Stocks Down For The Week, Inflation Data And Earnings On Tap For This Week

Plus 5 Just-Added Strong Buys Stocks Down For The Week, Inflation Data And Earnings On Tap For This Week [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks Down For The Week, Inflation Data And Earnings On Tap For This Week [Stocks Down For The Week, Inflation Data And Earnings On Tap For This Week]Image: Bigstock The big three indexes (Dow, S&P 500 and Nasdaq) closed lower on Friday, although the small-cap Russell 2000 and the mid-cap S&P 400 both finished higher with gains of 1.22% and 0.93% respectively. But they were all down for the Traders initially cheered Friday's weaker than expected Employment Situation report by the Bureau of Labor Statistics (BLS), as it countered Thursday's ADP jobs report which came in more than double what was expected. The hotter ADP report suggested the Fed's interest rate hikes haven't had as much of an impact on reducing inflation as hoped. But Friday's milder BLS report showed that maybe they did after all. The BLS Employment report came in at 209,000 (149,000 in the private sector and 60,000 in the public sector), vs. the consensus for 213,000 (199K in the private sector and 14,000 in the public). Although, the unemployment rate ticked down from 3.7% to 3.6% as expected. However, average hourly earnings rose more than anticipated with a 0.4% m/m gain vs. estimates for 0.3%, while the y/y increase came in at 4.4% vs. views for 4.2%. The market's gains were pared by the close and then some. But it was a fine report. Not too hot and not too cold. The jobs market remains strong. But not as blistering as feared. That means it's looking more and more likely that the Fed will resume their rate hikes as expected (likely another 25 basis points), when they meet again on July 25-26. But the jury is still out for what happens after that, as that meeting won’t be until September 19-20. Getting back to the Employment report, the sectors showing the biggest job gains were: the Government with 60,000 new jobs (that includes both state and local government); Healthcare with 41,000; Social Assistance jobs increased by 24,000; Construction added 23,000 jobs; Professional and Business Services were up 21,000; and Leisure and Hospitality gained 21,000 jobs as well. The decliners came from: Retail Trade shedding -11,000 jobs; and Transportation and Warehousing losing -7,000 jobs. Last week's pullback was not that surprising given the market's spectacular first half, especially the S&P 500 with their best first half in 4 years, and the Nasdaq's best start in 40 years! So some profit taking was bound to happen. And that's likely what we saw last week. We still have a few more weeks to go before we hear from the Fed. In the meantime, we'll get more inflation data this week with the CPI and PPI reports coming out on the 12 th and 13th. And Q2 earnings season has already unofficially begun. The number of companies ready to report will increase in the coming weeks with 97 on deck this week, 297 on deck for next week, and then 977 ready to report the week after that. Earnings season is always an exciting time as stocks typically go up during earnings season. With the first half behind us, and the second half underway, expectations remain high that there's still plenty more upside to go. See you tomorrow, [Kevin Matras - Signature] Kevin Matras Executive Vice President, Zacks Investment Research [Extended Deadline: 4 Stocks for Biggest Upside in Q3]( Because our Ultimate Four stocks have exceptional and immediate growth potential, we want to give you one more day to consider adding them to your portfolio. These aren't just 4 promising stocks. They were handpicked from hundreds of strong companies by Zacks' experts because they present the greatest upside this quarter. 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