While markets are busy with Trump tweets and geopolitics, one strategist says two catalysts are being left by the wayside.
Economics and earnings will give stocks their next leg up this year, according to Kate Warne, investment strategist at Edward Jones.
"We think first investors really aren't paying attention to the fact that the budget deal that went through Congress earlier this year adds government spending as a pillar for economic growth," Warne told CNBC's "Trading Nation" on Tuesday.
President Donald Trump's election lifted hopes of increased infrastructure spending, deregulation and possible tax cuts.
"What wasn't expected was Congress would reach a deal that instead of keeping deficits at a relatively constant level, that we'd actually see deficit spending increase especially so late in the economic cycle," she said. "That is a surprise compared to what was baked in."
Trump signed a $1.3 trillion spending bill in March that bumped defense spending up by $80 billion and increased domestic spending by $63 billion.
"That's part of why we expect slightly stronger economic growth later this year," said Warne. "I don't think it's really been taken into account because we don't know where the government is going to spend."