Stocks Closed Up For The Week, That's 6 Up Weeks In A Row For The Dow, S&P And Nasdaq Stocks closed mostly higher on Friday, but all of the major indexes closed higher for the week. The higher weekly close made it 6 up weeks in a row for the Dow, S&P 500, Nasdaq and the mid-cap S&P 400. The small-cap Russell 2000 was up for the second week in a row (and 4th up week out of 6). It's also worth noting that the Dow, the S&P 500 and the S&P 400 made new all-time high closes in the process. Thursday afternoon's beat and raise by Netflix saw the stock up 11.1% on Friday. Earnings season is off to a great start. Last week was the 'official' start of earnings season. But we've already been at it unofficially for 2 weeks now. This week marks week number 3. And there are 744 companies on deck to report, including SAP and Nucor today; GE Aerospace and Texas Instruments tomorrow; Tesla and Coca-Cola on Wednesday; Amazon and UPS on Thursday; and Colgate-Palmolive and HCA Healthcare on Friday. Earnings season is always an exciting time since stocks typically go up during earnings season. We're seeing that so far this earnings season. And I expect we'll see that in the following earnings seasons as well given their upward trend of improvement. While Q3'24 earnings are expected to be up 3.1%, Q4'24 earnings are expected to be up 9.6%. Q1'25 earnings are expected to be up 12.4%. And Q2'25 earnings are expected to be up 13.4%. In other news on Friday of last week, the Housing Starts and Permits report showed Starts at 1.354 million units (annualized) vs. last month's 1.361M and views for 1.400M. Permits were at 1.428M vs. last month's 1.470M and estimates for 1.500M. Of note last week, the European Central Bank (ECB) cut interest rates by another 25 basis points. That makes it the 3rd rate cut this year. And the forecast is for even more cuts to come by year's end. As you know, China announced significant stimulus measures last month. And the Hang Seng index has responded bullishly, exiting their bear market and poised for more gains. And more stimulus is expected, with another cut in lending rates as soon as today. Interest rate cuts and stimulus measures around the world are all bullish for the market since this is essentially a global economy. The U.S. has been the key driver over the last several years, as often is the case, and will likely continue to be. But with China being the second-largest economy and the European Union the third-largest, what happens there matters. And the markets are looking up over there too. The market should focus on earnings for the next couple of weeks. Then shift back to inflation when the Personal Consumption Expenditures (PCE) index (which is the Fed's preferred inflation gauge), comes out on 10/31. Then it should shift to the labor market the very next day when the Employment Situation report comes out on 11/1. Then we have the election on 11/5. And then the next FOMC Announcement on 11/7, when the Fed is widely expected to cut rates by another 25 basis points. It's going to be a busy, next few weeks. But earnings season should provide a bullish backdrop to it all. And earnings season doesn't officially end until 11/19 when HP reports. In the meantime, after 6 up weeks in a row, we'll see if the markets can make it number 7 this week. See you tomorrow, Kevin Matras Executive Vice President, Zacks Investment Research |
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