Six Weeks In A Row And Counting

The markets cheered Thursday night's Senate passage of a budget bill, which gives the administration great momentum to pass their much anticipated tax cuts/reform package. The markets on Friday jumped on the news with all of the major indexes closing up for the day, and for the week, while the Dow and the S&P have now closed up six weeks in a row. And I don't expect it to stop there.

The significance of the budget passage is that it allows the Senate to now pass their tax legislation with a simple majority of 51 votes rather than the needed 60 votes without one. And since literally no Democrats appear willing to vote for the plan, this was a crucial step for the administration to get their plan approved.

The market cheered the news fully knowing how transformational this tax plan, especially the corporate tax cuts, will be for the growth of the economy and thereby the market.

Granted, we still need the House and the Senate to come together. But the House has already proven more capable of advancing the administration's agenda than the Senate. That's why this was such a big deal. And Congress is sounding optimistic that they can get this done by Thanksgiving.

In other news, Existing Home Sales increased to 5.390 million units (annualized) from last month's 5.350 mil. and views for just 5.300 mil.

And while not economic news, it's still worth noting the great accomplishment of US forces and their partners liberating Raqqa (an ISIS stronghold in Syria) from ISIS.

So wonderful to see events where good overcomes evil. And that's a win for the entire world.

Turning to this week, earnings season kicks into high gear. And since the market typically goes up during earnings season, there's a good deal of optimism in the market right now. And rightly so.

Another up week will make it seven weeks in a row.

See you tomorrow,

Kevin Matras

Executive Vice President, Zacks Investment Research

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