Stocks Closed Higher Yesterday Led By The Small-Caps Stocks closed higher across the board yesterday. The small-cap Russell 2000 led the way with an outsized gain of 1.63%, followed by the mid-cap S&P 400 with 1.01%. Before the open yesterday, ON Semiconductor reported earnings and posted a positive EPS surprise of 2.06%, and a positive sales surprise of 0.69%. They were up 1.39% on the day. After the close we heard from Ford Motor, which posted earnings in line with expectations, and a positive sales surprise of 4.52%. That equated to a quarterly EPS growth rate of 25.6% vs. this time last year, and a sales growth of 4.59%. It was a solid quarter, but their weaker profit guidance of $10 billion to the lower end of their previous estimate range of $10-$12B weighed on shares following the report. They were up 2.71% in the regular session before earnings, but down -5% in after-hours trade. We also heard from V.F. Corp., which showed a positive EPS surprise of 46.3%, and a positive sales surprise of 2.06%. That translated to a quarterly EPS growth rate of -4.76% vs. this time last year, and a sales growth of -9.04%. Investors cheered their top and bottom line beats, and their improving margins. They were up 1.79% in the regular session before earnings, and up roughly 18% in after-hours trade following earnings. Today we'll get another 237 companies on deck to report, including Alphabet and McDonald's before the open, and Visa, Advanced Micro Devices and Chipotle after the close. Tomorrow's earnings docket has 334 companies in queue to report, with Microsoft, Meta, Eli Lilly, AbbVie and Amgen, to name a handful. On the economic report front, yesterday's Dallas Fed Manufacturing Survey showed the General Activity Index improved to -3.0 vs. last month's -9.0 and views for the same. The Production Index rose to 14.6 vs. last month's -3.2. In other news, the markets breathed a sigh of relief that Israel's Saturday morning retaliatory strike against Iran, for their missile attack on Israel a few weeks ago, steered clear of Iran's oil production facilities. That was a red line Iran had warned would escalate tensions if crossed. Crude oil was down more than -5% yesterday. Apple yesterday released their iOS 18.1 update, which includes the first Apple Intelligence features. But only the iPhone 15 Pro, 15 Pro Max and any iPhone 16 model can access it. The exclusivity of Apple's AI's features to the latest models (including iPads and Macs) has excited investors because it should act as a catalyst to force others to upgrade their older devices to new ones. Apple was up 0.86% on the day. Today we'll get the International Trade in Goods report, Retail Inventories, Wholesale Inventories, the Case-Shiller Home Price Index, the FHFA House Price Index, Consumer Confidence and the Job Openings and Labor Turnover Survey report (or JOLTS for short). But, as I mentioned yesterday, the main event(s) this week will be Thursday's PCE inflation report and Friday's Employment Situation report. These will be the last key reports the Fed will get on inflation and the labor market before their FOMC Announcement next week on 11/7. In the meantime, most of the major indexes are hovering near their all-time highs, and it won't take much to send them into record territory yet again. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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