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

Nasdaq Makes New All-Time High

Stocks closed mostly lower yesterday, except for the Nasdaq which jumped 0.87%, making new all-time highs in the process.

The market is still digesting Wednesday's FOMC Announcement.

But in summary, nothing that was said Wednesday was bearish. It was all bullish. And that's why stocks remain at or near their all-time highs.

To recap: the Fed left rates unchanged. And they will likely stay that way for the rest of the year, next year, and a portion of 2023. Don't forget, rates are near zero. And that highly accommodative stance looks to remain in place for quite some time.

They said they have finally begun talking about talking about scaling back their bond purchases. They aren't doing it yet. But said they will continue to monitor the data, and in future meetings, they will start discussing a plan for how and when to taper their bond buying. They said they will give plenty of advance notice before that happens.

Realistically, it's likely we could see the Fed start to taper by or in Q4, or at least make an announcement of such by that time. Meanwhile, they said they will continue to buy $80B a month in Treasuries, and $40B a month in mortgage-backed securities.

They raised the growth outlook from 6.5% to 7.0% for this year. And they have it at 3.3% next year and 2.4% in 2023.

They also raised their inflation forecast from 2.4% to 3.4% for this year, and pegged it at 2.1% next year, and 2.1% again in 2023. But they reiterated their belief that the higher inflation readings are transitory, brought on by supply disruptions due to Covid. And once these bottlenecks ease, inflation should ease along with it.

That's pretty much it in a nutshell: 1) The economy is booming. 2) Inflation is rising, but is transitory. 3) Rates will stay near zero for quite some time.

And that all sounds pretty bullish to me.

In other news, Weekly Jobless Claims ticked up by 37,000 new claims to 412K vs. last week's 375K and the consensus for 360K. Although, the 4-week moving average continued to decline shedding -8,000 new claims at 395K.

The Philadelphia Fed Manufacturing Index came in at 30.7 vs. May's 31.5. But it was still a strong reading, especially considering unfilled orders in May were at a 50-year high, and price indications were at 40-year highs.

Leading Indicators came in as expected, up 1.3%, just like last month, and in line with views for the same.

There is a new $950 billion bipartisan infrastructure bill being proposed. We have not heard from the White House on this latest proposal. But both parties are hopeful to get something passed soon.

FYI – today is Quadruple Witching. That's when stock index futures, stock index options, stock options, and single stock futures all expire today. So there could be some extra volatility.

The economy and the market look strong. And both look poised to soar.

What we are seeing right now is truly history in the making.

And historic times typically usher in historic price moves.

So make sure you're taking full advantage of it.


Kevin Matras

Executive Vice President, Zacks Investment Research


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