Stocks End Mostly Lower Yesterday, Earnings And Jobs On Tap This Week  Image: Bigstock Stocks closed mostly lower yesterday, except for the Dow which ended modestly higher. Big earnings beats by Pfizer, Caterpillar and Uber before the open yesterday were not enough to lift all the indexes. (Although, CAT's 23.06% positive EPS surprise and subsequent 8.85% gain on the day did help the Dow.) After yesterday's close we heard from Starbucks and Advanced Micro Devices. SBUX posted a positive EPS surprise of 5.26%, but a negative sales surprise of -1.31%. That equates to 19.05% EPS growth vs. this time last year, and 12.55% sales growth. They were down -1.25% in after-hours trade. AMD posted a positive EPS surprise of 1.75%, and a positive sales surprise of 0.67%. That puts earnings down -36.26% vs. this time last year, and -18.17% on sales. They were up by more than 4.00% in after-hours trade. Today we'll get another 474 companies set to report, including Novo Nordisk, Qualcomm, Shopify, PayPal and Humana to name a handful. Then tomorrow we'll hear from mega-caps Apple and Amazon. In other news, yesterday's PMI Manufacturing report came in at 49.0 as expected. The ISM Manufacturing Index improved to 46.4 vs. last month's 46.0, but just missed the consensus for 46.5. Construction Spending rose 0.5% m/m vs. views 0.6%. On a y/y basis it's up 3.5% in comparison to last month's upwardly revised pace of 2.6%. And the Job Openings and Labor Turnover Survey report (of JOLTS for short), came in at 9.582 million job openings vs. last month's 9.616M and estimates for 9.650M. Late yesterday afternoon, Fitch Ratings downgraded the United States' long-term foreign currency issuer default rating from AAA to AA+, citing "a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025." Today we'll get Motor Vehicle Sales, MBA Mortgage Applications, and the ADP Employment Report. But the jobs report everybody is really waiting for is Friday's Employment Situation report by the Bureau of Labor Statistics (BLS). Today's ADP report could provide some foreshadowing as to what Friday's BLS report will show. Although, the ADP report does have a spotty track record when it comes to predicting what the BLS report will show. Nonetheless, the consensus for ADP is 185,000 new private payroll jobs for July. While inflation is driving monetary policy at the moment, their dual mandate also includes the pursuit of maximum employment. The labor market has been incredibly strong, and has withstood this historic rate hike cycle. It's been so strong, even in the face of rising interest rates, that Fed Chair, Jerome Powell, had commented with seeming incredulity that rates have risen to 5% while the unemployment rate is still so low. The red hot labor market has been cheered. Especially when forecasts for recession were being bandied about. But there is such a thing as too much of a good thing. And a more moderate showing would likely be cheered just as well, maybe even more. That's because it would be further proof that the Fed's interest rate hikes are indeed having an impact at slowing the economy, and thus slowing inflation, which in turn could encourage them to pause at the next Fed meeting in September, or end their rate hike cycle altogether. We shall see. In the meantime, we've got plenty of earnings and other economic reports to get thru first. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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