Stocks closed mixed yesterday with the big 3 indexes in the green, while the small-cap and mid-cap indexes were in the red, albeit modestly.

Stocks were under pressure before the open after President Trump, over the weekend, said he would impose a 100% tariff on Canadian goods if Canada signs a deal with China that the U.S. believes could result in a "drop-off port" for Chinese goods to make their way to the U.S. and bypass tariffs.

Canadian Prime Minister Mark Carney on Sunday, however, said he has "no intention" of pursuing a free trade agreement with China.

That seemed to be enough for stocks to open the regular session yesterday in the green.

Although, after the close, President Trump said he would be increasing tariffs on South Korea from 15% to 25% on autos, pharmaceuticals and lumber, along with all other reciprocal tariffs, due to a delay in their legislature approving last year's agreed upon trade deal.

Also after the close, the Administration proposed a significantly lower rate increase for Medicare Advantage plans next year with only a 0.09% increase vs. the 4-6% that analysts were expecting. While this is for 2027 plans, insurers fell in after-hours on the news.

In other news, late last week, the House passed the last of the 12 appropriation bills to keep the government open and avoid a shutdown before the January 30 deadline. They appeared to be headed for relatively smooth sailing in the Senate. But events over the weekend have created uncertainty over whether some of those bills can get passed. They have passed 3 already. Most of the others seem likely to pass. But the Homeland Security bill suddenly looks tougher.

This week, earnings should be the main event with more than 480 companies on deck to report, including 4 of the Magnificent 7 stocks (Microsoft, Meta and Tesla on Wednesday 1/28, and Apple on Thursday 1/29).

On the economic report front, yesterday's Durable Goods Orders showed New Orders up 5.3% m/m vs. last month's -2.1% and views for 3.0%. Ex-Transportation it was up 0.5% vs. last month's 0.1% and estimates for 0.3%. Core Capital Goods were up 0.7% vs. last month's 0.3%.

The Chicago Fed National Activity Index for October slipped to -0.42 vs. September's -0.04. The 3-month average came in at -0.34 vs. September's reading of -0.23. But for November, it reverted back to September's numbers, coming in at -0.04 for the month, and the 3-month average coming in at -0.23.

And the Dallas Fed Manufacturing Survey improved, showed the General Activity Index at -1.2 vs. last month's -11.3, while the Production Index was at 11.2 vs. last month's -3.0.

Today we'll get the Case-Shiller Home Price Index, New Home Sales, the Richmond Fed Manufacturing Index, and Consumer Confidence.

Looking ahead, Wednesday is the FOMC Announcement. Virtually nobody is expecting the Fed to cut rates this week (odds are only at 4.4%). Although, the likelihood increases to 15.4% in March, 29.4% in April, and 60.6% in June (when the new Fed Chair is expected to replace current Chair Jerome Powell after his term expires in May).

You can be sure everybody will be listening to Mr. Powell's Press Conference afterwards for insight on the Fed's outlook on inflation, economic growth and future rate cuts.

The Announcement comes out at 2:00 PM ET, with the Press Conference at 2:30.

In the meantime, we'll see if the market can build on yesterday's gains.

See you tomorrow,