Stocks closed higher yesterday across the board. The small-cap Russell 2000 led the way with a 1.66% gain. But the Nasdaq was close by with 1.58%, followed by the mid-cap S&P 400 with 1.24%, and the S&P 500 with 1.08%.

The market rotation/breadth expansion trade appears to be intact. While investors pare back allocation in large-cap tech/AI names, small-caps and other previously overlooked mid-cap and large-cap stocks are seeing new investor interest. And that's bullish for the market.

Even though there's a lessening of big-tech/AI positions, that trade is not dead. This rotation is not an abandonment, simply a reallocation in an over-crowded, over-invested trade, until the next leg-up.

Yesterday's Chicago Fed National Activity Index came in at 0.05 vs. last month?s upwardly revised 0.23 (from 0.18) and views for 0.10.

Today we'll get Existing Home Sales, and the Richmond Fed Manufacturing Index.

The economic calendar fills up as the week goes on. But the report everybody is really waiting for is Friday's Personal Consumption Expenditures (PCE) index. That's the Fed's preferred inflation gauge. And it'll be the last inflation report we get before the Fed meets on July 30-31.

While nobody is expecting the Fed to cut rates next week, it will help inform their outlook on if they foresee a cut coming in September or further out like November or December.

Earnings season continues this week. Today we'll get another 146 companies on deck to report, including Coca-Cola, Philip Morris and GE Aerospace before the open, and Alphabet, Tesla and Texas Instruments after the close.

We'll also see if the market can build on yesterday's gains.

With a resilient economy, earnings season in full swing, and sales and earnings estimates on the rise, it looks like there's plenty more upside to go.

Then add in the cyclical trend that shows stocks typically perform well during Presidential election years (in fact, the 4-year Presidential Cycle shows that year 4 (that's this year), is the second-best year of all four years -- second only to year 3, which was last year when the S&P gained 24.2%), and the odds look even better for more gains to come.

See you tomorrow,