Stocks Up Again With The Dow, S&P and Nasdaq Making New YTD Highs  Image: Bigstock Stocks closed higher again yesterday with the Dow, S&P and Nasdaq all making new YTD highs. Yesterday's news from Microsoft regarding their upcoming release of AI enhanced products called Bing Chat Enterprise, and Microsoft 365 Copilot, shows how the company is beginning to monetize their AI offerings. MSFT soared on the news, climbing by more than 6% at one point, before settling with a gain of 3.98%, while making a new all-time high in the process. But it wasn't just Microsoft or big-tech lifting the indexes. The gains were coming from virtually everywhere. In fact, the small-cap Russell 2000 led the day yesterday with a 1.27% gain. With last week's bullish inflation news, a strong jobs market, a resilient economy, and recession fears postponed until sometime in 2024 (or later?), traders are wasting no time in piling back into stocks. And even though the odds are roughly 98% right now that the Fed raises interest rates by another 25 basis points when they meet next week on July 25-26, there's a growing belief that they will call it quits after that, forgoing an additional 25 bps in September that many have been speculating about. Either way, it looks like we are nearing the end of the rate hike cycle. And that's bullish. In other news, yesterday's Retail Sales report for June was up 0.2% m/m vs. views for 0.5%. Although, that was up from last month's upwardly revised 0.5% increase vs. the previously reported 0.3%. Industrial Production slipped -0.5% m/m vs. the consensus for 0.0%, while Manufacturing Output was down -0.3% vs. a 0.0% consensus as well. Business Inventories rose 0.2% m/m vs. views for the same. And the Housing Market Index increased to 56, in line with estimates, and above last month's print of 55. Today we'll get MBA Mortgage Applications, and the Housing Starts and Permits report. We'll also get more earnings with another 84 companies set to report today, including marquee names like Goldman Sachs (reporting before the open), Tesla, Netflix, IBM, and United Airlines (reporting after the close). We'll get another 141 companies on deck to report between tomorrow and Friday. And then next week, that number expands to 987 companies in queue. Earnings season is always an exciting time since stocks typically go up during earnings season. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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