Stocks End Their 4-Day Winning Streak, But On Pace To Close Higher For The Week

Market Moves You Need to See Stocks End Their 4-Day Winning Streak, But On Pace To Close Higher For The Week [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks End Their 4-Day Winning Streak, But On Pace To Close Higher For The Week [Stocks End Their 4-Day Winning Streak, But On Pace To Close Higher For The Week]Image: Bigstock Stocks closed lower yesterday, ending their 4-day winning streak. But they finished a good amount off their intraday lows. And they are all still up for the week. Yesterday's Consumer Price Index (CPI) inflation report showed headline inflation up 0.4% m/m vs. last month's 0.6% pace and views for 0.3%, while the y/y rate came in at 3.7%, in line with last month, but a bit higher than the consensus for 3.6%. The core rate (ex-food & energy), rose 0.3% m/m vs. last month's 0.3% and views for the same. The y/y rate came in at 4.1%, in line with estimates, but down from last month's 4.3%. All in all, it was a fine report. Between yesterday's CPI and Wednesday's PPI, there was nothing in there that was overly concerning. Inflation is still too high. But it came in largely as expected. And the consensus is still for the Fed to hold off on raising rates in November. Although, the odds are near 50/50 for December. Either way, the Fed is near the end of their rate hike cycle. And it looks they will be cutting rates by -50 basis points next year, and another -100 bps the year after that. And that's bullish for stocks. And the economy. In other news, yesterday's Weekly Jobless Claims were flat at 209,000, unchanged from the week before. The 4-week moving average, however, dipped to 206.25K vs. last week's 209.25K. Today we'll get Import and Export Prices, and Consumer Sentiment. We'll also hear from some of the big banks as Q3 earnings season gets revved up. On deck today are marquee names like JPMorgan Chase, Wells Fargo, BlackRock, Citigroup, and PNC Financial to name a handful. Earnings season is always an exciting time since stocks typically go up during earnings season. For the week, with one more day to go, the Dow is up 0.67%, the S&P is up 0.95%, and the Nasdaq is up 1.06%.If they can keep it together one more day (or expand their lead), that will make it 1 up week in a row for the Dow, but 2 up weeks in a row for the S&P, and 3 up weeks in a row for the Nasdaq. But none of it would be a surprise. Because the odds are high for a Q4 rally. Remember, history 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%). Moreover, if the market is going to match its historical average (or median) listed above, it will need to climb roughly 4% just to get back to where it was at the end of August (given September's pullback). And then add another nearly 9% to 10% on top of that. So we could be at the very beginning of an especially large Q4 rally. Best, [Kevin Matras - Signature] Kevin Matras Executive Vice President, Zacks Investment Research [Buy These Stocks BEFORE They Report Earnings]( [earnings estimate revisions development timeline] Next week, 270 companies are set to report earnings. What if you could know in advance which few would shock Wall Street by beating earnings expectations and pop in price? Now you can. Zacks proprietary "ESP" formula predicts positive earnings surprises with unthinkable 82.19% accuracy. Investors following its picks have seen double-digit gains in as little as 12 days. What stocks is the system picking today? 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