Stocks Closed Lower, Rising Interest Rates And The Strength Of The Economy Remain In Focus  Image: Shutterstock Stocks closed lower yesterday after trading on both sides of the market early on. In spite of last Friday's better than expected Employment Situation report, stocks struggled. Although, there was little uncertainty surrounding yields as the 10-year Treasury was up 0.1470 or 4.60% at 3.340. The Fed's next FOMC meeting is September 20-21. They are widely anticipated to raise rates by another 75 basis points. That would put the Fed Funds rate at a midpoint of 3.13%. They had previously floated that they expect to see the Fed Funds rate between 3-3.5% by year's end. And recently, some voting members have suggested we could see more than 4% by early next year. In other news, the PMI Composite report dipped a bit with the Composite Index coming in at 44.6 vs. last month's 45.0 and views for 45.3. The Services Index slipped as well to 43.7 from last month's 44.1 and views for 44.5. The ISM Services Index, however, saw their index rise to at 56.9 vs. last month's 56.7 and the consensus for 55.4. Today we'll get another look at the economy with MBA Mortgage Applications, International Trade in Goods and Services, and the Beige Book report. We'll also hear from Federal Reserve Bank of Richmond President, Thomas Barkin; Cleveland Federal Reserve President, Loretta Mester (who recently said she expects rates to get over 4% soon); Fed Vice Chair, Michael Barr; and Vice Chair of the Board of Governors of the Federal Reserve, Lael Brainard. With so much focus on interest rates, you can be sure traders will be listening to what each of them has to say. In the meantime, we'll see if stocks can consolidate recent price action, and try and stage a rally. Stocks are up from their mid-June lows. But their gains were more than cut in half over the last 3 weeks. But with a strong jobs market, strong consumer spending, and strong corporate earnings, not to mention a strong outlook for the second half of this year with Q3 GDP expected to come in at a robust 2.6% (well above Q2's -0.6%), the ingredients are there to make another push higher. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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