Stocks closed higher yesterday led by the small-cap Russell 2000 with an outsized gain of 1.27%.

Earnings season continues to impress.

American Airlines reported before the open and posted a positive EPS surprise of 37.0%, and a positive sales surprise of 0.45%. That translated to a quarterly EPS growth rate of -43.3% vs. this time last year, and a sales growth of 0.29%. They also reported a 69.7% increase in operating income. The improvement should not have come as a surprise given CEO Robert Isom's comments back in July when he predicted Q2 would be "the low point" for them, and that Q3 (which they just reported) and Q4 would be better. They were up 5.62% on the day.

Honeywell also reported before the open and posted a positive EPS surprise of 10.2% and a positive sales surprise of 2.44%. That equated to a quarterly EPS growth rate of 9.30%, and a sales growth of 6.99%. They cited double-digit growth in Aerospace, and raised their full-year EPS guidance. They were up 6.81% yesterday.

After the close we heard from Intel which reported a positive EPS surprise of 2,200%, and a positive sales surprise of 4.13%. They posted a big turnaround with earnings at 23 cents vs. last year's -46 cent loss. Sales growth was up 2.79%. They were up 3.36% in the regular session before earnings. And they were up 7.30% in after-hours trade following earnings.

We also heard from Comfort Systems after the bell, and they posted a positive EPS surprise of 33.1%, and a positive sales surprise of 13.7%, for a quarterly EPS growth rate of 101.7%, and a sales growth of 35.4%. They also pointed to strong quarterly cash flow and a 65.1% increase in backlog. They were up 4.34% before earnings, and soared more than 17% in after-hours following earnings.

Today we'll hear from another 47 companies including Proctor & Gamble, HCA Healthcare, and General Dynamics, to name a few.

In other news, Treasury Secretary Scott Bessent sounded an upbeat note by saying, "I think 2026 and 2027 are gonna be great years." He went on to say "in the first quarter of next year, we are going to see substantial tax refunds for working Americans," and that withholding levels will be reset, and "they will have substantial real income increases." He also cited that "energy prices are down," and that "housing prices are a lagging indicator, especially in rates," inferring that we'll see relief their as well.

He also said that "we could see that the CPI numbers start coming down next month, the month after."

We'll actually get a chance to look at the CPI numbers this morning. Even though the Consumer Price Index (CPI ? retail inflation) was supposed to be released last week, but was delayed due to the government shutdown, it will finally be released this morning. The consensus for the headline number is 0.4% m/m vs. last month's 0.4% pace, with the y/y rate at 3.1% vs. last month's 2.9%. The core rate (ex-food & energy) is expected to come in at 0.3% m/m, in line with last month, with the y/y rate at 3.1%, also in line with last month.

We'll also get the PMI Composite report, New Home Sales, and the Consumer Sentiment report.

All of the major indexes are on pace to close higher for the week.

If so, that'll make it the second up week in a row.

Best,