Stocks Closed Mixed To Start Q4

Market Moves You Need to See Stocks Closed Mixed To Start Q4 [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks Closed Mixed To Start Q4 [Stocks Closed Mixed To Start Q4]Image: Shutterstock Stocks closed mixed yesterday with Dow in the red, while the S&P and Nasdaq finished in the green. In spite of last week's Personal Consumption Expenditures (PCE) index, which showed core inflation continuing to ease, bond yields continue to rise. Even though the Fed is only forecasting one more possible rate hike this year, which would put the Fed Funds rate at a midpoint of 5.6%, some are speculating that the Fed could be forced to raise rates even higher if inflation remains as sticky as it's been, or if it starts going back up. While last week's PCE report indeed showed the core inflation rate coming down, the headline rate (which includes food & energy) ticked up. Last week's comments by Jamie Dimon when he mentioned the prospect of 7% interest rates while talking at the JPMorgan investor summit in Mumbai, India spooked both stocks and bond markets last week (and apparently this week so far too). He characterized his comments as a worst case scenario if inflation keeps going up. Nonetheless, the worry over even higher rates is real, as demonstrated by the higher treasury yields. But the Fed still thinks only one more rate hike at the moment. And then they expect to begin cutting rates in 2024 and continuing to cut in 2025. The weekend agreement by Congress on a short-term budget extension (until November 17) to fund the government, averted a feared shutdown. But it was not a long-term solution. And by kicking the can down the road, they will be right back in the same position in roughly 45 days. Let's hope they use this time wisely and get this figured out without waiting until the last minute again, as is all too common. The market doesn't need the unnecessary drama. In other news, yesterday's PMI Manufacturing report rose to 49.8 vs. last month's 48.9. The ISM Manufacturing Index rose as well, coming in at 49.0 vs. last month's 47.6 and views for 47.8. And Construction Spending was up 0.5% m/m, in line with the consensus. On a y/y rate it was up 7.4% vs. last month's pace of 5.6%. Today we'll get the Job Openings and Labor Turnover Survey report (or JOLTS for short). But the jobs report everybody is really waiting for is Friday's Employment Situation report. Last month's report showed more jobs were created than expected, but that job growth cooled from its record setting pace, while hourly wage growth rose less than expected. Robust job growth is wanted, but not rip-roaring job growth as that signals the increase in interest rates is not having as much of an effect at slowing the economy down (and thus inflation) as expected. So a solid number should be cheered on Friday, but not a blowout one. Monday's market performance put in a less than auspicious start to Q4. But it was good enough. And that doesn't change the odds of a Q4 rally. That's because history shows if the market is up more than 10% thru July (which it was), and August is down (which it also was), the remainder of the year is up 100% of the time with an average gain of 9.9% (median of 8.7%). So if the market is going to match its historical average (or median) listed above, it will need to climb roughly 5% just to get back to where it was at the end of August. And then add another nearly 9% to 10% on top of that. If so, that suggests a big rally in Q4. See you tomorrow, [Kevin Matras - Signature] Kevin Matras Executive Vice President, Zacks Investment Research [Oil Surge Predicted...But Are You Ready?]( Do you own oil and gas stocks? Or are you thinking about buying some? If so, you need to see my #1 oil play for 2023. But it's NOT oil stocks, futures, or anything you've likely heard about. Rather, it's an unusual way to potentially bank monthly income from the oil and gas markets. [Learn More Here]( Most Popular Articles from Zacks.com [4 Solid Stocks to Buy on Jump in Personal Income, Spending]( Sky-high prices have been a major concern for more than a year now but that hasn't stopped consumers from spending. [Read More »]( [3 Catalysts for October to Regain Momentum: Top 5 Picks]( We have identified three factors that are likely to help Wall Street to regain its mojo. [Read More »]( [3 Medical Product Stocks With Solid Dividend Yield: ABT & Others]( With rising market volatility, investors should consider these dividend-paying companies. [Read More »]( [5 Reasons Bitcoin Will Rally into Year-End and Beyond]( Stock Strategist Andrew Rocco covers why Bitcoin and Bitcoin proxies look to be strong investments into year-end and beyond. [Read More »]( [A Nonfarm Payroll Week: Global Week Ahead]( In the Global Week Ahead, thankfully, there won't be a federal government shutdown, led by the U.S House of Representatives. [Read More »]( [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. [See Stocks Free »]( [Bull of the Day: AppLovin Corporation (APP)]( AppLovin's earnings outlook keeps improving and clients are gravitating toward its new AI-enhanced offerings. [Read More »]( [New Zacks Strong Buys for October 3rd]( Here are 5 stocks added to the Zacks Rank #1 (Strong Buy) List today. [Read More »]( More Zacks Resources Mobile App Download our app for convenient on-the-go access to even more—daily and weekly newsletters published by Zacks experts, proprietary research and tools, and Portfolio Tracker on Zacks.com. [Download our Zacks App for Apple iOS]( [Download our Zacks App for Android]( Zacks Members' Success Stories Visit [Success Stories]( to hear how Zacks research, tools and portfolios help our members outperform the market. Get all of our market insights and much more when you connect with us. [Visit Zacks on Facebook]( [Follow Zacks on Twitter]( [See Zacks videos on YouTube]( [Join Zacks on LinkedIn]( [Read Zacks Commentary on StockTwits]( This free resource is being sent by [Zacks.com](. We look for investment resources and inform you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms of Service". [www.zacks.com/terms_of_service]( Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research is not a licensed securities dealer, broker or US investment adviser or investment bank. The Zacks #1 Rank Performance covers the period beginning on January 1, 1988 through September 4, 2023. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank #1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit [( for information about the performance numbers displayed above. Zacks Emails If you would prefer to not receive future profit-producing emails from [Zacks.com]( the primary purpose of which is the commercial advertisement or promotion of a commercial product or service, then please [click here]( and confirm your request. If you have trouble with the unsubscribe link, please email support@zacks.com. Zacks Investment Research 10 S. Riverside Plaza, Suite 1600 Chicago, IL 60606