Stocks closed sharply higher yesterday with all of the indexes up 1.25% or higher. The small-cap Russell 2000 led the way with a 2.45% gain, followed by the Nasdaq with 2.34%.

Better than expected Retail Sales data set the tone for the day, as it showed a 1.0% m/m increase vs. last month's -0.2% and views for 0.3%. Ex-Vehicles it was up 0.4% vs. last month's 0.5%, while beating expectations for 0.1%. Ex-Vehicles & Gas it was up 0.4% vs. last month's 0.8% and estimates for 0.3%.

That helped allay fears of an economic slowdown after the previous week's weaker than expected employment report.

Since then, plenty of economic reports have shown the U.S. economy to be resilient.

Yesterday's retail earnings also underscored the narrative of a strong economy, countering the idea that we were headed for a recession.

Before the open yesterday, Walmart posted a positive EPS surprise of 3.08%, and a positive sales surprise of 0.49%. That translated to a quarterly EPS growth rate of 9.84% vs. this time last year, and a sales growth of 4.8%. They also raised their sales growth outlook for 2025 from a median estimate of 3.5% to 4.25%, while their earnings outlook was raised from a median estimate of $2.17 to $2.39 for a 10.1% upward revision. They were up 6.58% on the day.

Today we'll get another 69 companies on deck to report including Flowers Foods, The Buckle and Madison Square Garden Entertainment to name a few.

In addition to yesterday's better than expected Retail Sales report, we also got a better than expected Weekly Jobless Claims report which fell by -7,000 to 227K vs. the consensus for 234K.

The Philadelphia Fed Manufacturing Index, however, fell to -7.0 vs. last month's 13.9 and views for 5.8.

Although, the Empire State Manufacturing Index improved to -4.7 vs. last month's -6.6 and estimates for -6.0.

Industrial Production declined -0.6% m/m vs. last month's 0.3% and the consensus for -0.1%. Manufacturing Output slipped -0.3% vs. last month's 0.0%, but in line with expectations for -0.3%. The Capacity Utilization Rate came in at 77.8% vs. last month's 78.4% and the forecast for 78.6%.

Business Inventories were up 0.3%, just under last month's 0.5% pace, but in line with expectations.

And the Housing Market Index slipped to 39 from last month's 41 and the consensus for 42.

Today we'll get the Housing Starts and Permits report, and Consumer Sentiment.

We'll also hear from Austan Goolsbee, President of the Federal Reserve Bank of Chicago.

With one more day to go, all of the indexes are on pace to close higher for the week.

What a difference a week makes.

Best,