Stocks Up To Start The Week, Inflation And Jobs Reports On Deck Later In The Week

Plus 5 Just-Added Strong Buys Stocks Up To Start The Week, Inflation And Jobs Reports On Deck Later In The Week [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks Up To Start The Week, Inflation And Jobs Reports On Deck Later In The Week [Stocks Up To Start The Week, Inflation And Jobs Reports On Deck Later In The Week]Image: Bigstock Stocks closed higher on Monday to start the week on a positive note. This follows last week's higher weekly closes for the S&P and the Nasdaq. Yesterday's Dallas Fed Manufacturing Survey improved to -17.2 vs. last month's -20.0 and views for -21.0. Although, the Production Index fell to -11.2 vs. last month's -4.8. Today we'll get the Case-Shiller Home Price Index, the FHFA House Price Index, Consumer Confidence, and the Job Openings and Labor Turnover Survey report (or JOLTS for short). The report everyone is really waiting for, however, is Thursday's Personal Consumption Expenditures (PCE) index. This is the Fed's preferred inflation gauge. Last month's report showed continued easing with the headline rate coming in at 3.0% y/y vs. the previous month's 3.8%. And the core rate (ex-food & energy) declining to 4.1% y/y vs. the previous month's 4.6%. But the CPI and PPI inflation reports earlier this month 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 it appears as sticky as the Fed has feared. If Thursday's PCE report can show a meaningful decline, or at least rise less than expected (the consensus is currently forecasting a rise), that will underscore the narrative for the Fed pausing at their next FOMC meeting on September 19-20. But if we do see a rise, or worse, and even bigger increase than expected, that's yet another piece of data that favors further tightening. For perspective, both interest rate hawks and doves believe we're near the end of the Fed's rate hike cycle. Nonetheless, where it finally ends is the unknown. Then the question will be about how long rates stay at that level. But first things first. Thursday's PCE report will be the next important data set before the Fed's next meeting. That report comes out at 8:30 AM ET. Once that report is behind us, we'll then get the always important Employment Situation report on Friday. Another important report that could impact the Fed's monetary policy. The labor market has been incredibly strong, and has withstood this historic rate hike cycle. It's been so strong, even in the face of rising interest rates, that Fed Chair, Jerome Powell, had commented with seeming incredulity that rates have risen to 5% while the unemployment rate is still so low. So that too will be watched closely. In the meantime, the market will be trying to put the recent pullback behind it. Last week's gains were a good start. Same goes for yesterday's. We'll see if that can continue. See you tomorrow, [Kevin Matras - Signature] Kevin Matras Executive Vice President, Zacks Investment Research [See Zacks' Top Stocks for Free]( Starting today, you can get instant access to the latest picks from our time-proven strategies which since 2000 have soared far above the market. While the S&P 500 averaged +6.2% per year, our top strategies averaged gains as high as +46.4%, +49.5% and +55.2% per year. You'll also get our free Special Report, Top 10 Stock Screening Strategies that Make Money which spells out the formulas behind these top strategies. 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