Stocks Down On Monday, But Up For The Month  Image: Bigstock Stocks ended lower yesterday, but finished the month with solid gains. For October, the Dow was the best performer with a gain of 13.95%. The S&P was up 7.99%. The tech-heavy Nasdaq was up 3.90%. While the small-cap Russell 2000 was up 10.94%. The rally began with the key upside reversal day on 10/13. Ever since then, stocks have been on a tear. Earnings season continues with a total of 1,646 companies reporting this week.
The main focus this week, however, will be the FOMC announcement on Wednesday, 11/2. The Fed Funds rate is currently at a midpoint of 3.13%. After three back-to-back-to-back 75 basis point rate hikes this year, the likelihood is extremely high for another 75 bps this week, which would put the Fed Funds rate at 3.88%. That would leave another 50 bps rate hike left to go in December for the Fed to hit their end-of-year target rate of 4.4%. After that (February is the first FOMC meeting of 2023), they would only need to raise by another 25 bps to reach their projected terminal rate (the rate at which they expect to keep rates steady at for a while), of 4.60%. The Fed will make their announcement on rates on Wednesday at 2:00 PM ET, and Fed Chair, Jerome Powell, will hold his customary press conference afterwards at 2:30 PM ET. Assuming there are no surprises, this should be supportive for stocks. In other news, yesterday's Chicago PMI came in at 45.2 vs. last month's 45.7 and views for 47.3. And the Dallas Fed Manufacturing Survey fell to -19.4 vs. last month's -17.2 and the consensus for -18.0. The Production Index fell to 6.0 from last month's 9.3. Today we'll get the PMI Manufacturing report, the ISM Manufacturing Index, Construction Spending, and the Job Openings and Labor Turnover Survey report (or JOLTS for short). But again, the Fed announcement on rates will take center stage. Although, after that, the focus will then shift to Friday's Employment Situation report. In the meantime, the markets closed out a great month. And with Q4 typically the best quarter for stocks, especially during midterm years, there's plenty of reason to believe we could see another couple of good months ahead of us, just like October. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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