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Kevin Matras   
Profit from the Pros
By Kevin Matras
Executive Vice President
Zacks Investment Research
  

Rise In Virus Cases Weigh On Stocks, But Big Earnings Week Could Provide Lift

Stocks closed lower yesterday across the board.

Continued uncertainty over stimulus remains.

So does the uncertainty over next week's election.

But the growing number of coronavirus cases around the world, most notably in Europe where new shutdown measures are being considered, seemed to be the biggest weight on stocks.

Even though the World Health Organization the other week came out against large lockdowns as doing more harm than good, targeted lockdowns are being talked about as alternatives. But nobody yet knows what that would look like and who would be affected. Whatever it looks like, it will be a setback to the EU's economic rebound.

And with cases on the rise in the states, traders are wondering what that could mean for the U.S.

Gladly, we are in a much better position now than when the virus first hit. The medical community knows far more about it than before. There's less fear of running out of supplies and resources. There are promising therapeutics in development, with some already available and in use. And a vaccine(s) could be ready by year's end.

Nonetheless, the rise in cases is an unfortunate development.

Given that, amongst other things, volatility is likely to stick around for a while.

On the plus side, a stimulus announcement could be good news for the market.

And this week is expected to be a busy earnings week. Since stocks usually go up during earnings season, that's a big potential plus. Especially since this earnings season is off to a strong start.

We also have a full slate of economic reports on deck. And the economic reports have so far been a positive for the market.

Today we'll get Durable Goods Orders, retail sales via the Redbook report, the Case-Shiller House Price Index, Consumer Confidence, and the Richmond Fed Manufacturing Index.

In the meantime, the economy continues to improve.

And as long as it does, that should be good news for stocks.

See you tomorrow,

Kevin Matras

Executive Vice President, Zacks Investment Research

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