Stocks Closed Mixed Yesterday, PCE Inflation Report On Deck For This Morning Stocks closed mixed yesterday with the big 3 indexes (Dow, S&P 500 and Nasdaq) modestly in the red, while the small-cap Russell 2000 and mid-cap S&P 400 finished modestly in the green. Before the open yesterday, Walmart reported earnings and posted a positive EPS surprise of 1.37%, and a positive sales surprise of 0.32%. That translated to a quarterly EPS growth rate of 12.1% vs. this time last year, and a sales growth of 5.60% on record-high revenue. They announced a $30 billion share buyback program. They also increased their dividend by 5% to 99 cents a share. Although, full-year guidance for this year and next was a bit conservative. They were off -1.38% yesterday. For context, they are up 12.1% YTD. And they have gained 38.2% over the last 13½ months. Deere & Co. also reported before the open and posted a positive EPS surprise of 26.0%, and a positive sales surprise of 5.22%. That equated to a quarterly EPS growth rate of -24.1%, and a sales growth of 17.5%. They raised full-year revenue guidance by 8.57% above their previous outlook. They were up 11.56% yesterday. After the close, we heard from Comfort Systems, and they posted a positive EPS surprise of 38.4%, and a positive sales surprise of 15.8%, for a quarterly EPS growth rate of 129%, and a sales growth of 41.7%. They were up 4.10% in the regular session before earnings, and another 4% in after-hours trade following earnings. Today we'll get another 84 companies on deck to report. In other news, yesterday's Weekly Jobless Claims fell by -23,000 to 206,000 vs. the consensus for 225,000. The smoother 4-week moving average came in at 219K vs. last week's 220K. And the Pending Home Sales Index was off -0.8% m/m vs. last month's -7.4% pace and estimates for 2.5%. The index itself came in at 70.9 vs. last month's 71.5. It was also reported that 30-year mortgage rates fell to 6.01%, down from last year's 6.85%. Rates are now at their lowest level since September 2022. Today we'll get another look at inflation (for December), with the Personal Consumption Expenditures (PCE) index. The headline rate is expected to be up 0.3% m/m vs. last month's 0.2% pace, with the y/y rate easing to 2.8% vs. last month's 3.0% pace. The core rate (ex-food & energy) is expected to be up 0.3% m/m as well, vs. last month's 0.2%, while the y/y rate is forecast at 2.9% vs. last month's 3.0%. We'll also get the advance estimate for Q4 GDP. The consensus is calling for 2.8%. We'll also get New Home Sales and Consumer Sentiment. Today is also the next 'opinion day' for the Supreme Court, which is when they release written decisions on argued cases. Everybody is waiting to hear their verdict on President Trump's authority to implement tariffs under the IEEPA (or International Emergency Economic Powers Act). But note, just because Friday is an opinion day, there's no guarantee they'll release one. Two opinion days, so far, have come and gone this year without mention of the tariffs case. If there's no ruling today, the next opinion days are 2/24 and 2/25. With one more day to go, most of the indexes are up for the week, sans the Dow. But it won't take much to get them into the plus column. A little bit of good news today could do the trick. Best,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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