Stocks Closed Mostly Higher Yesterday To Start The Shortened Christmas Trading Week Stocks closed mostly higher yesterday to start the shortened Christmas trading week. The Nasdaq led the way with a 0.98% gain, followed by the S&P with 0.73%. The small-cap Russell 2000, however, was down by -0.22%. Yesterday's Durable Goods Orders report showed New Orders off -1.1% m/m vs. last month's upwardly revised 0.8% (from 0.2%) and views for -0.2%. Ex-Transportation it was off -0.1% vs. last month's 0.2% and estimates for 0.3%. Core Capital Goods were up 0.7% vs. last month's -0.1% and the consensus for 0.1%. The Chicago Fed National Activity Index improved to -0.12 from last month's -0.40. The 3-month moving average, however, slipped to -0.31 vs. last month's -0.24. New Home Sales came in at 664,000 units (annualized), up from last month's upwardly revised 627K (from 610K), and in line with the consensus. And Consumer Confidence came in at 104.7 vs. last month's upwardly revised 112.8 (from 111.7) and expectations for 113.0. Today, the only economic report on the docket is the Richmond Fed Manufacturing Index. Note, the markets will close early today with stocks closing at 1:00 PM ET and bonds closing at 2:00 PM. The markets will also be closed tomorrow for Christmas. When trading resumes on Thursday, we'll get Weekly Jobless Claims, the EIA Petroleum Status Report, and the Survey of Business Uncertainty. And then the week wraps up with the International Trade in Goods report, Retail Inventories, Wholesale Inventories, and the Baker Hughes Rig Count report on Friday. The report everybody is really waiting, however, now that the inflation reports are behind us, is next Friday's Employment Situation report. With the Fed's dual mandate of price stability (low inflation) and maximum employment, the jobs report is an important piece in helping to shape the Fed's monetary policy. One report is unlikely to change things. But the Fed insists it will remain data dependent. And every report counts. In the meantime, counting today, there's just 4½ trading days left until 2024 is over. YTD, the Dow is up 13.8%; the S&P 500 is up 25.3%; the Nasdaq is up 31.7%; the small-cap Russell 2000 is up 10.4%; and the mid-cap S&P 400 is up 12.7%. It's been a spectacular year so far. Spectacular 2 years actually. It also looks like the S&P 500 is headed for the second year in a row of 20%+ returns. (2023 was up 24.3%.) A rare feat. I note this because the last time we saw this take place was back in 1995-1996. (Prior to that, you'd have to go all the way back to 1954-1955 to see that.) But more impressive than the two years in a row of 20%+ gains, is what happened afterwards. In 1997 it was up 31.0%, in 1998 it was up 26.7%, and in 1999 it was up 19.5%. That's 5 long, glorious years of gains. Those gains were driven by the technology boom of the internet and dot-com companies. The parallel is that today's gains, in part, are being driven by another technology boom, this one being shaped by Artificial Intelligence (AI). And it looks like we could be on the cusp of another 5 years of gains, if not more. Add in the prospect for lower interest rates, a strong economy, and increasing earnings estimates for the coming quarters, not to mention a broadening rally, and you have a recipe for an historic and long-lasting bull market. So make sure you're taking full advantage of it. Merry Christmas and Happy Holidays! See you on Thursday,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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