Stocks closed higher yesterday, led by the small-cap Russell 2000 and mid-cap S&P 500 with 0.86% and 1.20% respectively. And each one made new all-time highs. (The tech-heavy Nasdaq was up as much as 1.06% intraday, before settling with 0.25%.)

Both small-caps and mid-caps are on a tear this year gaining 6.67% and 6.41% YTD. And we're only 10 trading days in.

Yesterday's before-the-open earnings from Taiwan Semiconductor lifted the market after posting a positive EPS surprise of 11.35%, and a positive sales surprise of 1.39%. That translated to a quarterly EPS growth rate of over 35% vs. this time last year. CFO Wendell Huang said "we expect our business to be supported by continued strong demand for our leading edge process technologies." They were up 4.44% on the day.

Interestingly, the U.S. and Taiwan (which is where Taiwan Semiconductor is headquartered) reached a trade agreement where Taiwanese semiconductor companies will provide $250 billion in direct investment in the U.S., and another $250 billion in credit guarantees to support supply-chain expansion. And they'll establish U.S. based industrial parks for Taiwanese firms.

Back in the 1990's chip fabrication was as high as 37% in the U.S. It has since fallen to less than 10%. This aims to reverse a portion of that trend. One of the key incentives is that Taiwanese firms that build new U.S. chip capacity can import up to 2.5x that planned capacity tariff-free during construction. And 1.5x new capacity after completion.

We got more bank earnings yesterday.

Before the open, Morgan Stanley posted a positive EPS surprise of 11.2%, and a positive sales surprise of 3.30%. That equated to a quarterly EPS growth rate of 20.7%, and a sales growth of 10.3%. They were up 5.78%.

Goldman Sachs posted a positive EPS surprise of 19.03%, and a negative sales surprise of -1.14%, for a quarterly EPS growth rate of 17.2%, and a sales growth of -3.0%. They were up 4.63%.

And BlackRock posted a positive EPS surprise of 6.21%, and a positive sales surprise of 3.88%, for a quarterly EPS growth rate of 10.31%, and a sales growth of 23.5%. They were up 5.93%.

Today we'll hear from more banks including Regions Financial, PNC Financial Services, and State Street, to name a few.

Yesterday's Weekly Jobless Claims fell -9,000 to 198,000 vs. the consensus for 212,000.

The Philadelphia Fed Manufacturing Index rose to 12.6 vs. last month's -8.8 and views for -3.5.

And the Empire State Manufacturing Index also rose, coming in at 7.7 vs. last month's -3.7 and estimates for 1.0.

Today we'll get Industrial Production, and the Housing Market Index.

We'll also hear from Fed policymakers Susan Collins, Michelle Bowman, and Philip Jefferson as they speak at their respective engagements throughout the day.

While earnings season has unofficially already begun, it 'officially' begins next week when Alcoa reports on Thursday, 1/22, after the close.

Earnings season really heats up the following week when we'll get 3 of the Magnificent 7 stocks on deck to report (Microsoft, Tesla and Apple), along with other widely held names like Texas Instruments, Starbucks, IBM, ServiceNow and Caterpillar, to name a handful.

With one more day to go, the small-cap Russell 2000 and mid-cap S&P 400 are both poised to close up for the week. While the big 3 indexes are still in the red for the week, it won't take much to get them in the green as well.

Best,