Stocks Closed Lower On Friday But Higher For The Week

Plus 5 Just-Added Strong Buys Stocks Closed Lower On Friday But Higher For The Week [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks Closed Lower On Friday But Higher For The Week [Stocks Closed Lower On Friday But Higher For The Week]Image: Bigstock Stocks closed lower on Friday, but higher for the week, making it 4 up weeks in a row for the Dow, and 3 out of 4 weeks for the S&P and the Nasdaq. YTD, the Dow is up 2.23%, the S&P is up 7.77%, and the Nasdaq is up 15.8%. And since last October's key upside reversal, the Dow is up 17.9%, the S&P is up 15.7%, and the Nasdaq is up 18.7%. Better than expected inflation news lifted stocks last week. The Consumer Price Index (CPI) showed core inflation at 5.5% y/y vs. last month's 5.6% and last year's high of 6.5%. While the Producer Price Index (PPI) showed core inflation at 3.4% y/y vs. last month's 4.4% and last year's high of 8.2%. That underscored the narrative that inflation has fallen substantially, and is likely to continue to fall, thereby giving the Fed the opportunity to wrap up their rate hike cycle at their next FOMC meeting on May 3. We still have one more inflation report to get thru before the next Fed meeting, and that's the Personal Consumption Expenditures (PCE) index due out on April 28. That's the Fed's preferred inflation gauge. In the meantime, the market will turn their attention to earnings. Earnings season unofficially kicked of last week with some of the big banks reporting. JPMorgan Chase on Friday posted a positive EPS surprise of 20.2%; Citigroup posted a positive EPS surprise of 12.1%; Wells Fargo posted a positive EPS surprise of 6.96%; BlackRock posted a positive EPS surprise of 2.85%; and PNC Financial posted a positive EPS surprise of 10.6%, to name a handful. This week we'll hear from more of the big banks, along with the regional banks. We'll also hear from other assorted marquee names like Netflix, Johnson & Johnson, Lockheed Martin, Tesla, IBM, American Express, and Proctor and Gamble. All in all we'll hear from 271 companies this week. (That list expands to 998 companies next week. And then 1,613 the week after that.) In other news on Friday, Retail Sales dipped -1.0% m/m vs. the consensus for -0.4%. Industrial Production increased 0.4% m/m vs. the consensus for 0.3%, but Manufacturing Output slipped -0.5% vs. views for -0.1%. The Capacity Utilization Rate, however, ticked up again to 79.8% vs. estimates for 78.8%. Business Inventories increased 0.2% vs. last month's -0.2% and views for 0.3%. And Consumer Sentiment rose to 63.5 vs. last month's 62.0 and the consensus for 62.7. Consumer sentiment, like consumer confidence, are important metrics given that roughly 70% of GDP is comprised on consumer spending. We'll get a host of other economic reports this week. But again, earnings will likely be the main focus. It's been a great start to the year so far. Night and day difference from last year. Last year at this time, inflation was on the rise, same for interest rates, along with fears of what that would do to the economy. This year, inflation is on the decline, we are near the end of the interest rate hike cycle, and that's bullish for the economy. And that's why it looks like there's more upside to go in the market this year. See you tomorrow, [Kevin Matras - Signature] Kevin Matras Executive Vice President, Zacks Investment Research [Why Haven't You Looked at Zacks' Top Stocks?]( Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation. 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