The Dow ended the week with a gain of 1.5 percent, at 19,152, finishing at an all-time high. The S&P 500 was up 1.4 percent for the week at 2,213, and the Nasdaq was up 1.5 percent at a record 5,398. The small-cap Russell 2000 ended the week up 2.4 percent at 1,347, and finished Friday with its 15th straight gain.
"You've seen some very big moves in stock prices, down in utilities and a large move up in financials and industrials. The overall market has been able to make progress but the sector rotation has been tremendous. We're in the seasonally strongest time of year now. There had been a lot of apprehension about the election. Now there's going to be performance chasing," said Steven Wieting, global chief strategist at Citi Private Bank.
"I think that is not something that continues for too long. If you look at what's happened on rates and interest rate volatility, you can't keep going up 50 basis points on rates just on expectations and not expect it to affect other asset classes."
Wieting said he has therefore become a bit more cautious on the market. "I think the optimism about the U.S. at least from a fiscal policy standpoint makes some sense," he said, but noted there are more concerns about Europe.
"We took international equities down and kept U.S. at neutral rating and decreased duration in bond portfolios and kept underweight in fixed income and raised cash," said Wieting. "Mostly where we cut was European equities away from the U.K. and stocks in Southeast Asia."
The Italian constitutional referendum is scheduled for Dec. 4 so markets may focus on Europe ahead of that vote, though at this point it is not expected to have immediate major market impact even if the vote is no, as expected. In that case, Prime Minister Matteo Renzi has vowed to resign if reforms are rejected and there would be a general election.
But it's the combination of that and other European elections that could cause worry if candidates favor a move away from the euro.
"Europe I would say, from next month throughout the coming year, the political calendar is really agonizing. ... On Dec. 4, you're not only going to have the Italian referendum but an Austrian election. Political cohesion in the euro zone is more important than it is in the U.S. and U.K. which have their own currencies. When you think about the French election, the Dutch election, German elections next year, we just wanted to take a step back" Wieting said.
Markets have been watching Donald Trump's Cabinet choices with much more interest than usual because there is more uncertainty around what type of policies he will ultimately pursue. He is a different sort of president-elect, as a Washington outsider. The businessman made promises that analysts see as big growth catalysts, like the tax cuts and spending plans, but they also see some of his campaign talk on trade as protectionist.
"If he shuts the borders because the anti-trade Trump comes out, we'll have a recession and the market will go down. If that side stays quiet, and he cuts taxes, it could be up a lot ... I don't know what Trump we elected," said Bob Doll, chief U.S. equity strategist at Nuveen Asset Management.
"It's always a weird time when you change administrations from one party to the other. it's also weird because of who we elected — a nonpolitician who was all over the place during the campaign so uncertainty is still there," he said.
Doll said he expects the "growth" Trump to prevail, but that's still not clear. Under the new president, he said stocks should do better than bonds and he expects the market to end the year higher.
"With seasonality, more likely it's going to be higher than where we are. I hesitate because we've run so hard for the last couple of weeks. Maybe we take a breath and then we come on with a year-end rally. I don't know. But I can't believe it would (go) straight up to the end of the year," he said.
There is also Chinese data, with industrial production Sunday and PMI on Thursday.