Stocks closed lower yesterday with all of the major indexes giving up about -2% or more.

There was no one catalyst that weighed on stocks. It was just a pullback like any other pullback. And some may have felt like the market was due for a breather anyway.

There's a lot to be excited about for 2021. But there will also be challenges.

For one, there was a bit of disappointment that Congress likely won't get around to approving a stimulus package until mid-March. Many were hoping we would get one in February after the House said they planned on voting for it then. But the Senate pushed their timeline out further.

There's also been some concern over the potential impact of new policies on some industries. Oil and gas is one of them with a freeze on new oil and gas leases on federal lands, and an announcement that federal agencies will look to eliminate fossil fuel subsidies. That will likely cost some jobs.

The push for a greener economy will create new jobs in the long run. But there's bound to be some job losses and displacement in the interim.

But the economy is still in a great position to soar this year. Especially as more and more people get vaccinated (that's the key to ending the pandemic), and more and more big cities ease their restrictions and allow businesses to open up. There's tremendous pent-up demand. We've already seen some of that last year when we first came off of lockdown, even though large portions of our economy were still closed. This time, it's likely to be even bigger as we start getting back to normal.

In yesterday's FOMC Announcement, the Fed left interest rates unchanged (as expected). Fed Chair, Jerome Powell, in his press conference afterwards reiterated that interest rates will likely stay near zero for the foreseeable future, and that they have no plans to stop their bond buying program at this time. Their focus remains on seeing the economy strengthen and will continue to do what they can to support it.

After the close, we got solid earnings reports from Apple, Facebook, and Tesla. Facebook was first with a 20.50% positive EPS surprise, and a 6.21% positive sales surprise. Tesla was next -- and while they posted a -22.33% negative EPS surprise, they reported a 3.27% positive sales surprise. And it was their first full year of showing a profit. Apple then reported a record quarter with a 19.15% positive EPS surprise, and a 7.90% positive sales surprise. Although, all three were trading mostly lower in after-hours trade. But very impressive numbers.

We've got more earnings on deck with another 274 companies reporting between today and tomorrow, and another 791 next week.

After yesterday's pullback, some are wondering what the market will need to see in order to make fresh new highs.

Well, two key drivers of stocks are flashing bullish signals. And it looks like there's a lot more upside to go. To learn how to take advantage of it, please read our latest commentary...

What Will Be the Rally's Next Catalyst?

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