Stocks Soar Once Again, Nasdaq On Pace For Fourth Up Week In A Row  Image: Bigstock Stocks closed higher again yesterday. The Nasdaq led the way with a 1.51% gain, followed by the S&P's 0.94%. And both made new 2023 highs. Before the open yesterday, Walmart reported better than expected earnings posting a positive EPS surprise of 11.36% and a positive sales surprise of 1.67%. That put quarterly earnings up 13.1% vs. this time last year, and sales up 7.6%. They also raised guidance on both the top and bottom lines. They were up 1.30% in yesterday's trading. That comes on the heels of Wednesday's better than expected earnings from Target. The market also got a boost yesterday from optimism over a debt ceiling deal. No new news per se', but with both parties expressing optimism that a default would be avoided, and the House saying they could vote on a deal as early as next week, stocks got a lift. In other news, Weekly Jobless Claims fell by -22,000 to 242K vs. views for 255K. Existing Home Sales came in at 4.28 million units (annually) vs. last month's 4.43M and the consensus for 4.295M. Month over month, that's down -3.4%. And year over year, that's down -23.2%. The Philadelphia Fed Manufacturing Index improved to -10.4 vs. last month's -31.3 and views for -20.0. The Leading Indicators report came in as expected at -0.6% m/m. And E-Commerce Retail Sales gained 3.0% on a q/q basis. Today, the only report on the docket will be the Quarterly Services Survey. We'll also hear from Fed Chair, Jerome Powell, as he participates in a panel on 'Perspectives on Monetary Policy,' before the Thomas Laubach Research Conference hosted by the Federal Reserve. It's highly unlikely he'll break any news. Nonetheless, given the importance of inflation and interest rates, his comments will definitely be listened to. And, of course, we'll get more earnings. But only 116 companies are on deck to report today. With one more trading day to go, stocks are on pace to close higher for the week. If so, that will make it four up weeks in a row for the Nasdaq. Since last year's bear market low close, the Nasdaq is up 24.2%. As you know, they actually exited their bear market last week when they crossed that 20% threshold. They are now up 3.52% in their new bull market. While the Nasdaq has been leading this rally, the S&P isn't doing so bad either. They are up 17.36% since last year's low close. And 9.34% YTD.
As I mentioned previously, with inflation on the decline, the Fed likely on pause with interest rates, personal incomes hovering near all-time highs, and the economy, while slowing, continuing to grow, that's good news for the market. Add in the favorable statistical trends of 1) the 4-year Presidential Cycle which shows that year 3 (that's 2023), is the best year of all 4 years (since 1950, stocks have always gone up in the year after midterms, with an average 12-month forward return of 18.6%), and 2) over the last 60 years, if a bear market in the S&P goes down by -25% or more (the S&P was down by -25.4% last year between their bull market high close and their bear market low close), stocks go up on average of 38% a year later (and those stats encompass 9 bear markets with 8 of those seeing stocks up the next year).
Short-term debt ceiling volatility notwithstanding, it looks like there could be a lot more upside to go. Best,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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