Stocks End Mixed After Mr. Powell's Second Day Of Testimony On Interest Rates  Image: Bigstock Stocks closed mixed yesterday with the Dow ending modestly lower while the S&P and Nasdaq ended modestly higher. But all of the indexes finished well off their lows. Fed Chair, Jerome Powell, in his semiannual testimony to the U.S. House Financial Services Committee yesterday, echoed the same testimony he gave the day before to the U.S. Senate. Essentially, due to the latest stronger than expected economic data, the ultimate level of interest rates is likely to be higher than previously anticipated. This time, he reiterated that the Fed will be "looking at the totality of the data," and that the Fed has not yet made a decision on rates, and that they are not on a preset course. Nonetheless, the same takeaways from Tuesday's testimony, and seconded yesterday, stand: 1) they may have to raise rates higher than they previously anticipated, and 2) they may have to raise rates faster than expected as well. Up until Tuesday, the Fed had been hinting that the terminal rate was likely to hit 5.1%, and stay there for awhile.
But now speculation is that it could get to a range of 5.25%-5.50% (midpoint of 5.38%). We'll have to wait until March 22 (the Fed's next FOMC announcement), before we know what they're thinking. In other news, yesterday's MBA Mortgage Applications were up 7.4% w/w, with purchases up 6.6%, and refi's up 9.4%. The Beige Book was a mixed bag (6 of 12 districts reported little to no growth, while the other 6 showed modest growth), consumer spending was steady, and inflation was still high, but continued to moderate. The Job Openings and Labor Turnover Survey report (or JOLTS for short), showed there were 10.824 million job openings for January, which was lower than last month's report of 11.234M, but higher than the consensus for 10.6M. And the ADP Employment Report showed there were 242,000 new private payroll jobs created in February vs. views for 200K and January's 119K. But the jobs numbers report the market is really waiting on is Friday's Employment Situation report. The consensus for Friday is for 220K new jobs (213K from the private sector and 7K from the public), while the unemployment rate remains steady at 3.4%. But today we'll first have to get through the Weekly Jobless Claims report, and the Challenger Job-Cut Report. Stocks remain mostly higher for the year with the S&P up 3.97%, and the Nasdaq up 10.6%. The Dow, however, is down -1.05%. But since last year's October lows, the Dow is up 14.2%, the S&P is up 11.6%, and the Nasdaq is up 13.3%. And there are thousands of stocks doing even better. Many still look undervalued. And there are few things better than picking up undervalued gems right before they explode higher. It's even more exciting when they're cheap in price too. I know some people get spooked when they see a low-priced stock. Just like some people get spooked when they see a high stock price. But the price of a stock tells you nothing about its valuation. Nonetheless, there's no denying the attraction of lower-priced stocks. Especially when you get in at just the right time and watch it soar. I love finding low-priced picks just as much as the next person. And if you like finding them too, make sure you read our latest commentary... 3 Keys to Undervalued Stocks with Big Upside Potential Best,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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