Stocks End Higher Again, All Eyes On The Fed Today  Image: Bigstock Stocks closed higher yesterday with the Nasdaq taking the lead. Two tech giants reported earnings after the close. Alphabet posted a positive EPS surprise of 9.09%, and a positive sales surprise of 3.03%. That equates to quarterly gain in EPS growth of 19% vs. this time last year, and an 8% gain in sales growth. Shares were up by more than 7.50% in after-hours trade. Microsoft reported a positive EPS surprise of 5.91%, and a positive sales surprise of 1.50%. That marks a 20.6% increase in earnings vs. this time last year, and an 8.32% gain in sales. But with quarterly guidance coming in below expectations, shares were down by -3.50% after-hours. We'll get more earnings today with another 285 companies on deck. The biggest names reporting today are Coca-Cola, Union Pacific, and Boeing (all before the open), and Meta (after the close). In other news, the Case-Shiller Home Price Index was up 1.5% m/m (unadjusted). On a y/y basis it was down -1.7% vs. the consensus for -2.5%. The Richmond Fed Manufacturing Index came in at -9 vs. last month's -8 and views for the same. And Consumer Confidence rose to 117.0 vs. last month's upwardly revised 110.1, and the consensus for 111.8. Today we'll get MBA Mortgage Applications, New Home Sales, the Survey of Business Uncertainty, and the State Street Investor Confidence Index. But the main event will be the FOMC Announcement, and then the Fed Chair Press Conference. Today the Fed is widely expected to raise interest rates another 25 basis points, after pausing at June's meeting. If they do raise by another quarter point, that will put the Fed Funds rate at between 5.25-5.50% (midpoint at 5.38%). But it's the press conference by Fed Chair, Jerome Powell, that everybody will be listening to. While today's rate hike (barring a massive surprise), is a foregone conclusion, what people really want to know is what the Fed's intentions are afterwards. At the June meeting, they hinted that the terminal rate could get to 5.60%. That essentially signaled 2 more rate hikes. But since then, inflation has slowed more than expected. It's still too high. But declining at a faster pace. So one more hike (likely today), was a given. But there are plenty who believe the need for another 25 basis points after this is unwarranted. The announcement comes out at 2:00 PM ET. The press conference is at 2:30 PM ET. But it's possible the Fed might be a bit more ambiguous on what happens next, especially with the Personal Consumption Expenditures (PCE) index (the Fed's preferred inflation gauge), coming out on Friday. Since that inflation reading has been showing a slower decline, and doesn't always move in lockstep with the CPI or PPI index, you can bet everybody will be watching that report to pick up any clues as to what comes next. In the meantime, stocks continue to melt up as the recession talk for this year has faded, and the prospects for a soft landing in the U.S. are looking better and better. It's also worth noting that the global economy just got an 'upgrade.' Yesterday, the International Monetary Fund (IMF), raised their 2023 forecast for the global economy to 3.0% from 2.8%. And maintained their 2024 forecast at 3.0%. The markets have been responding accordingly. And it looks like there's a lot more upside to go. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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