Stocks Mostly Lower While Earnings Impress  Image: Bigstock Stocks closed mostly lower yesterday with only the Dow eking out a small gain. It was day 2 of Fed Chair Jerome Powell's testimony before Congress, this time before the Senate Banking Committee, which saw him reiterate his belief that the current pace of inflation is temporary, and brought on by supply chain issues related to the pandemic. But he continues to believe that it will moderate. However, he did say the Fed will keep monitoring the situation just in case the current elevated pace drags on for longer than expected. Those sentiments were echoed by Treasury Secretary Janet Yellen, who said that she believes there could be "several more months of rapid inflation," but that it will ultimately fall back to normal levels over time, using the words "medium term" to describe it. Although, she too said that we need to keep a careful eye on it. In other news, Weekly Jobless Claims hit a record low since the pandemic began by shedding another -26,000 new claims at 360K. The Empire State Manufacturing Index came in well above expectations at 43.0 vs. the consensus for 18.3. But the Philadelphia Fed Manufacturing Index missed their expectations with a print of 21.9 vs. views for 28.5. We saw more big name banks and financial institutions beat on earnings, which was nice to see. And after the close, we got earnings from Alcoa, which posted both a positive EPS and sales surprise, and raised their outlook on strong demand. Alcoa has long been considered the 'official' start of earnings season because it was once the first Dow component to report earnings. And for what it's worth, Hewlett-Packard has traditionally marked the 'official' end of earnings season because it used to be the last of the Dow components to report earnings. Ironically, both AA and HPQ are no longer part of the Dow Jones Index. But after bookending earnings season for so long, that tradition has stuck. We'll get more earnings today.
And more economic reports with Retail Sales, Business Inventories, and Consumer Sentiment on deck. In the meantime, the economy looks strong. And expectations are for another stellar earnings season. Best,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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