotics in building the kitchen of the future by investing in their Series D round of investment. 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