Stocks End Higher, Nasdaq And Small-Cap Russell 2000 Turn Positive For The Week  Image: Bigstock Stocks closed higher yesterday with all of the indexes in the green. The Nasdaq and small-cap Russell 2000 led the way with gains of roughly 1.5% for each. Both of those indexes are now up on the week. The S&P and Dow are just a fraction of a percent away from doing the same. Yesterday's Producer Price Index (PPI) report (just like last week's CPI report), showed inflation moderating. The headline number was up 0.2% m/m vs. last month's pace of 0.4% and views for 0.5%. On a y/y basis, it was up 8.0% vs. last month's 8.5% and views for 8.3%. The core rate (ex-food & energy) was flat for the month (0.0%) vs. last month's 0.3% and the consensus for 0.4%. On a y/y basis, it was up 6.7% vs. last month's 7.2% and estimates for the same. Inflation on the consumer level and the producer level continues to tick lower, with many believing that peak inflation from the summer is now behind us. The Empire State Manufacturing Index came in at a better than expected 4.5 vs. last month's -9.1 and the consensus for -7.6. Today we'll get MBA Mortgage Applications, Retail Sales, Import and Export Prices, Industrial Production, Business Inventories, the Housing Market Index, and the Atlanta Fed Business Inflation Expectations. Lots of economic news on tap. The post-midterm effect on the market continues to impress. As a reminder, the 4-year Presidential Cycle shows that Q4 of year 2 (midterm year), 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. Since 1950, stocks have always gone up in the year after midterms. And the average 12-month forward returns are 18.6%. So there's plenty of reason to believe there's a lot more upside to go. We'll get more earnings today with 148 companies on deck to report (444 in total between today and the rest of the week). Earnings season is winding down. But it was another better than expected showing. And stocks responded accordingly. Q4, so far, couldn't be any more different than the first 3 quarters of the year. And that's great news. If the seasonal tendencies hold (and there's plenty of underlying fundamentals to support those seasonal tendencies as well), Q4 could end up being one of the best quarters in a long time. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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