Back to top

View the PFP Archive

Stocks closed mostly lower yesterday, except for the tech-heavy Nasdaq, which added 0.18%, and making another new all-time high in the process.
Kevin Matras   
Profit from the Pros
By Kevin Matras
Executive Vice President
Zacks Investment Research
  

Stocks Closed Mostly Lower Yesterday, More Inflation Data And Earnings On Deck For Today

Stocks closed mostly lower yesterday, except for the tech-heavy Nasdaq, which added 0.18%, and making another new all-time high in the process. The S&P 500 also made a new intraday all-time high, albeit briefly, before finishing off -0.40%.

News that NVIDIA will soon be able to sell their H20 semiconductor chips in China (which were once forbidden) sent the stock to record highs yesterday, gaining 4.04% on the day. Investors cheered the news, and see it as a win, not just for NVIDIA, but also for the broader AI trade as it underscores the demand for AI.

That sentiment was furthered by Google announcing it will invest $25 billion in AI data centers over the next two years to help power the U.S. electric grid. That was part of a larger $90 billion package the President touted, which is dedicated to AI infrastructure and energy investment.

In other news, yesterday's Consumer Price Index (CPI -- retail inflation) showed the headline number rose 0.3% m/m, up from last month's 0.1%, but in line with expectations. The y/y rate came in at 2.7%, up from last month's 2.4% and views for 2.6%. The core rate (ex-food & energy), was up 0.2% m/m vs. last month's 0.1% and expectations for 0.3%. The y/y rate ticked up to 2.9% vs. last month's 2.8%, but in line with the consensus for 2.9%.

All in all, inflation did tick up. But for context, the core rate at 2.9% remains four-tenths of a percent lower than the 3.3% it was at back in January, and only one-tenth higher than the 2.8% we saw over the last 3 months, which happened to be the lowest reading since March 2021.

We'll get another look at inflation today with the Producer Price Index (PPI ? wholesale inflation). The consensus is for the headline number to tick up 0.2% m/m vs. last month's 0.1%, but the annual rate is expected to ease to 2.5% vs. last month's 2.6%. The core rate is expected to be up 0.2% as well vs. last month's 0.1%, while the y/y rate falls to 2.7% vs. last month's 3.0%. If so, the annual core rate would be at its lowest reading since January 2023.

Before the open yesterday, JPMorgan Chase reported a positive EPS surprise of 9.98%, and a positive sales surprise of 2.52%. Same for Citigroup, which posted a positive EPS surprise of 21.7%, and a positive sales surprise of 3.26%. And Wells Fargo, with a positive EPS and sales surprises of 9.22% and 0.57% respectively. Although, Citigroup was the only one that finished in the green by the close.

Today we'll hear from another 40 companies set to report, including more banks like Bank of America, Morgan Stanley, and Goldman Sachs.

After sharp gains over the last two months, there was bound to be some profit taking.

We could very well see more.

But the outlook for the economy looks bright. And I'll cite Cleveland Federal Reserve President, Beth Hammack, who said that the U.S. economy is "really healthy."

I see the outlook for the market being bright also. With the AI trade alive and well, additional tax cut provisions for corporate America, and expected interest rate cuts in the coming months, it looks like there's a lot more upside to go.

I'm expecting another 20% gain this year. And given the S&P is 'only' up 6.16% YTD, that potentially means another 14% gain from here.

See you tomorrow,

Kevin Matras

Executive Vice President, Zacks Investment Research

Sponsor

Get Your Free Copy of Finding #1 Stocks - A $49.95 Value

Starting today, you can claim a free copy of Finding #1 Stocks by Zacks' EVP Kevin Matras. You don't even have to pay for shipping! Its 300 pages unfold virtually every trading secret he has learned over the last 25 years to beat the market. Here's what's inside:

  • See the exact formulas of strategies that produced gains up to +307.1% in 2024 - more than 11X the market's +27.4%.
  • How to spot bullish set-ups and bearish break-downs to stay ahead of the market…
  • Traits to determine the type of trader you are and finding stocks with highest probability of success…
  • Kevin's personal all-time favorite screening strategy…
  • And much more!

This limited-time offer will end Saturday, July 19 or when our inventory is depleted. Don't miss this unique opportunity.

Get your FREE book now »

Most Popular Articles from Zacks.com

Image: Bigstock

Markets Hit Record Highs, Banks Report Q2 Results: Stocks to Watch

Positive earnings results out of the gate bode well for the remainder of the season. Read More »

Image: Bigstock

European Defense Boom & the Rise of Leveraged Single-Stock ETFs

Director of ETF Research Neena Mishra speaks with Matthew Tuttle, CEO and CIO of Tuttle Capital Management, about the hot market areas, including European defense stocks and leveraged single-stock ETFs. Read More »

Image: Bigstock

Buy Woodward Stock for AI Data Center and Aerospace Upside

Energy conversion and control solutions powerhouse Woodward (WWD) is benefiting from soaring demand for power-hungry artificial intelligence data centers, increased aerospace spending, and beyond. Read More »

Image: Bigstock

3 Medical Stocks to Watch as Q2 Earnings Approach: ABT, JNJ, NVS

The broader market's historic rebound may make it necessary to consider some defensive positions, and medical stocks ABT, JNJ and NVS fit the bill ahead of their Q2 reports. Read More »

Image: Bigstock

Netflix Earnings Loom: Can Momentum Sustain?

Up 90% over the last year, Netflix (NFLX) has outperformed not just the broader market in a big way but each of the Mag 7 members as well. Read More »

Sponsor

Increase Investment Returns with Free Zacks' Portfolio Tracker

Catch breaking news on your stocks and funds at a glance, including timely recommendation changes ... Zacks Ranks ... Industry Ranks ... earnings announcements ... earnings estimate revisions ... and more. And now you can screen for new stocks to improve portfolio performance.

Click for Free Tracker & Screener »

Image: Bigstock

Bull of the Day: Canada Goose (GOOS)

From frozen to flying high, apparel stock GOOS is gaining serious momentum. Read More »

New Zacks Strong Buys for July 16th

Here are 5 stocks added to the Zacks Rank #1 (Strong Buy) List today. Read More »

 

Download our app for convenient on-the-go access to even more—daily and weekly newsletters published by Zacks experts, proprietary research and tools, and Portfolio Tracker on Zacks.com.

Download our Zacks App for Apple iOS
Download our Zacks App for Android

Visit Success Stories to hear how Zacks research, tools and portfolios help our members outperform the market.