What to Watch
There is a batch of important data in the coming week, starting with existing home sales Monday, then the third look at third-quarter GDP, durable goods and personal consumption Tuesday, and weekly jobless claims on Wednesday.
"The consensus is GDP is up a few tenths, 4.2 percent with another upward revision," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi. "It's really more important to see what's going on with the fourth quarter. It almost feels like Fed officials need to see 3 percent GDP to inch closer to rate liftoff."
For that reason, he is focused on Tuesday's personal consumption and spending and the inflation gauge within that indicator. "Yellen said actual inflation isn't that important. It's the outlook. I don't think the market buys that. The market is thinking there's some kind of deflation out there. We want to see what the PCE/deflator, the core is going to do on Tuesday," said Rupkey.
The Treasury curve continued its flattening move in the past week. The two-year note was yielding 0.638 late Friday, and the 10-year was at 2.16, up from the 2.10 it was at the week earlier.
"The best economy in the world has the highest yields. It's bringing in some buying," Rupkey said. "The yield curve runs mostly off of the expectations for Fed policy. It is still flattening since the Fed meeting Wednesday. The market seems to have the message that the Fed is going" (to hike rates).
The market generally expects the Fed to raise rates from zero for the first time after the first half of 2015.
Levkovich said the stock market should not run into problems when the Fed makes its initial hike next year, and he expects the S&P 500 to reach 2,200 by the end of 2015.
The decline in oil should be a net positive, he said. "My concern about energy is not about (lost) jobs," he said. "My focus is mainly around the idea that if credit markets get disrupted enough by it, does it raise the cost of capital for everybody. … We don't want a leaching out of higher capital costs to the rest of the community."
"It's a net positive in terms of the consumer and the public is getting a massive improvement," he said. High-yield energy corporate debt continued to get hit hard this past week.
As for companies in the sector, they will feel the pinch from lower prices but other companies could as well, he said. Traders sought bargains in energy stocks this past week, pushing the S&P energy sector 9.2 percent higher.
Read MoreHoward Marks: Oil prices expose 'debt's weaknesses'
"There will be ripple effects into other industrial companies that have greater energy exposure than even the managements know," he said. "If we pulled back on rig activity globally then you'll have fewer helicopter rides, fewer aerospace parts for those helicopters. … The industrial companies are not necessarily aware of how big their energy exposure is."
1000 am Existing home sales
0100 pm $27 billion two-year note auction
0830 am Durable goods
0830 am Real GDP Q3 (third)
0900 am FHFA home price index
0955 am Consumer sentiment
1000 am Personal income
1000 am New home sales
0100 pm $35 billion 5-year note auction
0830 am Initial claims
1130 am $29 billion 7-year note auction
0100 pm Stock markets close
Christmas Day holiday
U.S. markets reopen