Greece saga fades, investors look at the economy

Economic growth and interest rates will regain the spotlight next week as investors can most likely put Greece behind for a few months.

"Now the market can begin to concentrate on stimulus beginning next month in the euro zone," said Peter Cardillo, chief market economist at Rockwell Global Capital.

Greece and euro zone finance ministers reached deal on Friday to extend the Greek bailout by four months. To finalize the extension plan, Greece must formally present a list of agreements on Monday, which analysts said was not a difficult requirement to meet.

Investors will also focus on the U.S. Federal Reserve as the central bank's chair, Janet Yellen, is expected to testify before both houses of Congress on Tuesday and Wednesday.

Traders work on the floor of the New York Stock Exchange.
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Traders work on the floor of the New York Stock Exchange.

Federal Open Market Committee members "really want to start the normalization process but they don't want markets to plunge," said Bob Baur, chief global economist for Principal Global Investors.

Fed minutes from the January meeting released this past Wednesday showed a more dovish central bank than analysts expected.

However, underlying strength in U.S. economic data still gives many market watchers the expectation that an interest rate hike will come as early as this summer.

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Bill Stone, chief investment strategist at PNC Wealth Management, said he still sees a rate hike in July, based on good economic data.

"I think the minutes reflect that they are open-minded to change if things weaken considerably," Stone said.

To be sure, the U.S. economy is still growing slowly. Wall Street expectations according to Reuters are for revised 2.1 percent growth in the fourth quarter, down from the prior quarter's 3.9 percent.

"It appears that GDP will be revised down substantially," said Baur. But I "think it's already worked into the market."

U.S. stocks rallied on Friday to close at highs on an 11th-hour resolution between Greece and its creditors in the euro zone, temporarily settling weeks of negotiations.

The Dow Jones industrial average ended up more than 150 points to 18,140.44, its first record close for 2015.

The S&P 500 ended the week at 2,110.30, its third record close for the year. The Nasdaq also ended higher, at 4,955.97.

"This obviously is a relief for the markets," said Peter Cardillo, chief market economist at Rockwell Global Capital. "Looks like my 2,125, 2,150 (on the S&P 500) is likely to be achieved early next week."

"All in all," said Jack Ablin, chief investment officer at BMO Private Bank, it "looks like the global economy may be turning for the better." He highlighted weak areas such as Europe and Japan as "moving together to the upside."

Marc Chaikin, CEO of Chaikin Analytics, also expects markets to go higher.

The "markets are on very solid footing," he said. "With earnings out of the way there's not much to stimulate the market until April."

Oil continues to be a weak spot in markets, as WTI crude settled down 82 cents to $50.34 a barrel on Friday. Energy was the only sector to close in the red in the S&P 500.

Read MoreAnother Greek bailout on the way?

The U.S. 10-year Treasury note yield edged up on Friday to as high as 2.13 percent on the Greek deal.

Baur said without concerns about deflation in Europe, the 10-year yield should be 3 percent and recommended instead to put money into shorter-duration bonds.

On tap next week:


Earnings: BHP Billiton, HSBC, Dish Networks, Agrium, ExpressScripts, Tenet Healthcare, Texas Roadhouse

8:30 a.m.: Chicago Fed National Activity

9:45 a.m.: PMI Services Flash

10:00 a.m.: Existing home sales

10:30 a.m.: Dallas Fed manufacturing survey


Earnings: Comcast, Home Depot, AmericanTower, Bank of Montreal, Macy's, Toll Brothers, Cracker Barrel, Domino's Pizza,Hewlett-Packard, Boston Beer, Dreamworks Animation, First Solar, Papa John's(tentative), WebMD Health

9:00 a.m.: S&P Case-Shiller HPI

10:00 a.m.: Consumer Confidence

10:00 a.m.: Janet Yellen speaks

10:00 a.m.: Richmond Fed manufacturing index

1:00 p.m.: Two-year note auction


Earnings: Lowe's, Campbell Soup, ChesapeakeEnergy, Dollar Tree, Target, TJX, SodaStream, L Brands, Liberty Media,, Transocean, Workday

7:00 a.m.: Mortgage Applications

10:00 a.m.: New Home Sales

10:00 a.m.: Janet Yellen speaks

10:30 a.m.: Oil inventories

1:00 p.m.: Five-year note auction


Earnings: A-B InBev, Kohl's, Chico's FAS,SeaWorld, Autodesk, Gap, Ross Stores, United Health Services, Herbalife, JCPenney, Live Nation Ent., Splunk, Weight Watchers

8:30 a.m.: CPI

8:30 a.m.: Durable Goods orders

9:00 a.m.: FHFA Home Price Index

10:30 a.m.: Natural gas inventories

11:00 a.m.: Kansas City Manufacturing Index

12:40 p.m.: Fed's Lockhart speaks

1:00 p.m.: Seven-year note auction

4:30 p.m.: Fed balance sheet/money supply


8:30 a.m.: GDP

9:45 a.m.: Chicago PMI

10:00 a.m.: Consumer Sentiment

10:00 a.m.: Pending Home Sales

10:15 a.m.: Fed's Dudley speaks

10:15 a.m.: Fed's Mester speaks

1:30 p.m.: Fed's Fischer speaks

3:00 p.m.: Farm prices