Stocks Down On Chairman Powell's Comments, Nasdaq Winning Streak Ends At 9 Days

Market Moves You Need to See Stocks Down On Chairman Powell's Comments, Nasdaq Winning Streak Ends At 9 Days [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks Down On Chairman Powell's Comments, Nasdaq Winning Streak Ends At 9 Days [Stocks Down On Chairman Powell's Comments, Nasdaq Winning Streak Ends At 9 Days]Image: Bigstock Stocks closed lower yesterday with all of the major indexes in the red. The Dow ended their 7-day winning streak on Wednesday. The S&P and Nasdaq ended their winning streaks (8 days and 9 days respectively), yesterday. The day started off well. Then the indexes dipped mid-morning. And then recovered with the S&P and Nasdaq trading solidly in the green. But then Fed Chair Jerome Powell, during a speech yesterday, said that he was "not confident" the Fed has done enough to bring inflation down. Specifically, he said, "The Federal Open Market Committee is committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2 percent over time; we are not confident that we have achieved such a stance." That was enough to turn stocks around and head lower. Quite frankly, after a sharp rally over the last week and a half that left several gaps on the charts, the markets were ripe for a bit of backfilling and profit taking. And that's likely what we are seeing. His comments haven't changed any fundamentals. And his concerns over the Fed possibly not having done enough is not a new revelation as he has expressed those concerns repeatedly for many months. The market used those comments as the perfect excuse to bank some profits and pull back a bit. That is what this appears to be. In other news, yesterday's Weekly Jobless Claims fell by -3,000 to 217K vs. the consensus for 220K. The 4-week moving average rose slightly to 212.25K. And we got plenty of earnings. But earnings season is now winding down. We'll get just 85 companies on deck to report today. And next week, we'll get less than half as many companies set to report vs. this week. It's been an excellent earnings season. And the forecast for the next few earnings seasons looks even better. Sales and earnings estimates for the S&P for Q4 of this year is expected to show sales up 2.0% with earnings up 2.0% as well. Q1 of 2024 is expected to show sales up 4.1% with earnings up 5.0%. And Q2 is expecting sales to be up 10.7% with earnings up 4.5%. Pretty solid. As for economic reports today, the only thing on the docket is the Consumer Sentiment report. We'll also hear from the CEO of the Federal Reserve Bank of Dallas, Lorie Logan. And the President of the Federal Reserve Bank of Atlanta, Raphael Bostic. After Mr. Powell's comments moved the market yesterday, you can be sure people will be listening closely to what each of them have to say. Granted, they don't carry the same weight as the Chairman. But they are part of the policymaking team. So what they say is important. After a +5% gain over the last week and a half (more than 7% for the Nasdaq), and less than a -1% pullback yesterday, the Q4 rally is still intact. And with high expectations for a year-end rally, every pullback is a better opportunity to get positioned in the market. Best, [Kevin Matras - Signature] Kevin Matras Executive Vice President, Zacks Investment Research [Download The Buffett Playbook Today]( You're invited to access Zacks' just-updated The Buffett Playbook Special Report. The report reveals 5 undervalued stocks that fit Buffett's investing criteria. All 5 have triple-digit profit potential in the long-term – and they're all poised to start climbing fast. Previous editions of this report pointed readers to potential gains up to +232%...+351%... and +427%. Our new Buffett stocks could rival these gains. 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