Starting the second half of the year, there is the equivalent of a "Santa Claus rally." The market has delivered positive returns 72 percent of the time during the last two days of June and the first five days of July, according to Brooke Thackray, author of "Thackray's Seasonal Investment Guide."
Longer term, it's pretty clear what we need in the second half: more growth. Equities are pricing in a robust second half of gross domestic product (GDP) growth. Estimates are all over the place, but most traders seem to be counting on at least 3.5 percent growth for the next two quarters.
Meanwhile, U.S. economic data is still mixed. There's a gap between manufacturing numbers (which are very healthy) and other metrics (GDP, durable goods), but for the moment that market is believing the good news.
Speaking of manufacturing, China's June PMI was in line with expectations, but definitely showing improvement at 50.7, up from 49.4 in May, but the new orders components was the strongest in 15 months. Copper is at a 3-month high, as China consumes about 40 percent of the world's supply.