Stocks Up Sharply As Rally From Recent Pullback Continues

Market Moves You Need to See Stocks Up Sharply As Rally From Recent Pullback Continues [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks Up Sharply As Rally From Recent Pullback Continues [Stocks Up Sharply As Rally From Recent Pullback Continues]Image: Bigstock Stocks closed sharply higher yesterday with the Nasdaq gaining 1.74% and the S&P up 1.45%. After last week's gains, and this week's solid start, it's looking like the pullback might have run its course. Yesterday's Case-Shiller Home Price Index rose 0.9% m/m (unadjusted) vs. the consensus for 0.8%. On a y/y basis it was down -1.2%, but that's an improvement over last month's -1.7% pace. The FHFA House Price Index was up 0.3% m/m, while the y/y change was up 3.1% vs. last month's 2.9%. Consumer Confidence fell to 106.1 vs. last month's downwardly revised 114.0 and views for 116.5. And the Job Openings and Labor Turnover Survey report (or JOLTS for short) showed 8.827 million job openings vs. last month's 9.165M and estimates for 9.559M. Today we'll get MBA Mortgage Applications, Pending Home Sales, the second estimate for Q2 GDP, the International Trade in Goods report, Retail and Wholesale Inventories, the Survey of Business Uncertainty, the ADP Employment Report, and the State Street Investor Confidence Index. A jam-packed day of reports. But the report everybody is really looking forward to 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. This will be the last PCE report we'll get before the Fed meets again on September 19-20. Granted, we'll get 1 more CPI report and 1 more PPI report before then next month. But the PCE report appears to carry more weight with the Fed. So all eyes will be on that. Then on Friday we'll get the Employment Situation report. Another important report that could impact the Fed's monetary policy. But we've got a big day of reports today to get thru first. The pullback from their recent highs, which appears to have seen its worst levels the other week with the Dow down by -4.30%, the S&P down -4.78%, and the Nasdaq down by -7.43%, has been cut in half with the Dow now down just -2.18%, the S&P down -1.99%, and the Nasdaq down -2.89%. And it looks like there's plenty more upside to go. And rightly so. While inflation is still too high, it's well off its peak from last year, the Fed is nearing the end of their rate hike cycle, and the economy remains resilient with the Federal Reserve Bank of Atlanta, via their GDP Now forecast, estimating Q3 GDP to come in at an upwardly revised 5.9%. And all of that bodes well for the economy and the market. See you tomorrow, [Kevin Matras - Signature] Kevin Matras Executive Vice President, Zacks Investment Research [Ultimate Access is Only $1.]( Capitalize on today's market by seeing all the private trades hidden from the public on Zacks.com. 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