Stocks Up On Friday, And For the Week, S&P Hits New Record Close

Plus 5 New Strong Buys for Today Stocks Up On Friday, And For the Week, S&P Hits New Record Close [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks Up On Friday, And For the Week, S&P Hits New Record Close [Stocks Up On Friday, And For the Week, S&P Hits New Record Close]Image: Bigstock Stocks rose on Friday and for the week, with the S&P posting its best week since February, and hitting a new record close. YTD, the Dow is up 17.5%, the S&P is up 25.5%, and the Nasdaq is up 21.3%. And with exactly three weeks left in 2021, it looks like there's more upside to go. Friday's Consumer Price Index rose 0.8% m/m and 6.8% y/y. While those inflation numbers were largely in line with expectations, it was also the biggest y/y increase in 39 years. Core inflation, which excludes Food & Energy (because who uses that), was up 0.5% m/m and 4.9% y/y. That was the largest y/y increase in 30 years. But the markets shrugged it off and continued their upward climb. As they should. Inflation doesn't tank markets, high interest rates do. To be more specific, high inflation typically leads to high interest rates, which slows the economy, and oftentimes leads to recession, thereby tanking the markets. But the Fed Funds rate remains at record lows near zero. And they're not expected to budge until mid-next year at the earliest. But even when they do, so what. We'll still be at near record lows, sans 25 or 50 basis points. And it should be noted that over the last 50 years, there's never been a recession (aside from last year's pandemic-induced plunge), when the Fed Funds rate was under 4%. So at quarter-point moves or even half-point moves, it will literally take years to get anywhere near 4%. And while the economy is growing at an above-trend pace, that's not the sole reason for inflation. Quite frankly, much of it is due to supply chain disruptions and labor shortages. And simply raising interest rates won't suddenly fix the supply issues or labor concerns. The Fed knows this. And that's one of the reasons why they've been reluctant to do so. As the economy continues to reopen, businesses chip away at the problems, and the economic impact of the pandemic gets put behind us, that will ultimately ease the supply crunch. And the steady hiring pace will ultimately fix the labor shortage. That's when the excessive inflation we're seeing will ease. And that's expected to happen by mid-next year. In the meantime, the economy is in growth mode. And a strong economy leads to higher stock prices. That's why stocks keep going up. And why it looks like there's a lot more upside to go, not just for this year, but for several years to come. What we're seeing right now is history in the making. And historic times typically lead to historic price moves. 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 [Today, See Zacks' Top Stocks for Free]( Starting now, you can get instant access to the latest picks from our hottest market-beating strategies. From 2016 through 2020 they gained +381.1%, +424.1%, +429.0%, +477.8%, and even +580.0%. Zacks will also give you a free Special Report, Top 10 Stock Screening Strategies with formulas you can use to find high-potential gainers anytime you please. [See Stocks Now »]( Most Popular Articles from Zacks.com [3 Homebuilders Hitting All-Time Highs]( The Zacks Building Products – Homebuilders industry group has outpaced the market this year with a 36.7% return. [Read More »]( [5 Affordable Mid-Caps to Gain From a Likely Year-End Rally]( Each of these mid-cap stocks has a favorable Zacks Rank and is available at an attractive valuation. [Read More »]( [3 Electronics Stocks With Bright Industry Prospects to Watch]( Looking at aggregate earnings estimate revisions shows that analysts are optimistic about this group's earnings growth potential. [Read More »]( [RVs Had a Great 2021; More Room to Grow?]( The industry has already built more RVs this year than in any other year. [Read More »]( [3 Bank Stocks for 2022 With Federal Reserve in the Spotlight]( These banks are fundamentally strong and will benefit from the robust economic growth, rising loan demand and higher interest rates. [Read More »]( Sponsor [Start Every Day Ahead of Wall Street]( Before you make a trade, get today’s market news from Zacks’ latest Ahead of Wall Street article. With timely information from Zacks analysts, each daily article features a preview of where the market is headed. Plus, Zacks #1s on the move, stock research reports, earnings and economic news, and a top-headline analyst blog. All of it in one easy-to-follow place to give you the edge. [Get the latest news »]( [Bull of the Day: Cross Country Healthcare (CCRN)]( There are a lot of tailwinds for this staffing play for the healthcare system. [Read More »]( [New Zacks Strong Buys for December 13th]( Here are 5 stocks added to the Zacks Rank #1 (Strong Buy) List today. [Read More »]( 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 of Service". [www.zacks.com/terms_of_service]( 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 November 1, 2021. 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