Stocks Close Higher To Start The Week

Plus 5 Just-Added Strong Buys Stocks Close Higher To Start The Week [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks Close Higher To Start The Week [Stocks Close Higher To Start The Week]Image: Bigstock Stocks closed higher yesterday with the Nasdaq leading the way with a 1.05% gain. The S&P and Nasdaq were down last week for the second week in a row, and opened lower yesterday morning. But they quickly turned things around, and ended up finishing at their best levels of the day. Last week's inflation reports were a mixed bag in that the CPI came in slightly better than expected while the PPI came in slightly worse than expected. Neither were up or down enough to surprise anybody. The takeaway, however, was that even though inflation is meaningfully off of last year's highs, it's still too high at the moment, and appears as sticky as the Fed has feared. Short of some dramatic change in the Personal Consumption Expenditures (PCE) index later this month, or next month's CPI and PPI reports, it looks like the Fed is still on pace to raise rates by another 25 basis points. The big question after that, however, is then what? It appears we are nearing the end of the Fed's historic rate hike cycle. But maybe more important than how high rates end up (nobody is legitimately forecasting more than 1 or possibly 2 more hikes), is how long they stay at their terminal rate levels? We've all heard the mantra of rates will stay higher for longer. But how long is probably the bigger unanswered question than how high. In the meantime, investors will focus on the other upcoming economic reports. Today we'll get Retail Sales, the Empire State Manufacturing Index, Import and Export Prices, Business Inventories, and the Housing Market Index. We'll also get more earnings. Earnings season is mostly done. But there's another 421 companies on deck to report for the rest of this week, with 140 of them set to report today, including retail giant Home Depot, Alcon, Sea Limited, Cardinal Health, and Chinese music powerhouse Tencent to name a handful. The S&P over the last two weeks has pulled back by as much as -2.72% (using their highest close 2 weeks ago to their lowest close since then which was last Friday), while the Nasdaq has pulled back by -4.96% (from their highest close 4 weeks ago to Friday's close). Currently they are down by -2.16% and -3.96% respectively. Stocks pull back roughly -5% on average of 3-4 times per year. After the recent runup, will we see more of a pullback, or has it run its course? That will be the focus this week and in the short-term. But the longer-term outlook (rest of the year), still favors the upside. The resilient economy and better than expected earnings point to more gains. Then add in the favorable statistical trends, not the least of which is the 4-year Presidential cycle which shows that year 3 (that's 2023), is the best year of all 4 years (since 1950, stocks have always gone up in the year after midterms, with an average 12-month forward return of 18.6%), and year 4 (that's 2024) is the second best year, and it looks like there's a lot more upside to go. See you tomorrow, [Kevin Matras - Signature] Kevin Matras Executive Vice President, Zacks Investment Research Sponsor [A 100% Win Rate In 2022...]( [image]( The next 10 minutes could change your life. We've recorded a special sit-down interview with a reclusive millionaire who details how he's closed out winning trade after winning trade throughout the volatility of 2022. In fact, he hasn't closed a single losing trade since 2016. Sounds impossible? It's not – and he'll prove it to you. 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