Stocks Soar On Better Retail Earnings And Hope Over Debt Ceiling Talks

Plus 5 Just-Added Strong Buys Stocks Soar On Better Retail Earnings And Hope Over Debt Ceiling Talks [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks Soar On Better Retail Earnings And Hope Over Debt Ceiling Talks [Stocks Soar On Better Retail Earnings And Hope Over Debt Ceiling Talks]Image: Bigstock Stocks soared yesterday with the Dow, S&P and Nasdaq each up by roughly 1.20%, while the small-cap Russell 2000 led the way with a 2.21% gain. Before the open, large retail earnings were back on stage, this time with Target reporting a 17.8% positive EPS surprise, although missing slightly on revs with a -0.06% negative sales surprise. But net sales were up vs. this time last year. They were cautious on full-year EPS guidance however, putting estimates at $7.75-$8.75 (midpoint of $8.25), which was under the consensus for $8.36. But unlike Home Depot on Tuesday, investors cheered the news for Target sending shares up 2.58%. This morning we'll hear from retail giant Walmart as they report before the open. And after the close we'll hear from Chinese powerhouse Alibaba. The market also cheered news out of D.C. after both parties expressed optimism that a default would be avoided. There's still a long way to go to find a deal. But with both parties essentially saying default is not an option, that helped lift stocks. In other news, MBA Mortgage Applications declined by -5.7% w/w, with purchases down -4.8%, and refi's down -7.7%. And the Housing Starts and Permits report saw starts come in at 1.401 million units (annualized) vs. last month's 1.371M and views for 1.405M, while permits came in at 1.416M vs. last month's 1.437M and views for 1.430M. Today we'll get Weekly Jobless Claims, Existing Home Sales, the Philadelphia Fed Manufacturing Index, E-Commerce Retail Sales, and the Leading Indicators report. At the moment, all of the indexes are tracking higher for the week. And if all goes well, it would make it 4 up weeks in a row for the Nasdaq. You'll recall the Nasdaq officially exited their bear market last week and began a new bull market. From their bear market low close last year, the Nasdaq is up 22.4%. And from the beginning of their new bull market, they are up 1.99%. It's a been a great year so far. There's still plenty of headwinds. Inflation is still too high. And the economy, while resilient, is slowing. But that might very well be working in the market's favor as that's been helping to lower inflation, and therefore prompting the Fed to pause their rate hikes. And the idea of a softish landing remains a legitimate outcome after all. Clearly the market likes what it's hearing. And short-term volatility surrounding the debt ceiling negotiations notwithstanding, it looks like there's plenty more upside to go. Additionally, consider this: over the last 60 years, if a bear market in the S&P goes down by -25% or more, stocks are up on average of 38% a year later. Those stats date back to 1962, and encompass 9 bear markets. Amazingly, the market was higher the next year in 8 of those times. Pretty stellar odds. To learn more about why the odds of a bull market continue to grow, be sure to read our latest commentary... [Stocks Now Headed for New Highs?]( Best, [Kevin Matras - Signature] Kevin Matras Executive Vice President, Zacks Investment Research Sponsor [How to Invest in AI's Fast-Growing Market]( [image]( The AI market stands at $160 billion in 2023. Estimates are the AI market will grow 20-fold to $1.8 TRILLION by 2030. One little-known company is looking to win big with a new network technology no one else has. AI could explode... and soon. 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