Stocks Closed Higher Yesterday, Earnings Season Ramps Up This Week
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Stocks closed mostly higher yesterday with only the Dow missing the mark, albeit barely. But for context, the Dow was the only major index to close higher for the week last week. So, there was bound to be some catching up to do.
The tech-heavy Nasdaq led the gains yesterday with an outsized 1.11%.
Additionally, oil was lower.
And while Treasury yields were up, the 10-year, which closed at 5.14%, is still down from the start of last week's 5.24%, and the high from the week before of 5.35%.
An interesting feat given the hotter-than-expected inflation reports last week.
I'm also leaning towards the idea that the bond market may be finished (or nearly finished) pricing in the expected rate hikes from the Fed. As you know, we got a quarter-point hike in September, and the market is expecting another one in December (before calling it quits). And the spike in yields, and subsequent stock pullback, may have run its course.
In other news, yesterday's Housing Market Index slipped to 29 vs. last month's 32 and views for 31.
Today we'll get the Housing Starts and Permits report, and the Pending Home Sales Index.
Plenty of economic reports on the docket this week, but nothing particularly market moving.
But that's fine, because the main event will be earnings.
Q3 earnings season kicked off last week with big banks. And by and large, it was another impressive quarter for them, even record quarters for some. Although, many were met with disappointing price action afterwards. But I'll chalk that up to poor timing, as they happened to release strong numbers while the market was pulling back. But that doesn't erase the growth they've seen.
Between today and the rest of the week, we'll hear from 379 companies, starting with GE Aerospace, General Motors and Northrop Grumman before the open, and Netflix, Intuitive Surgical and United Airlines after the close.
Tomorrow we'll hear from two Magnificent 7 companies: Meta and Tesla along with nearly 100 other companies on deck to report.
This earnings season is already off to a great start. And I'm expecting it to only get better. Especially with S&P earnings to show a 24.6% EPS growth rate.
And it all happens against a backdrop of strong bullish seasonal tendencies, including Q4 historically being the best quarter of the year (since 1950, the S&P has gone up 79% of the time, with an average gain of 4.1%); and October typically being the best month for stocks in midterm years with an average gain of 3.0%.
So, make sure you're taking full advantage of it.
See you tomorrow,

, Zacks Investment Research
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