Stocks closed mixed on Friday, but up again for the week, making it 4 up weeks in a row for the S&P 500, Nasdaq, the small-cap Russell 2000, and the mid-cap S&P 400, and 5 up weeks in a row for the Dow.

The big 3 indexes are all in new record territory. And the Dow logged its first close above the 40,000 threshold on Friday, closing at 40,003.59.

YTD, the Dow is up 6.14%, the S&P is up 11.2%, and the Nasdaq is up 11.2% as well.

The market is in a good spot. The economy is doing well. Estimates for corporate sales and earnings are on the rise. Inflation is starting to head back down, once again. And interest rates are likely to head lower later this year.

Moreover, the cyclical tendencies are on the market's side with the 4-year Presidential cycle showing that year 4 (that's this year) is the second-best year of all four years (second only to year 3, which was last year when the market gained 24%). Simply put, stocks typically do well in Presidential election years.

On Friday, E-Commerce Retail Sales rose 2.1% q/q vs. last quarter's 0.8% pace.

Although, Leading Indicators slipped -0.6% m/m vs. last month's -0.3%, and views for the same.

Not much in the way of economic reports out today. Or tomorrow for that matter.

But we'll get plenty of housing data and energy data on Wednesday, more housing data and manufacturing numbers on Thursday, and Durable Goods Orders on Friday.

Last week's wholesale PPI and retail CPI inflation reports put the market at ease that inflation was not beginning to climb higher, as feared, but instead is starting the head lower, once again. We'll get another look at inflation at the end of next week (Friday, May 31) with the Personal Consumption Expenditures (PCE) index (which is the Fed's preferred inflation gauge).

The last PCE report showed the core rate (ex-food & energy) at 2.8% y/y vs. their peak from two years ago of 5.3%.

While everyone agrees that inflation is still too high, and that disinflation has slowed, the Fed is still forecasting 3 rate cuts this year (presumably by 25 basis points each). Granted, the timeline has been pushed out with the first cuts not expected to happen until September at the earliest, but that's still bullish for the market.

There should not be much to get in the way of the markets this week as they attempt to build on last week's upside breakouts.

Although, there could be some position squaring ahead of the 3-day Memorial Day weekend as the markets will be closed on Monday for Memorial Day.

Travel for this Memorial Day weekend, for both automobile and plane, is expected to be the busiest in 2 decades. Just another piece of data that underscores the strength and resilience of the economy.

If all goes well this week, the markets should be able to add to their winning streak, and build on their record gains.

See you tomorrow,