Stocks Closed Higher Yesterday Ahead Of Election Results And Tomorrow's FOMC Announcement On Rates Stocks closed higher yesterday with all of the major indexes up by more than 1%. The small-cap Russell 2000 led the way with 1.88%, followed by the Nasdaq's 1.43%. Earnings season continues. Monday afternoon's positive top and bottom line surprises sent Palantir up 23.5% yesterday. Before the open yesterday, Gogo posted a positive EPS surprise of 140%, and a positive sales surprise of 3.69%. That translated to a quarterly EPS growth rate of 75% vs. this time last year, and a sales growth of 2.63%. They soared 30.2% in the regular session after earnings. After the close, we heard from Qualys, which posted a positive EPS surprise of 17.3%, and a positive sales surprise of 2.20%. That equated to a quarterly EPS growth rate of 3.31% vs. this time last year, and a sales growth of 8.36%. They were up 2.91% in the regular session before earnings, and 19.3% in after-hours trade following earnings. Today we'll get another 415 companies on deck to report including Novo Nordisk and CVS Health before the open, and Qualcomm, ARM Holdings and AppLovin after the close to name a handful. In other news, the International Trade in Goods and Services report showed the goods and services deficit widen to -$84.4 billion vs. last month's -$70.8B and views for -$83.9B. And the ISM Services Index came in at 56.0 vs. last month's 54.9 and estimates for 53.5. Today we'll get MBA Mortgage Applications, the PMI Composite report, and the EIA Petroleum Status report. Additionally, the 2-day FOMC Meeting begins today, culminating in the FOMC Announcement tomorrow (11/7). The Fed is widely expected to cut rates by another 25 basis points. In fact, the CME's FedWatch Tool places a 97.8% probability that a quarter point cut is coming. The interest in Thursday's announcement on rates has more to do with what the Fed expects to see for the rest of the year and then next year. The Fed's latest projections are for 2 more rate cuts this year (one in November and one in December). And then another series of rate cuts next year totaling -100 basis points, which would put the Fed Funds rate at 3.4%. Now that the election is over (even though all the results are yet to be known), the market can get back to focusing on earnings, economic growth and interest rates. And if that's the focus, stocks should finish the year on a strong note given the upward trend of improvement on earnings estimates, the resilience of the economy, and lower interest rates coming. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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