Stocks Soar To Kick Off Q4

Plus 5 New Strong Buys for Today Stocks Soar To Kick Off Q4 [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks Soar To Kick Off Q4 [Stocks Soar To Kick Off Q4]Image: Bigstock Stocks soared yesterday with all of the major indexes up by nearly 2.5% or more. With yesterday's sharp rally, the count begins for a follow-through day to signal a new uptrend could be starting. The strongest follow-through days (a rally of 1% or more on increased volume), usually come between days 4 and 7. That doesn't mean we can't go higher today or tomorrow. Nor does it mean we can't go lower either. But, ideally, we should be looking for something substantial on the upside later this week or early next week. In the meantime, in order for the follow-through day count to remain intact, the market should not take out day 1's lows. In other news, yesterday's PMI Manufacturing report came in at 52.0, slipping from last month's 52.8, but beating the consensus for 51.8. The ISM Manufacturing Index also slipped from last month coming in 50.9 vs. 52.8 and views for 52.4. Construction Spending was down as well, dipping -0.7% m/m vs. last month's -0.6% and estimates for -0.1%. On a y/y basis, it was up a solid 8.5%. That's down from last month's upwardly revised pace of 9.5%. But it's a solid report nonetheless. It's also worth noting that the Federal Reserve Bank of Atlanta recently increased their estimates for Q3 GDP via their GDP Now forecast. For the last couple of weeks it had been at 0.3%. But on Friday, September 30, it was upgraded to 2.4% based on upward revisions to personal consumption expenditures, and gross private domestic investment. On Monday, that was lowered a tad to 2.3% based on the just reported dips in manufacturing and construction spending. But, no matter how you slice it, the jump from 0.3% to 2.3% is a sharp increase, and a bullish turn for Q3 GDP expectations. Today we'll get another look at the economy with the Factory Orders report, and the JOLTS (Job Openings and Labor Turnover Survey) report. After a rough 3 quarters, Q4 is off to an auspicious start. Let's hope this continues. Q4 is typically the best quarter of the year for stocks. And it being a midterm year (Q4 is typically up in midterm years), the odds are even better. Moreover, with Q1 (following a midterm year), historically being even stronger than Q4, we could be looking at an even bigger and longer run up. And when we factor in that the third year of the presidential cycle (that's what 2023 will be), has historically seen the best performance of all four years, the outlook for stocks looks even stronger. In the meantime, we'll take it one day at a time. Great day yesterday. Let's see how today does. See you tomorrow, [Kevin Matras - Signature] Kevin Matras Executive Vice President, Zacks Investment Research Sponsor [$130 trillion revolution in this cup?]( Don't try this at home. Former Goldman Sachs executive Nomi Prins recently drank the contents of a brand-new type of battery... To reveal why 5 billionaires are investing in [this tiny $4 company behind it.]( And how it could unleash a $130 trillion energy revolution. [Watch the 30-second demo here.]( Most Popular Articles from Zacks.com [5 Stocks to Buy on Rise in Personal Income, Personal Spending]( Higher personal income has resulted in higher spending, which has seen consumer confidence soar over the past couple of months. [Read More »]( [White Gold; 3 Lithium Stocks for a Supercharged EV Industry]( Due to its color and skyrocketing market value, many have coined this non-ferrous metal "white gold." 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