Stocks End Lower On Friday, Dow And S&P End Higher For The Week

Market Moves You Need to See Stocks End Lower On Friday, Dow And S&P End Higher For The Week [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks End Lower On Friday, Dow And S&P End Higher For The Week [Stocks End Lower On Friday, Dow And S&P End Higher For The Week]Image: Bigstock Stocks closed lower on Friday, and mixed for the week. The Dow was up for the week. So was the S&P, making it 2 up weeks in a row. But the Nasdaq just missed out, finishing down by only -0.18%. Before the bell on Friday, many of the big banks reported better than expected earnings with JPMorgan posting a positive EPS surprise of 11.3% (they were up 1.50% on the day), and Wells Fargo posting a positive EPS surprise of 11.2% (they were up 3.07% on the day). But some other big banks, even though they too posted big EPS surprises, ended down for the day, such as Citigroup, which posted a positive EPS surprise of 20.6%, Blackrock, which reported a positive EPS surprise of 28.8%, and PNC Financial, which posted a positive EPS surprise of 13.2%. Earnings season is already off to a fine start. But last week was dominated by two inflation reports, rising Treasury yields, and another war breaking out. The CPI and PPI inflation reports came in largely as expected. Core wholesale inflation rose slightly last month on a y/y basis, while retail inflation fell slightly y/y. But they both remain well below last year's peak, and the Fed continues to see inflation ticking lower into the end of the year, and next year. Numerous Fed officials have recently expressed their belief that the Fed should hold rates steady at next month's FOMC meeting on November 1. The most recent voice was Philadelphia Fed President, Patrick Harker, who said, "Absent a stark turn in what I see in the data and hear from contacts ... I believe that we are at the point where we can hold rates where they are." Quite frankly, the rising Treasury yields, especially on the long bond, has been doing the Fed's work for them, underscoring the narrative of rates staying higher for longer. But the Fed still expects to cut rates -50 basis points next year, and another -100 basis points in 2025. Rising energy prices, which have been exacerbated by the ongoing war on Ukraine, and the new war between Israel and Hamas, only added to last week's volatility. In spite of all that, there are still plenty of reasons to be bullish on the market, not the least of which are improved earnings outlooks for the next several quarters. You can see this upward trend of improvement in the sales and earnings estimates for the S&P. For example: Q4 of this year is expected to show sales up 3.6% with earnings up 5.3%. Q1 of 2024 is expected to show sales up 4.0% with earnings up 6.7%. And Q2 is expecting sales to be up 11.4% with earnings up 4.9%. And, of course, let's not forget 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%). So, we could be at the very beginning of an especially large Q4 rally. It can be hard to feel optimistic sometimes. Especially when the news is so awful. But keep your eyes on earnings (which are likely headed higher), and where interest rates are headed next year (which are likely going lower), and those two key factors point to higher stock prices. See you tomorrow, [Kevin Matras - Signature] Kevin Matras Executive Vice President, Zacks Investment Research [Earnings "Surprise" Stocks to Buy Today]( [earnings estimate revisions development timeline] Hundreds of companies are scheduled to report earnings in the coming weeks. 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 a matter of days. One of these special stocks is being posted today and you can be among the first to take advantage. Alert: This portfolio full of "surprise" stocks closes to new investors midnight Monday, October 16 - TONIGHT. 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