Stocks Hit Pause, But Still Solidly Higher For The Week  Image: Bigstock Stocks closed modestly lower yesterday, ending the S&P's 4-day winning streak. But the markets kept the overwhelming majority of the last two and a half weeks of gains intact. Reports that Russia was removing some troops out of Ukraine were met with other reports suggesting they were simply repositioning them elsewhere in Ukraine. Meantime, cease-fire negotiations continue. But they have so far been fruitless. And many wonder if Russia has any interest in those talks at all other than buying time and having the optics of ostensibly trying to negotiate a settlement. In other news, yesterday's MBA Mortgage Applications report was down -6.8% with purchases up 1% while refi's were down -15%. Final Q4 GDP slipped to 6.9% from last month's estimate of 7.0% and views for 7.1%. Regardless, it was a spectacular quarter of growth. Corporate Profits showed a 24.8% y/y growth rate. That's down from last month's pace of 26.7%. But again, it's a spectacular showing and underscores just how strong the economy is. The State Street Investor Confidence Index dipped a bit to 99.7, down -4.2 points from last month's 103.9. The biggest decline was seen in Europe where that component fell -10.9 points to 82.9. Asia was not that far behind with a drop of -8.2 points to 88.7. The North American component was down just -3.3 points at 103.1. No doubt the war on Ukraine hurt the European numbers. And China's Covid resurgence hurt Asia. The U.S., while down, remains strong. The ADP Employment Report came in at 455,000 new private payroll jobs, beating the consensus for 438,000. The ADP report is often looked at as a barometer for what the Bureau of Labor Statistics (or BLS) will show in their Employment Situation Report. While the ADP report has a spotty track record of forecasting what the BLS report will say, yesterday's better than expected reading is welcome news. At the moment, the consensus for Friday's BLS jobs report is for 490,000 new jobs to have been created. The unemployment rate is expected to decrease from 3.8% to 3.7%. In the meantime, we've got Weekly Jobless Claims today, the Challenger Job-Cut Report, Personal Income and Outlays, and the Chicago PMI report. We'll also hear from OPEC (at their monthly meeting), and see whether they increase oil production. The surge in oil prices, especially as Europe grapples with reducing their dependence on Russian oil (which unfortunately accounts for a huge percentage of European consumption), is just one of the commodity products that has seen their prices rise. Increased demand, coupled with supply chain disruptions, and geopolitical tensions, have sparked the worst inflation in 40 years. And nowhere is this more evident than in the commodities markets. To learn all about the bull market in commodities, be sure to read our latest commentary... How to Trade the Commodity Bull Market Best,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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