Busy Week This Week With Earnings, The Fed, And Jobs In Focus  Stocks were mostly lower yesterday, but not by much.
The better than expected earnings season continues with another 1,251 companies reporting between today and the end of the week. And another 1,500+ next week. This earnings season has provided a nice boost to stocks. And that support should continue.
Last week's better than expected Q2 GDP should also continue to underscore the strength of the economy and the market.
In spite of all of this good news, it's highly likely the Fed will cut interest rates on Wednesday. There's currently an 81% chance of a quarter point cut, and a 19% chance of a half point cut.
We won't know until then. But the Fed has been pretty vocal in advertising their intention to cut rates.
And while conventional wisdom suggests the stronger than expected GDP should've dampened chances for a rate cut, it's widely believed that the economy would've been much stronger had the Fed not over-tightened previously. Many view this upcoming (potential) rate cut as the beginning to undo the overzealous tightening 'mistake' the Fed made in 2018.
But the Fed also sees that while the U.S. is doing great, there's plenty of weakness elsewhere in the world. Moreover, those lagging economically have signaled they will be loosening their own monetary policy. So the Fed has lots of additional ammo to cut rates.
Stocks should also find support from the resumed U.S.-China trade talks. Senior U.S. officials are traveling to Shanghai this week for face-to-face trade negotiations with China.
Obviously, the market is hoping for good news at this meeting, if not necessarily a trade deal.
However, the market has adapted quite well to the year-long trade talks, which, so far, has not produced a deal yet.
But one of these days, we're likely to get an announcement of an actual agreement. And when we do, it could send the market soaring.
In the meantime, there's plenty of bullish news to keep stocks moving higher.
Our record employment is one of them.
And we'll get another look at our jobs market on Friday with the always important Employment Situation report.
We've got a busy week this week.
And if all goes well, we could see stocks setting even more record highs by week's end.
See you tomorrow, 
Kevin Matras Executive Vice President, Zacks Investment Research |
没有评论:
发表评论