Stocks End Mixed, Earnings And Inflation On Tap For This Week  Image: Shutterstock Stocks closed mostly lower yesterday with only the Nasdaq finishing in the green. All of the major indexes opened sharply lower and quickly put in their intraday lows. But by late morning, all of the indexes were in positive territory, and they added to their gains in the afternoon. But those gains were short-lived, and by the close, most had given all of their gains back. Gladly, the yield on the 10-Year Treasury was down as well. But was not enough to underpin stocks.
Continuing unease over the Ukraine/Russia, and Israel/Hamas wars have also made investors uneasy. In other news, yesterday's Chicago National Activity Index increased to 0.02 vs. last month's -0.22, although missing views for 0.05. Today we'll get the PMI Composite report, and the Richmond Fed Manufacturing Index. Earnings season kicks into gear this week. Today we'll hear from Coca-Cola and General Electric (before the open), and Microsoft, Alphabet and Visa (after the close) to name a handful. We'll have a busy week of economic reports and earnings.
But the main event this week will be Friday's Personal Consumption Expenditures (PCE) index. That's the Fed's preferred inflation gauge. So all eyes will be on that. That will be the last piece of inflation data the Fed gets before their FOMC announcement on Wednesday, November 1. The Fed is widely expected to leave rates unchanged. Fed Chair, Jerome Powell, and several of his colleagues have hinted that rising yields, especially on the long bond, may preclude them from having to raise rates any further. They have another meeting in December, so even if they continue their pause in November, we'll still have December to contend with. But if they indicate that they may be done with their rate hike cycle, that should be interpreted as bullish. It's been a rough few months. Markedly different than the first 7 months of this year. But the S&P is still up 9.83% YTD, while the Nasdaq is up 24.4%. Earnings season is off to an excellent start, even though it's been largely ignored so far. Hopefully people will start paying attention. And the statistical trend favors the bulls with a high probability of a Q4 rally. There's still plenty of earnings season left (in fact, it's really just begun), and more than 2/3rds of Q4 is left as well. So there's plenty of time to see the market turn around. But the sooner the better. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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