Stocks End Higher, Inflation And Interest Rates Remain In Focus

Plus 5 Just-Added Strong Buys Stocks End Higher, Inflation And Interest Rates Remain In Focus [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks End Higher, Inflation And Interest Rates Remain In Focus [Stocks End Higher, Inflation And Interest Rates Remain In Focus]Image: Bigstock Stocks closed higher yesterday, but off their intraday highs. Concerns over inflation and what that means for interest rates continues. Especially with the next FOMC meeting just 3½ weeks away on March 21-22. But after last week's pullback (really the pullback over the last few weeks), stocks were up at the open and remained in positive territory thru the close. Plenty of earnings were on tap yesterday. And that will continue with another 282 on deck for today. (A total of 872 between today and the rest of the week.) In other news, yesterday's Durable Goods Orders were down -4.5% m/m vs. the consensus for -4.0%. Ex-Transportation, however, they were up 0.7% vs. expectations for 0.0%. Core Capital Goods were also higher by 0.8% vs. views for -0.1%. The Pending Home Sales Index rose by 8.1% m/m vs. last month's 1.1% pace and the consensus for 1.0%. The Index rose from 76.3 to 82.5. Although, the Dallas Fed Manufacturing Survey came in at -13.5 vs. views for -9.0 for the General Activity Index. Today we'll get the International Trade in Goods Report, Retail and Wholesale Inventories, the Case-Shiller Home Price Index, the Chicago PMI, the Richmond Fed Manufacturing Index, and Consumer Confidence. The markets will try and build on yesterday's modest gains. After a rough couple of weeks, the markets are due for a bounce. Earnings have been coming in better than expected, and in aggregate, so have the economic numbers. To be clear, things have slowed. But not to the point where one can talk credibly about a recession. This is important because as rates rise to tamp down inflation, there's room for the economy to slow even more without tipping into contraction. That's the so-called soft landing scenario which, so far, is still on the table. We will get plenty of additional economic reports before the next Fed meeting on rates. And we'll get another month's worth of CPI and PPI inflation reports beforehand as well. But the next PCE report doesn't come out until March 31, a little more than a week after the Fed announcement. For now, inflation indeed has moderated quite a bit from their summer highs last year. And aside from some blips along the way, it's expected to continue to moderate. That being said, give or take another one or few interest rate hikes, we are closer to the end of this interest rate hike cycle than the beginning. And that's a positive for the market. 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