Stocks closed higher yesterday. Interestingly, the small-cap Russell 2000 and the mid-cap S&P 400 (both of which had been lagging all year) led the way with a gain of 2.69% and 2.05% respectively. A sharp rise in smaller and mid-sized bank stocks, and biotech stocks helped push those indexes higher yesterday.

Additionally, while the S&P 500 has been powered by the 10 largest names in the market-weighted index, the equal weighted index (ETF) performed better with a gain of 0.68% vs. 0.24%. The difference between the two has been growing over the last couple of months with the market-weighted index up double-digits this year while the equal weighted index was lower, which showed the narrowness of the rally. But seeing the small-caps, mid-caps, and other large-caps respond yesterday suggests that we could be seeing the breadth of the rally widen. And that would be a positive development.

The S&P 500, unlike the Dow and the Nasdaq, has still not officially exited their bear market yet (which necessitates a closing gain of at least 20% from their bear market low close). But they now only need another 0.20% to cross that threshold.

Slow day in terms of economic reports yesterday. Same for economic news.

But there was a report from the World Bank. They talked about how growth has slowed due to higher interest rates, inflation, and the banking crisis from earlier this year. But, ironically, they increased their growth rate projections for this year to 2.1% from their earlier estimate in January of 1.7%. Granted, that's lower than last year's global growth rate of 2.6%. But 2.1% is still growth, and it was just revised higher than they had previously thought. And that's the takeaway.

Today, on the economic report front, we'll get MBA Mortgage Applications, the International Trade in Goods and Services report, and Consumer Credit.

But while the economic news is expected to be slow this week, things pick up next week with the Fed's FOMC announcement on rates on Wednesday, June 14.

At the moment, the expectation is for the Fed to pause on rates. But there's a growing belief that they may raise another 25 basis points at the July meeting. Of course, that all depends on the data we get before the July meeting. But with the latest uptick on the PCE Index (the Fed's preferred inflation gauge), and the better than expected Employment Situation report last week, the odds are currently at almost 70% for a 25 basis point hike in July.

So all eyes will be on next week's meeting.

In the meantime, stocks continue to perform well. And now all of the major indexes are in the green for the year, including the small-cap Russell 2000 (+5.35% YTD) and the mid-cap S&P 400 (+4.10% YTD). I should also note that they too have officially exited their bear market.

Just waiting on the S&P 500.

See you tomorrow,