Stocks Closed Higher, All Eyes On This Morning's PPI Inflation Report

Market Moves You Need to See Stocks Closed Higher, All Eyes On This Morning's PPI Inflation Report [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks Closed Higher, All Eyes On This Morning's PPI Inflation Report [Stocks Closed Higher, All Eyes On This Morning's PPI Inflation Report]Image: Bigstock Stocks closed higher again yesterday, this time with the small-cap Russell 2000, and the mid-cap S&P 400 leading the way with gains of 1.14% and 0.95% respectively. Yesterday's NFIB Small Business Optimism Index slipped to 90.8 vs. last month's 91.3 and views for 91.2. And Wholesale Inventories improved with a dip of -0.1%, which was in line with estimates and better than last month's -0.3%. Monday's comments from Lorie Logan (CEO and President of the Federal Reserve Bank of Dallas), and Phillip Jefferson (Vice Chair of the Board of Governors of the Federal Reserve), about rising long bond yields helping the Fed and perhaps giving them less of a reason to tighten further, added to both Monday's and yesterday's gains. Those sentiments were echoed and underscored yesterday by CEO and President of the Federal Reserve Bank of Atlanta, Raphael Bostic, when he said he didn't think we needed to raise rates any further, and that he sees no recession ahead. But the Fed insists it will be data dependent. And today we'll get the Producer Price Index (PPI) inflation report. The headline number is expected to increase 0.3% m/m while the y/y rate ticks up to 1.7% vs. last month's 1.6%. The core rate (ex-food & energy), is expected to be up 0.2% m/m, while the y/y rate declines to 2.1% vs. last month's pace of 2.2%. That's one of three inflation reports we'll get before the Fed's next FOMC announcement on November 1. Tomorrow is number two with the Consumer Price Index (CPI) inflation report. And then two weeks from now, we'll get the third inflation report with the Personal Consumption Expenditures (PCE) index (which is the Fed's preferred inflation gauge), on October 27. At the moment, the odds are at just 30% for a rate hike at the November meeting. Although, that increases to 45% for December's meeting. In addition to today's PPI report, we'll also get MBA Mortgage Applications, and the Atlanta Fed Business Inflation Expectations. We'll also get the FOMC Minutes from September's meeting. In spite of a rough start to Q4, the Dow, S&P, and Nasdaq are back in the green for the quarter so far. There's also plenty of reason to believe that the recent upside should continue. Not the least of which is the beginning of earnings season. Earnings season is always an exciting time since stocks typically go up during earnings season. And, of course, we have the favorable statistical trend, which shows if the market is up more than 10% thru July (which it was), and August is down (which it was), the remainder of the year is up 100% of the time with an average gain of 9.9% (median of 8.7%). Add in the fact that the market has to play a bit of catchup (given September's pullback), if it's going to match the above stats, and we could be in store for an even bigger than usual Q4 rally. See you tomorrow, [Kevin Matras - Signature] Kevin Matras Executive Vice President, Zacks Investment Research [Free Training: Catching the Next Wave of AI Profits]( AI is creating one of the biggest wealth-building opportunities we've ever seen. But not every stock will be successful with AI. In fact, many companies are already setting themselves up for failure. Some stocks will hand investors massive gains. Some will inflict painful losses. 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