We start with stocks on the downside—and some of this may be tax related. Several traders told me that many were reluctant to book any profits for taxes: after all, why pay taxes now when you can pay them a year and a half from now? Also, nobody has losses to pair them off on.
Chinese manufacturing data was weaker than expected, but here in the U.S most indicators are well into bullish territory: major indices are at or near historic highs, while the Investors Intelligence newsletter shows sentiment is relatively high (62 percent bullish, highest since October 2007).
Perhaps most importantly, Washington is far less a worry it was a year ago, as a budget deal is now in the offing. Incoming Federal Reserve chair Janet Yellen is continuing Ben Bernanke's policies, and there are lower deficit projections. All these are tailwinds for stocks.