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Plus 5 New Strong Buys for Today
Kevin Matras   
Profit from the Pros
By Kevin Matras
Executive Vice President
Zacks Investment Research

Stocks Soar To Kick Off Q4

Stocks soared yesterday with all of the major indexes up by nearly 2.5% or more.

With yesterday's sharp rally, the count begins for a follow-through day to signal a new uptrend could be starting. The strongest follow-through days (a rally of 1% or more on increased volume), usually come between days 4 and 7. That doesn't mean we can't go higher today or tomorrow. Nor does it mean we can't go lower either. But, ideally, we should be looking for something substantial on the upside later this week or early next week. In the meantime, in order for the follow-through day count to remain intact, the market should not take out day 1's lows.

In other news, yesterday's PMI Manufacturing report came in at 52.0, slipping from last month's 52.8, but beating the consensus for 51.8.

The ISM Manufacturing Index also slipped from last month coming in 50.9 vs. 52.8 and views for 52.4.

Construction Spending was down as well, dipping -0.7% m/m vs. last month's -0.6% and estimates for -0.1%. On a y/y basis, it was up a solid 8.5%. That's down from last month's upwardly revised pace of 9.5%. But it's a solid report nonetheless.

It's also worth noting that the Federal Reserve Bank of Atlanta recently increased their estimates for Q3 GDP via their GDP Now forecast. For the last couple of weeks it had been at 0.3%. But on Friday, September 30, it was upgraded to 2.4% based on upward revisions to personal consumption expenditures, and gross private domestic investment. On Monday, that was lowered a tad to 2.3% based on the just reported dips in manufacturing and construction spending. But, no matter how you slice it, the jump from 0.3% to 2.3% is a sharp increase, and a bullish turn for Q3 GDP expectations.

Today we'll get another look at the economy with the Factory Orders report, and the JOLTS (Job Openings and Labor Turnover Survey) report.

After a rough 3 quarters, Q4 is off to an auspicious start.

Let's hope this continues. Q4 is typically the best quarter of the year for stocks. And it being a midterm year (Q4 is typically up in midterm years), the odds are even better.

Moreover, with Q1 (following a midterm year), historically being even stronger than Q4, we could be looking at an even bigger and longer run up.

And when we factor in that the third year of the presidential cycle (that's what 2023 will be), has historically seen the best performance of all four years, the outlook for stocks looks even stronger.

In the meantime, we'll take it one day at a time.

Great day yesterday.

Let's see how today does.

See you tomorrow,

Kevin Matras

Executive Vice President, Zacks Investment Research


New Battery Tech to "Eat Lithium's Lunch"?


The lithium-ion battery transformed Tesla from the laughingstock of the auto industry into the biggest car company in history.

But according to Bloomberg...

This new battery technology "could eat lithium's lunch."

Because it can store energy up to 94% cheaper than a Tesla lithium-ion battery.

It's a "totally new approach to battery technology," says the U.S. Department of Energy.

Powermag calls it a "trillion-dollar holy grail."

And that's just the beginning...

Because according to Forbes, a $130 trillion energy revolution is coming.

To get in on the ground floor of this opportunity...

Former Goldman Sachs executive Nomi Prins is recommending this tiny $4 company that's backed by billionaires Bill Gates, Jack Ma, Richard Branson, Michael Bloomberg, & Jeff Bezos.

Click here for the full story. >>

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