Stocks End Lower To Start The Week, Earnings On Tap, Fed Chair Powell Speaks To Congress Image: Bigstock Stocks closed modestly lower yesterday after a heady week last week. After 5 up weeks in a row for the S&P, and 8 up weeks in a row for the Nasdaq, some profit taking was bound to set in. And that's likely what we saw yesterday. Traders have a pretty good lay of the land at the moment. Last week's FOMC announcement is now behind us. And we now know there's the potential for two more 25 basis point rate hikes on the horizon (if inflation doesn't start dropping faster). We also know the Fed has upped their outlook for full-year GDP, which makes the prospect for a recession this year even more remote. The jobs market remains strong. And personal incomes remain near record highs. We recently saw Q1 earnings, by and large, beat expectations. And we'll soon see how Q2 shaped up with earnings season just around the corner. While it doesn't officially begin until July 19, when Alcoa reports after the close (they have long been considered the official start of earnings season), it has unofficially already begun. Between today and the rest of the week, we'll get 295 companies set to report. And that number will grow in the coming weeks. In other news, yesterday's Housing Starts and Permits report showed Starts at 1.631 million units (annualized) vs. last month's 1.340M and views for 1.400M. Permits came in at 1.491M vs. last month's 1.417M and estimates for 1.433M. Today we'll get MBA Mortgage Applications. And we'll also hear from Fed Chair, Jerome Powell, as he gives his semiannual Monetary Report to Congress. Today will be to the U.S. House Financial Services Committee. He'll do it again tomorrow to the U.S. Senate Committee on Banking, Housing, and Urban Affairs. No new ground is expected to be broken. But you never know, as he is likely to be grilled by Congress after his prepared remarks. The markets are off to a great start this year. It's still skewed towards big-tech as evidenced by the outsized gains in the S&P 500, and even bigger gains in the Nasdaq. But all asset styles and classes have recently come alive. YTD, the Dow is up 2.74%, the S&P 500 is up 14.3%, the Nasdaq is up a whopping 30.6%, the small-cap Russell 2000 is up 5.99%, and the mid-cap S&P 400 is up 5.39%. And I'm expecting the gains to continue throughout the rest of the year. So make sure you're taking full advantage of it. See you tomorrow, Kevin Matras Executive Vice President, Zacks Investment Research |
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