Stocks closed solidly higher yesterday, with the S&P 500 and Nasdaq both making new all-time highs in the process. The small-cap Russell 2000, however, was the top performer with a gain of 1.53%.

News late on Tuesday that the U.S. and Japan finally reached a trade agreement was cheered by the market. With Japan ranking as our fifth largest trading partner (behind the E.U., Mexico, Canada and China), they are one of the biggies. (Especially from Japan's perspective as the U.S. is their biggest export market.) The deal was welcomed news on both sides given it was looking like a deal might not be forthcoming. So much so that Japan was one of the countries that got a letter last month stating what their new tariff rate would be sans a deal (25%). But a deal was made and Japan will be paying 'just' 15%. They will also invest $550 billion into the U.S. and agreed to buy more U.S. agricultural products.

The market is still hoping to soon hear of a deal with the European Union before the August 1^st deadline. As a bloc, they are our largest trading partner (4.3x that of Japan). If the reaction to the Japan news was good, news of a deal with the E.U. should be even better.

On the earnings front, after the close we heard from Alphabet. They posted a 138% positive EPS surprise and a 2.82% positive sales surprise. That translated to a quarterly EPS growth rate of 171% vs. this time last year, and a sales growth of 14.5%. They were off -0.58% during the normal session before earnings, and were trading up nearly 2% in after-hours trade following earnings.

Tesla reported after the close as well and posted a 2.56% positive EPS surprise and a 0.28% positive sales surprise. That equated to a quarterly EPS growth rate of -92.3%, and a sales growth of -11.8%. Elon Musk acknowledged they "probably could have a few rough quarters," adding "I am not saying that we will, but we could." They were up 0.14% during the normal session before earnings, and were trading lower by roughly -4.50% in after-hours trade following earnings.

We'll hear from another 210 companies on deck to report today including Honeywell, Union Pacific, The Blackstone Group, gold producer Newmont, and Intel to name a handful.

In other news yesterday, MBA Mortgage Applications were up 0.8% w/w with purchases up 3.4% and refi's off -2.6%.

Existing Home Sales came in at 3.93 million (annualized) vs. last month's 4.04M and views for 4.00M. That's down -2.7% m/m, and flat (0.0%) y/y.

And the Atlanta Fed Business Inflation Expectations eased to 2.3% y/y from last month's 2.4% pace.

Today we'll get Weekly Jobless Claims, the Chicago Fed National Activity Index, the PMI Composite report, New Home Sales, and the Kansas City Fed Manufacturing Index.

While there's still two more days left in the week, all of the indexes are in the green for the week. And after yesterday's impressive rally, the market will see if it can build on those gains today.

See you tomorrow,