Stocks Close Lower, Ending 9-Day Winning Streak For The Dow  Image: Shutterstock Stocks closed lower yesterday with all of the indexes down by more than -1.25%. After 9 straight days of gains for the Dow, and 5 brand new all-time highs, they finally had a down day. The Dow still remains above last year's high (previous all-time high). The S&P is just 2.56% under their all-time high. And the Nasdaq Composite is 9.71% below theirs. Although, the Nasdaq 100, after piercing their all-time high on Tuesday, and then again intraday yesterday, closed just 1.27% below their previous all-time high. Yesterday's late day pullback was bound to happen eventually after a blistering rally, and the upcoming holiday. Profit taking and position squaring were likely in play yesterday. But I would not count the Q4 rally as being over. There's still 6 more trading days left in 2023. And the so-called Santa Claus rally doesn't officially begin until after Christmas and goes thru the first 2 trading days of the new year. Bulls will likely look at this pause/pullback as an opportunity to get in. And if we see a further pullback, it would likely just present an even better entry point. In other news, yesterday's MBA Mortgage Applications dipped -1.5% w/w, with purchases down -0.6% and refi's down -1.8%. Existing Home Sales came in at 3.82 million units (annualized) vs. last month's 3.79M and views for 3.775M. That's a 0.8% increase. On a y/y basis it was down -7.3%. But that was an improvement from last month's print of -14.6%. And Consumer Confidence rose to 110.7 or 9.6% vs. last month's 101.0 and the consensus for 103.4. Today we'll get the 3rd and final estimate for Q3 GDP (consensus is for 5.2%, which is in line with last month's estimate), Weekly Jobless Claims, the Philadelphia Fed Manufacturing Index, Leading Indicators, and Corporate Profits. But the report everyone is really looking forward to is Friday's Personal Consumption Expenditures (PCE) index, which is the Fed's preferred inflation gauge. It's expected to come in lower, just like the CPI and PPI reports before it. A stronger than expected reading would be a bit of a surprise.
But it would take more than a small uptick to change the Fed's mind on rates, which appears to no more rate hikes, and a pivot sometime next year to rate cuts. Nonetheless, you can be sure everybody will be watching that number closely. In the meantime, we have a busy day of reports to get thru today first. And we'll see if the market can regroup and push the market back up. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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