Stocks closed higher yesterday led by the small-cap Russell 2000, and the mid-cap S&P 400.

After the markets racked up their best week of the year last week, those gains, so far, look to be continuing this week.

And it's not surprising given what appears to be the completion of a run-of-the-mill pullback.

Not to mention another earnings season, which is shaping up to be better than expected (based on what we've seen so far.) As you know, stocks typically go up during earnings season, and we're seeing that once again.

Today we'll hear from 202 companies set to report with heavyweights Eli Lilly, Coca-Cola, and McDonald's going before the open, and Amazon, Advanced Micro Devices, and Starbucks after the close.

In other news, yesterday's Dallas Fed Manufacturing Index slipped to -14.5 vs. last month's -14.4 and views for -11.3. The Production Index, however, improved to 4.8 vs. last month's -4.1.

Today we'll get the Employment Cost Index, the Case-Shiller Home Price Index, the FHFA House Price Index, the Chicago PMI, and the Consumer Confidence Index.

But aside from earnings, the main event this week is Wednesday's FOMC Announcement and Fed Chair Press Conference.

While 'nobody' is expecting a rate cut this week, everybody will be listening to what the Fed has to say about inflation and the economy, and their expectations on rate cuts.

The Fed's last official estimate forecast 3 rate cuts this year (presumably by 25 basis points each). We'll see if that changes come Wednesday.

At the moment, the consensus is for the first rate cut to take place in September, with Fed Funds traders placing odds at 58.1%.

In the meantime, stocks are within striking distance of their all-time highs.

While this earnings season appears to be supportive for stocks with earnings expected to be up 2.2% and sales up 3.4%, the upcoming earnings seasons look even better with Q2'24 expected to show earnings up 9.0% and sales up 4.5%; Q3 expected to be up 7.1% and sales up 5.0%; and Q4 expected to be up 12.3% and sales up 5.5%.

And since stocks are forward looking, that bodes well not only for the future, but also for right now.

See you tomorrow,