Stocks Up, Poised To Close Higher For The Week
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Stocks closed higher again yesterday, and are on pace to close higher for the week with just one more trading day to go.
Follow-through buying after Wednesday's bullishly interpreted FOMC minutes lifted stocks again.
The report confirmed the Fed's stance on raising interest rates by 50 basis points at the upcoming June and July meetings, and to begin their balance sheet reduction on June 1st.
None of this was new news. Nonetheless, it was well received.
The market also cheered the Fed's comments on the economy which acknowledged the strength in household spending, business investment, industrial production, and the labor market in Q1. And that they expected a strong Q2, and anticipated GDP to 'advance at a solid pace over the remainder of the year.'
That's in alignment with St. Louis Fed President, James Bullard, who last week said that he does not see a recession this year or next, and sees the economy growing by 2.5% to 3% this year, driven by strong consumption.
In other news, Weekly Jobless Claims fell by -8,000 to 210K.
Corporate Profits showed a 15.7% y/y increase (9.5% with Inventory and Consumption adjustments).
The Kansas City Fed Manufacturing Index came in at 23 vs. last month's 25.
And the Pending Home Sales Index slipped -3.9% m/m as higher interest rates slowed sales.
Today we'll get a look at the International Trade in Goods report, Personal Income and Outlays, Retail and Wholesale Inventories, and Consumer Sentiment.
After 7 down weeks in a row for the S&P and Nasdaq (8 in a row for the Dow), the markets are long overdue for a positive weekly finish.
And hopefully, with stocks so grossly oversold, this can be the beginning of an upside winning streak.
Note, the markets will be closed on Monday for Memorial Day.
But trading will resume as normal on Tuesday.
In the meantime, have a great, 3-day long Memorial Day weekend.
See you on Tuesday,
Kevin Matras
Executive Vice President, Zacks Investment Research
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