Market Gains On Economic Optimism

The markets closed mostly higher yesterday.

This was largely expected, especially after Tuesday's State of the Union speech which touted the growing economy, robust employment, and soaring stock market.

Of course, we still have plenty of uncertainty over the spending bill deadline which comes due of Feb. 8th. This includes debate over DACA and border security. We'll see how all of this plays out. With such hyper-partisanship in DC nowadays, who knows what will happen.

So I don't think the volatility in the market is over with. But I do believe this is transitory. And I'm expecting new highs once this manufactured drama is finally over with.

In other news, yesterday's MBA Mortgage Applications fell -2.6% with the purchase index down -3.0% and refi's down the same. While last month's snapshot does show a decline, the y/y increase in purchase applications stands at an impressive 10%.

Pending Home Sales were up 0.5% vs. the previous month's upwardly revised 0.3%.

The Chicago Purchasing Managers Index beat expectations at 65.7 vs. views for 64.0. Although, this was down from the previous month's 67.8. Nonetheless, this was one of the best readings in years, only to be outdone by the previous month's expansion high.

And the ADP Employment Report estimated that 234,000 private sector jobs were created last month, beating the consensus for 195,000. This report is a precursor to the always important Employment Situation Report which comes out on Friday. In that report, the consensus is calling for 172,000 private sector jobs. If the ADP report is correct, we could be looking at a positive surprise on Friday.

Looking for more gains to come.

Hopefully you're beating the market so far this year. This is history in the making. So it's imperative you take full advantage of it. Sadly, too many people are underperforming the market. Sounds almost unbelievable, but it's true.

I think for many, their universe of familiar stocks is relatively small, so they find themselves in mediocre stocks because they don't know of anything better to get into. But it doesn't have to be that way. Find out how to outperform the market and put the winningest stocks on your radar before they make their move. See how in our latest commentary:

Are You Beating The Market This Year?

Best,

Kevin Matras

Executive Vice President, Zacks Investment Research

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