Stocks End Mixed, Washington Still In Focus  Image: Bigstock Stocks closed mixed yesterday with the Dow and S&P in the green, while the Nasdaq and small-cap Russell 2000 were in the red. This week has been, and will continue to be, all about Washington. At stake is the deadline for funding the government, the debt ceiling (will Congress raise it or suspend it?), the fate of the infrastructure bill, the fate of the reconciliation bill, and what new tax hikes will be passed to pay for it. Dates for votes have been moved so many times, it's unclear what will be voted on and when. But deadlines are looming. The continuing resolution to fund the government, and the debt ceiling, have hard deadlines for when a deal needs to get done, or suffer the financial consequences.
The other bills have arbitrary deadlines that could come and go. Those deadlines carry mostly a political cost. But given the trillions of dollars that could, or could not, be injected into the economy, those carry plenty of financial weight and importance. In other news, MBA Mortgage Applications declined by -1.1% w/w (purchases were down -1.0%, while refi's were down -1.0% as well). Although, Pending Home sales surged, gaining 8.1% m/m vs. last month's -2.0% and views for just 0.9%. The index stands at 119.5 vs. last month's print at 110.5. The Survey of Business Uncertainty showed sales growth expectations coming in at 4.28% for the coming year, down a bit from last month's pace of 4.85%. But employment growth ticked up to 5.12% for the year ahead vs. last month's 4.79%. And the State Street Investor Confidence Index came in at 105.9 vs last month's 109.9. The report notes that while it did drop 4 points in September, it "remained near its highest level in 3 years." The European component fell -9.2 points to 95.6; the Asian component fell -0.8 points to 97.7; while the American component fell -4.4 points to 106.1. (Above 100 shows institutional investors increasing their holdings in 'risky assets.' September was at a slightly slower pace for increasing assets than the month before for the American component, but still increasing nonetheless.) Today we'll get Weekly Jobless Claims, the third estimate for Q2 GDP (estimate is for 6.7%, up from last month's 6.6%), the Chicago PMI, and Corporate Profits. And, of course, all the news out of Washington.
In the meantime, stocks continue to trade near their recent highs (only a few percent away), and it won't take much to send them higher. If news out of Washington can't do it, we've got Q3 earnings just around the corner. And statistically, that likely can.
Either way, with full-year growth still expected to come in at the fastest pace in 37 years, coupled with the prospect for unprecedented pent-up economic demand to meet an unprecedented amount of stimulus money, it looks like there's a lot more upside to go. So now is the time to start preparing for it. And to do so, be sure to read our latest commentary... Getting Ready For The Next Leg Up Best,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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