Come on, admit it: you didn't think we'd hit historic highs this week, did you?
I didn't. I expected post-Brexit caution would color the bank commentary (but it didn't happen), in-line economic stats (but Retail Sales and Industrial Production were well above consensus), and a continuing cautious IPO market (but the biggest IPO of the year opened up better than 25 percent, and 5 additional companies announced they would be going public soon).
The biggest surprise was the bank earnings commentary. They all beat, and while there was the usual concern about net interest income being soft to the flatter yield curve and low rates, the other trends were all positive.
Credit is improving. Loan growth is improving. And—most surprising of all—guidance was steady.
And there was surprisingly little commentary on Brexit, even from Citigroup.
What's next? We need to hear from companies outside the banking space.
I want to hear from big Technology companies like Microsoft, which reports on Tuesday and which gets 55 percent of its sales outside the U.S., including nearly 10 percent from mainland China. I want to hear about global electronics and cell phone sales trends from Intel on Wednesday, which gets 80 percent of its revenues outside the U.S., including 20 percent from mainland China.
And I want to hear from a big Industrial like General Electric, which reports on Friday, which gets 55 percent of revenues outside the U.S.
I wouldn't be surprised to see some kind of pull-back next week. We are seeing a modest pullback today in banks, which is very typical immediately after bank earnings season begins.
But if the commentary for stocks like Microsoft, Intel, and General Electric avoid the need for analysts to notably cut earnings expectations for the second half, I would expect any pullback to be rather short and shallow.