Stocks closed higher again yesterday, adding to Wednesday's sharp gains. Both the small-cap Russell 2000, and mid-cap S&P 400 made new all-time highs in the process.

On Wednesday, stocks rallied on easing tensions over Greenland. President Trump, speaking at the World Economic Forum (WEF), in Davos, Switzerland, said he "won't use force" on Greenland. And then later in the day, after meeting with NATO members, he said they have "formed a framework of a future deal with respect to Greenland," and that he would "not be imposing the tariffs that were scheduled to go into effect on February 1^st."

In other news, yesterday's third and final estimate for Q3'25 GDP came in at 4.4%, up from last month's 4.3% and views for the same.

Weekly Jobless Claims rose 1,000 to 200K, but was under the consensus for 205K.

Corporate Profits (after-tax) rose 4.3% y/y vs. last month's 2.4% pace. With Inventory & Consumption Adjustments it was at 10.8% y/y vs. last month's 10.5%.

We also got two Personal Consumption Expenditures (PCE) index reports. Both are look-backs to October and November, which were delayed due to last year's government shutdown.

October showed headline inflation up 0.2% m/m, in line with September. On a y/y basis it was at 2.8% vs. September's 3.0%. The core rate (ex-food & energy) was up 0.2% m/m, in line with September, while the y/y rate was at 2.8% vs. September's 3.0%.

November headline inflation was at 0.2% m/m, same as October. The y/y rate was at 2.7%, down from October's upwardly revised 2.9% (originally 2.8%). The core rate was at 0.2% m/m, also same as October. The y/y rate was at 2.8%, also down from October's upwardly revised 2.9% (originally 2.8%).

All in all, the latest round of PCE data showed inflation moderating. Not by much. But easing nonetheless. And that too comes as a relief. Especially as earnings rise and GDP accelerates. Not only is Q3'25 hotter-than-expected (the original estimate started at 'just' 3.2%, and it's now 4.4%), but Q4'25 is forecasted at 5.4%.

Earnings season continues. Yesterday, before the open, GE Aerospace posted a positive EPS surprise of 9.03%, and a positive sales surprise of 5.38%. That translated to a quarterly EPS growth rate of 18.9% vs. this time last year, and a sales growth of 20.1%. They were off -7.38% yesterday. (For context, they were up 84.7% last year.)

After the close, Intel posted a positive EPS surprise of 87.5%, and a positive sales surprise of 2.29%, for a quarterly EPS growth rate of 15.4%, and a sales growth of -4.14%. They were up 0.13% in the regular session before earnings, but were down by -11% in after-hours trade post-earnings. (For context, they too were big winners last year, gaining 84.0%.)

Today we'll hear from another 23 companies, including Booz Allen Hamilton, and Moog.

Next week kicks into gear with more than 470 companies on deck, including 3 of the Magnificent 7 stocks (Microsoft, Tesla and Apple), along with other widely held names like Texas Instruments, Starbucks, and IBM.

With one more day to go, most of the indexes are up for the week, including the Dow, the Russell 2000, and the S&P 400. The S&P 500 and Nasdaq are just under the mark, but it won't take much to get them into the green as well.

So far, the small-caps and mid-caps are leading the charge. If they close up for the week, that'll make it 3 up weeks in a row for them.

Best,