Stocks soared yesterday with all of the major indexes closing sharply higher. The Dow was up 1.34%, the S&P was up 2.02%, the Nasdaq was up 2.76%, and the small-cap Russell 2000 was up 3.19%.

The S&P is now up 5.96% since last Thursday's correction low.

After coming as close as you could last week to -20% (bear market territory), the S&P is now down 'just' -14.75% from their all-time high close.

And all of the indexes are now up for the week. Granted, we still have three more trading days to go this week. But after 13 down weeks this year vs. only 6 up weeks, seeing the market get a big jump on things so early is great to see.

In other news, Retail Sales were up 0.9% m/m, beating the consensus for 0.8%. Ex-vehicles it was up 0.6% m/m vs. views for 0.4%. And ex-vehicles & gas it was up 1.0% vs. estimates for 0.6%.

Industrial Production rose 1.1% m/m vs. the consensus for 0.4%, with Manufacturing Output up 0.8% vs. the consensus for 0.3%, and the Capacity Utilization Rate at 79.0% vs. last month's 78.2% and views for 78.5%.

And Business Inventories rose 2.0% vs. the consensus for 1.8%.

Jerome Powell spoke at the Future of Everything Festival in NY yesterday, and said the Fed was committed to raising rates until inflation goes down.

That was interpreted bullishly since inflation is the biggest risk to the economy and the market right now. And at the moment, that still appears to mean a Fed Funds rate of 2.8% by the end of 2023. Big enough to tamp down inflation, but not so big as to stifle the economy.

Fortunately, the underlying fundamentals of the economy are strong, and should provide enough of a cushion to accommodate tighter monetary policy. In fact, because the economy is so strong, he believes it will "flourish in the face of less accommodative monetary policy."

That's what the market is hoping for as well. And based on the last few days, it looks like it's starting to believe it.

See you tomorrow,