Stocks End Higher To Start The Week

Plus 5 Just-Added Strong Buys Stocks End Higher To Start The Week [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks End Higher To Start The Week [Stocks End Higher To Start The Week]Image: Bigstock Stocks closed higher yesterday with all of the major indexes in the green. Last week's better than expected CPI and PPI inflation reports confirmed that inflation was on the decline. Still too high. But definitely moderating with core CPI (retail inflation) at 5.5% y/y vs. last month's 5.6% and last year's peak of 6.6%, while core PPI (wholesale inflation) came in at 3.2% y/y vs. last month's 3.4% and last year's peak of 8.2%. The Fed, in their latest FOMC announcement earlier this month, hinted that they will be pausing their rate hikes now that they've hit their terminal rate forecast of 5.1%. Interestingly, while the Fed has said they are not expecting to cut rates until next year (they are forecasting a Fed Funds rate of 4.1% in 2024, and 3.1% in 2025), Fed Funds traders are betting that the Fed cuts rates sooner rather than later with the futures market expecting a 70% chance of a 25 basis point rate cut by September. With the Fed news behind us (at least until their next meeting on June 13-14), and earnings season winding down (although we'll get plenty of retail earnings this week), the debt ceiling drama will be grabbing headlines this week. Talks are scheduled to resume today. There's a rumor that progress is being made. But also that there may be a short-term extension in the works to give both parties a chance to hammer out a larger deal without the impending X-date (when the Treasury runs out of emergency funding), looming so close by (June 1). We shall see. In other news, yesterday's Empire State Manufacturing Index came in well below expectations at -31.8 vs. last month's 10.8 and views for -2.0. Today we'll get Retail Sales, Industrial Production, Business Inventories, and the Housing Market Index. And more earnings. Even though earnings season is winding down (more than 91% of S&P 500 companies have already reported), we'll get plenty of retail earnings this week with Home Deport reporting this morning, Target reporting tomorrow, and Walmart reporting on Thursday, along with Chinese powerhouse Alibaba. In the meantime, the Dow and the S&P are within striking distance of their 2023 highs, while the Nasdaq just made another new 2023 high yesterday. With inflation on the decline, interest rates appearing to be on pause, personal incomes hovering near all-time highs, and the economy, while slowing, continuing to grow, that's good news for the market. See you tomorrow, [Kevin Matras - Signature] Kevin Matras Executive Vice President, Zacks Investment Research Sponsor [Graphite Shortage Could Derail the $7 Trillion EV Transition]( [image]( Graphite (not lithium) is expected to see the largest increase in demand of all battery metals over the next decade. But projections warn of an 8 million ton shortfall of graphite by 2040. That's why 97 more graphite mines are needed just to keep up with battery production for the $7 trillion transition to electric vehicles. [See how this could be great news for resource investors]( Most Popular Articles from Zacks.com [Cracking the Code: 5 Segments to Determine Future Market Direction]( Follow these 5 market segments to decode market action and determine the market's next move. [Read More »]( [3 Top Ranked Stocks with Substantial Share Buyback Programs]( Declining shares outstanding can be a strong indicator of responsible management, and a stock that is likely to be trending higher. 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