Earnings season begins with hopes for improving guidance.
We start earnings tomorrow with Alcoa. The hope is that an improving economy will lead to a better outlook for corporate profit.
A lot of issues holding back guidance are gone: there's less drama in Washington while Obamacare is still a mess but getting worked out. Meanwhile, economic data points, with some exceptions, are improving.
Europe is doing better. There is considerable expectations that the global part of earnings for multinational corporations should be stronger.
As for 2013, full year earnings are expected to be up a respectable 5.8 percent, revenue up 1.8 percent, according to S&P Capital IQ.
The narrative for the last few years has been, this can't continue; we can't continue to have this gap between earnings growth and revenue growth. The hope is that this will change this year, and that revenue growth will at least double to roughly four percent.
The strong December ADP Report (best since November 2012) with an upward revision for November, is another positive data point. S&P futures came off their lows on the report.
Two percent gross domestic products (GDP) is the "new norm" but yesterday's trade deficit numbers were so surprising (strong exports, fewer imports) that there were GDP revisions right across the board. Morgan Stanley and Barclays now have Q4 GDP growth of at least three percent; Deutsche Bank is at four percent.
Today Ed Hyman at ISI raised the firm's GDP estimate to three percent as well.
The verdict so far in 2014: in with southern Europe, out with emerging markets.
Wednesday was another big day in the European periphery. Greece, Portugal, Italy and Spain up again, while Germany and France fell. This is the fifth day this has been happening. Greece has logged what used to be a whole year's gains in 5 trading days:
Peripheral debt has also had a monster rally but I think the cheer is a bit premature. For example, Italy's unemployment rate hit 12.7 percent in November, a new high. Meanwhile, emerging markets are off to a terrible start, led by China. Note the following exchange traded fund (ETF) performances:
The weakness in China is weighing on commodity stocks here in the U.S.: the is down 4.2 percent this year, the is down 5.1 percent.
—By CNBC's Bob Pisani