Stocks Soar On Friday And Close Up For The Week  Image: Bigstock Stocks closed sharply higher on Friday, and put in their first weekly gain of 2022. After a shaky start, which saw stocks dip early in the morning, they quickly turned things around and shot higher. And they then surged even more into the close. It was a fitting end to a wild week as oversold conditions ushered in a wave of new buying. Strong earnings from Apple on Thursday after the close set the stage for a positive Friday. But so have strong earnings from other companies since earnings season began. There were big expectations for Q4. And so far, they're being met or exceeded. And that should come as no surprise given that Q4 GDP just came in well above expectations at 6.9% vs. views for 5.7%. The Fed's FOMC Announcement on Wednesday, threw some for a loop. But after everything was said and done, the Fed delivered what they had been telegraphing for months. In short, they're expected to wrap up their bond buying in March; they left interest rates unchanged with expectations for 3-4 hikes by year's end, which will likely begin in March; and they expect to begin reducing their balance sheet after they start raising rates, but acknowledged that could take some time. Pretty much what everyone had been expecting. The thing that got lost on so many people after the Fed's announcement was that their tightening of monetary policy is a reflection of a strong economy. They're not tightening because the economy is weak. On the contrary, they're tightening because it's so strong. And because it's so strong, which could stoke inflation even more, it's now time to begin reigning in the unnecessarily large amount of liquidity out there in an effort to combat inflation. And as Mr. Powell shared, there's "quite a bit of room to raise rates without threatening the labor market." In other news, the Employment Cost Index rose 1.0% in Q4, and 4.0% for the year vs. the consensus for 1.2%, and 4.1% respectively. And Consumer Sentiment came in at 67.2 vs. last month's 68.6 and views for the same. No doubt that rising inflation, and of course Covid, weighed on sentiment a bit. But in spite of that, the consumer is strong. In fact, it reminds me of what Jamie Dimon said just the other week. He said he thinks the U.S. is headed for the best economic growth in decades, and he went on to say that the "consumer balance sheet has never been in better shape," and "they're spending 25% more today than pre-Covid." So it looks like we're poised for another year of solid growth, which suggests another year of solid market gains. In the meantime, we've got a full slate of economic reports out this week, and another 668 companies ready to report earnings, with 44 of them on deck for today. And since stocks usually go up during earnings season, it looks like there's a lot more upside to go. So make sure you're taking full advantage of it. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
没有评论:
发表评论