Stocks Closed Higher Yesterday, Market Can Now Put The Midterms Behind It  Image: Bigstock Stocks closed higher again yesterday. Yesterday was election day. The outcomes of several races are still to be decided. But, whether your favored party won yesterday or lost, the market has historically celebrated after midterms regardless. The 4-year Presidential Cycle shows that Q4 of year 2 (midterm year, which is now), is the second strongest quarter of all 16 quarters, with Q1 of year 3, being the strongest quarter. Moreover, year 3 (that's 2023), of the 4-year Presidential Cycle is the best year of all 4 years. So we are literally at the beginning of one of the best times for stocks. In fact, since 1950, stocks have always gone up in the year after midterms. And the average 12-month forward returns are 18.6%. And that's pretty exciting. In other news yesterday, the NFIB Small Business Optimism Index, which has been steadily improving, slipped to 91.3 from 92.1 and views for 91.8. But that's still a solid number. Today we'll get MBA Mortgage Applications, and Wholesale Inventories. We'll also hear from Richmond Federal Reserve Bank President, Thomas Barkin, as he speaks on the economic outlook at the Top of Virginia Economic Summit. Nobody is expecting any breaking news. But there's a keen interest in what Fed members are saying nowadays. So that will be watched. And, of course, earnings season continues with another 527 companies on deck to report today (1,237 in total between today and the end of the week). In the meantime, with midterms over, we are at the beginning of one of the best times for stocks right now. That doesn't mean stocks have to go straight up. But seasonally speaking, the next 6-18 months could be very profitable. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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