Stocks closed lower yesterday with all of the indexes in the red.

There was no new economic news yesterday.

But continued concern over what Israel's response will be to Iran's missile attack from last week weighed on the market.

As did worries over hurricane Milton headed for Florida.

Relief efforts for hurricane Helene are still underway, and a long way from recovery. Another storm is only going to add to the challenges in that area.

Today we'll get the NFIB Small Business Optimism Index, the International Trade in Goods and Services, and the Treasury Buyback Announcement.

We'll also hear from Fed policymakers Adriana Kugler, Raphael Bostic, Susan Collins and Philip Jefferson as they speak at their engagements throughout the day.

The main events on the economic-report docket for this week are the inflation reports: one being the Consumer Price Index (CPI – retail inflation) on Thursday, 10/10; and the other being the Producer Price Index (PPI – wholesale inflation) on Friday, 10/11.

Even though the Fed has acknowledged that inflation risks have receded, some still see it as a concern. Especially after last week's better-than-expected jobs report which showed that high interest rates may not have slowed the economy down as much as some might have thought.

Then with oil prices on the rise, some are worried that progress on inflation could slow once again, possibly halt, or worse.

Fed Funds traders seem a bit less concerned as they are pricing in an 86.3% likelihood of a 25 basis point cut in November. But that's down from the virtual certainty (100%) for a cut in November from a few weeks ago when the consensus was for 50 basis points vs. 25.

This week also marks the unofficial start of earnings season.

We'll hear from big banks JPMorgan Chase, Wells Fargo, and Blackrock (amongst others), when they announce earnings on Friday.

Then next week is the official start of earnings season when Alcoa reports on Wednesday, 10/16, after the close. That week also has us hearing from more big banks including Bank of America, Citigroup, and Goldman Sachs, along with other widely held companies like Johnson & Johnson, Tesla, and Netflix.

(BTW, Alcoa is only the so-called 'official' start of earnings season because it was once the first Dow component to report earnings. Just like Hewlett-Packard has been called the official end of earnings season because it used to be the last of the Dow components to report earnings. Ironically, both AA and HPQ are no longer part of the Dow Jones Index. But after bookending earnings season for so long, that tradition has stuck, regardless of their current Dow non-membership status.)

Earnings season is always an exciting time since stocks typically go up during earnings season. And this earnings season should be no different, especially given the upward trend of improvement on earnings estimates. Q3'24 earnings are expected to be up 3.7%, and sales up 5.1%. Q4'24 earnings are expected to be up 10.2%, and sales up 5.8%. Q1'25 is expected to show earnings up 12.8%, and sales up 5.7%. And Q2'25 is expected to show earnings up 14.0%, and sales up 5.5%.

In the meantime, we'll see if the market can shrug off yesterday's decline, and build upon last week's advance.

See you tomorrow,