Stocks closed mixed yesterday with the Dow up modestly, while the S&P and Nasdaq were down modestly.
But all of the indexes closed near their highs of the day after erasing sharp losses from earlier in the morning.
Yesterday, before the open, AT&T reported a positive EPS surprise of 3.39% (they were up 6.58%); Abbott Labs reported a positive EPS surprise of 14.4% (they were down -1.36%); and CSX reported a positive EPS surprise of 4.26% (they were up 1.29%).
After the close, we heard from Tesla, which reported a record quarterly profit and posted a positive EPS surprise of 9.17%. That's a 59% growth rate from the same quarter a year ago. They were up roughly 2% in after-hours trade.
Today we'll hear from Intel, Visa, Mastercard, Archer Daniels Midland, and Comcast, to name a handful.
In other news, yesterday's MBA Mortgage Applications report was up 7.0% w/w, with purchases up 3.4% and refi's up 14.6%.
The Survey of Business Uncertainty showed businesses leaders expecting a 4.30% sales growth over the next 12 months vs. last month's pace of 4.45%. But expectations for employment growth ticked up to 4.34% vs. last month's 4.28%.
And the State Street Investor Confidence Index rose to 76.5 from last month's upwardly revised 76.0. Asia was up 5.7 points at 92.5. North America was up 0.7 points at 73.1. Europe fell by -0.3 points, but came in at a solid 102.2.
Today we'll get our first look at Q4's GDP. The consensus is calling for 2.7%. We'll also get Weekly Jobless Claims, Durable Goods Orders, the International Trade in Goods report, the Chicago Fed National Activity Index, Retail and Wholesale Inventories, the Kansas City Fed Manufacturing Index, and New Home Sales.
Should be a busy day.
But the report everybody is really waiting for is tomorrow's Personal Consumption Expenditures (PCE) report, which is the Fed's preferred inflation gauge. After better than expected inflation reports via the CPI and PPI reports over the last two weeks, investors are hoping to see the same easing of inflation with the PCE report.
That will be the last inflation report the Fed will see before they announce their rate hike next week on Wednesday, February 1.
The market is widely expecting a 25 basis point hike, which would put the midpoint for the Fed Funds rate at 4.63%. That would leave only 2 more hikes of 25 basis points to get to their projected terminal rate of roughly 5.10%.
But there's been plenty of speculation lately that the Fed might call it quits at 4.75 ? 5.00%. So traders will be listening for any clues as to whether the Fed expects to lower that target, maintain it, or raise it.
In the meantime, January is off to a great start.
Ever since the markets put in their key upside reversal on October 13 last year, stocks have been in an uptrend. They took a light detour at the end of December. But have resumed their uptrend since the beginning of the year.
Even though some are still speculating there could be a recession later in the year, others believe that we could indeed see a soft landing and avoid one altogether.
Either way, there's a growing belief that stocks may have already bottomed regardless.
And investors are wasting no time in getting back into the market.
To read more about this, be sure to check out our latest commentary...
Have Stocks Bottomed?