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Earnings Season Off To A Strong Start, S&P And Nasdaq Up For 3rd Week In A Row

Stocks finished solidly higher on Friday, while the S&P and the Nasdaq closed higher for the week for the third week in a row. (The Dow just missed out by a fraction of a percent (-0.04%) as Boeing's woes held the index back.) But all of the major indexes, including the Dow, are now within just a couple percent of their all-time highs.

Traders and investors should stop and think about that for just a moment.

Back in December when people were panicking that the world was coming to an end (not us), that the economy was headed for a recession (not us), and that a bear market was on its way (not us), we see now that was all nonsense (we said that all along), and the markets have rightly regained their footing near their all-time highs, and are within striking distance of breaking out new all-time highs!

The point of this reflection is to remind you to set aside your emotions when investing in the market and let the data tell you what's really going on.

The economy soared last year (GDP was up 2.9%), interests rates remain low, and employment has literally never been better – those are not the hallmarks of a recession or a bear market. They are the hallmarks of a thriving economy and a bull market.

If you got spooked out of the market late last year, I hope you got right back in and caught this amazing rally that brought sanity back into the market. Because this is an historic time, and it looks like there's much, much, much more upside to go.

Earnings season has already unofficially begun with last week's stronger than expected bank earnings.

And earnings season will continue this week, and make it 'official' when Alcoa reports earnings on Wednesday, April 17th, after the close.

As you know, earnings season is typically a good time for stocks. In the last 10 years since this bull market began, stocks have gone up on average of 2% during earnings season. And I'm expecting the same, if not more, this earnings season.

And with stocks trading within 2% of their all-time highs, we could see that breached before earnings season is over.

And let's not forget the anticipated U.S.-China trade deal.

The other week, the WH said they expected a deal within the next 4 weeks. That means there's 3 weeks left according to their assessment. So the market will be watching intently for any news on a deal in the coming weeks.

In the meantime, the economy looks great, and so does the market.

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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