The market was so quiet last week that it was easy to sleep through the fact that the Dow Jones Industrial Average ($INDU) tiptoed past 11,400 -- a level last seen in September 2008.
Indeed, the blue-chip index is up a respectable 9.4% for the year to date. The broader S&P 500 ($INX) has gained 11%. And the tech-heavy Nasdaq Composite ($COMPX) is up more than 16% so far in 2010.
Whether stocks can add to those impressive results this week all comes down to a heavy docket of economic news, says Kenny Polcari, managing director at interdealer broker ICAP Corporates.
"It's a big, big week ahead of us," Polcari says. "All eyes will be on the macro news because a lot of the macro news that's been coming out globally, not just in the U.S, is pointing to better days ahead."
Potentially market-moving economic releases on tap this week include consumer prices, producer prices, housing starts, November retails sales, leading indicators, a couple of regional manufacturing surveys and the last meeting of 2010 for the Federal Reserve's rate-setting committee. And don't forget the high-stakes political wrangling in Washington over the Obama-GOP tax cut deal as it heads for a vote in Congress.
But Polcari won't fret if the market snoozes through -- or even pulls back -- on the macro headlines pouring out this week. Rather, he'd actually welcome it.
"I would like to see the market take a breather because we are at the high end of this range, and I think it's been a little artificially inflated [by QE2]," Polcari says. Once the spike in bond yields settles down, he adds, the market will have a better base for further gains, anyway.
For more on Polcari's view from the floor of the New York Stock Exchange (NYX), see the video above.
Introduction to Economic Indicators
Measure the performance of the economy.View Course »