Stocks closed mostly higher yesterday, led by the Nasdaq with a gain of 0.71%, and making a new all-time high in the process. I should note that the small-cap Russell 2000 also made a new all-time high as well.

The continuation of the bull market is on full display across every index.

But it should come as no surprise given the tamer inflation reports, the resiliency of the economy, the better-than-expected earnings (not to mention the positive EPS growth outlook for the next four quarters), the recent interest rate cut (and the two additional cuts expected in mid-October and then again in December), and of course, the ongoing AI boom.

Couple that with Q4 being the best quarter for stocks, and it looks like the market has a lot more upside to go.

The government shutdown enters its 7th day today.

Since 1980, there have been 14 government shutdowns (10 if you exclude technical shutdowns, i.e., procedural delays, etc., that lasted less than 24 hours). The average length of those shutdowns is 9 days. The longest one was in 2018/2019 and lasted 35 days. 1995/96 was next at 21 days. And 2013 was third at 16 days. Other than that, they've usually lasted about 2-3 days.

During those shutdowns, the S&P averaged a gain of 1.69%. And a full 9 of those 10 times was higher. Only decline was in October 1990, when it lost -3.60%. The government shut down for only 3 days. But recession fears had gripped the market prior to that, and stocks had been falling for months before.

Not much in the way of economic reports out yesterday.

Today we were supposed to get the International Trade in Goods report, and Consumer Credit. But the trade report is produced by the Bureau of Economic Analysis, which is a government agency, and therefore will be delayed given the government shutdown. Consumer Credit, however, is produced by the Fed. But since the Fed is not affected by the shutdown, it is expected to be released.

The market will also be waiting for an announcement by Tesla today. They teased an announcement on social media on Sunday, posting a 10/7 date. And the media has picked it up since then. There's no confirmation on what it'll be about. But there's speculation it could be about the Model Y, which is expected to be more affordable. If so, it would be a timely announcement given the EV tax credits of $7,500 have now expired, and were considered one of the key drivers to Tesla's record-setting deliveries last quarter as consumers raced to make their purchases before the tax incentives went away. Tesla shares were up 5.45% yesterday.

In other news, the market was also lifted by reports that OpenAI is entering into a semiconductor purchase deal with Advanced Micro Devices that's expected to be worth tens of billions of dollars for the chip maker. Additionally, it gives OpenAI the option to take a 10% stake in the company. AMD soared by more than 23% yesterday.

Earnings season is just around the corner. It officially begins on October 22^nd when Alcoa reports after the close. But it unofficially begins next week when big banks (and others) start reporting.

Earnings season is always an exciting time since stocks typically go up during earnings season. And given the forecast for another strong earnings season, I'm expecting another positive performance from the market.

See you tomorrow,