Stocks closed mostly higher yesterday. Not by much, but higher nonetheless.

YTD, the returns are still uneven with the Dow up 3.06%; the S&P off -0.03%; the Nasdaq down -2.86%; the small-cap Russell 2000 up 6.64%; and the mid-cap S&P 400 up 7.94%.

Tech was the big winner last year. They have lagged so far this year. But I'm still expecting another big double-digit gain again for the tech-heavy Nasdaq and S&P. And stellar gains for the others indexes as well, as the bull market broadens on strong earnings, and economic data.

Some of that economic data was seen last week with Friday's better-than-expected Consumer Price Index (CPI ? retail inflation) report. Once again, it showed inflation easing with the headline number coming in at 2.4% y/y vs. last month's 2.7% and estimates for 2.5%. The core rate (ex-food & energy), eased to 2.5% y/y vs. last month's 2.6%.

We also got a better-than-expected Employment Situation report a couple days prior, which showed 130,000 new jobs being created in January (172,000 in the private sector and -42,000 in the public) vs. the consensus for 70,000 (75K private and -5K public). And when looking at just the private sector, job growth more than doubled expectations. Additionally, the unemployment rate eased to 4.3% vs. last month's 4.4%, while the participation rate rose to 62.5% from 62.4%.

GDP is also looking strong. Q3'25 GDP came in at 4.4%. Q4'25 is pacing at 3.7%, according to the Federal Reserve Bank of Atlanta's GDPNow forecast. And U.S. Secretary of Commerce Howard Lutnick is suggesting the economy could grow by as much as 6% in Q1'26.

I would expect Q2 to be a juggernaut as well, in part fueled by the upcoming tax season and the expectation for large refund checks. Kevin Hassett, the National Economic Council Director said, "we are going to see the biggest refund cycle in the history of America, and people are going to get massive refund checks," and that "the numbers are striking."

He was referring to the tax provisions passed last year that are retroactive to the beginning of 2025. That includes a higher standard deduction, bigger SALT deductions, no tax on (a portion of) tips, no tax on (limited) overtime, a senior bonus (which lowers tax on a portion of social security benefits for qualified recipients), and more.

Corporate America will also feel the benefit. Not just with more money in consumers' pockets (after all, roughly 70% of GDP consists of consumer spending), but also from increased R&D expensing, accelerated CapEx expensing, interest deduction relief, and enhanced small-business expensing.

And I'm expecting further interest rate cuts to spur on even more economic growth. Odds favor the next cut to come in June. (Current Fed Chair Jerome Powell's term ends in in May, and the new nominee, Kevin Warsh, is expected to push for cuts in the first month he's at the helm.)

In other news, last week's partial government shutdown does not seem to be having an impact on the market. And rightly so. Even last year's record-long shutdown had minimal impact.

Earnings season continues today with another 181 companies on deck to report, including Analog Devices, Booking Holdings and Carvana to name a few.

Tomorrow is even bigger with 234 companies set to report, including retail powerhouse Walmart.

In the meantime, most of the major indexes are within striking distance of their all-time highs. Some good news on the economic and earnings front could send then soaring to new all-time highs.

See you tomorrow,