"Far and away the best prize that life has to offer is the chance to work hard at work worth doing." -- President Theodore Roosevelt

Bam

It is still early. Mad early, but earnings do seem better. Mad better. Hot numbers from the likes of American Express (AXP) , CSX (CSX) , Qualcomm (QCOM) , Blackstone (BX) , KeyCorp (KEY) , Sherwin Williams (SHW) , and Snap-On (SNA) set up yesterday's winning touchdown drive. The fact that this better data come from across many business lines has not been lost on investors. The EPS (earnings per share) beat rate vs. expectations is running at about 75%. That can be manufactured, you say? Sure it can, but this beat rate is toward the high end of what is considered normal. On top of that, earnings growth, for which expectations had been ratcheted down to a rough 9.1% y/y prior to the season, is skating along at a cool 10.8% for now.

Bam

Vive la France! Are investors worried about the coming election in France? Suddenly, it doesn't look like it. The CAC 40 ran 1.5% yesterday, far ahead of the rest of the European region. Some of this outperformance is being unwound this morning in the wake of yesterday's terrorist attack, but I think markets are less rattled going into this election than they were prior. Are they confident in the outcome? Are they confident that the outcome could bring with it an opportunity to buy shares at a discount, as was the case regarding both the U.S. presidential election, and the Brexit referendum in the U.K.? Reasons are not results. How about we let you know more on this later, but the fact that there is less fear is clear.

The Closer

Enter Sandman. Tax cuts, healthcare, tariffs on steel, oh my! All maybes. All hot again. With the game on the line, there is no doubt. As a fan, you want to see Secretary of the Treasury Steve Mnuchin warming up in your team's bullpen. Mnuchin said yesterday that his department is "pretty close to being able to bring forward major tax reform." Oh. yeah. Mnuchin added: "This will be the most significant change to the tax code since Reagan." Get some. Mr. Secretary added the words "very soon", and then he told us that the plan "will pay for itself". I can't take it anymore ... take 'em. What's offered now? Take those! Stay on the bid, don't let it come in. If you do, you're hooked. Ladies and gentlemen ... the crowd goes wild.

Just days after seemingly throwing water on the idea of seeing any kind of tax reform anytime soon, Steve Mnuchin got folks ramped up about the idea, and he even indicated that this plan will not be reliant on healthcare reform. Wall Street likes that. Likes that a lot! Heck, folks, your 401Ks and your IRAs like that.

Bang! Financials ran 1.7%, led by consumer finance and the banks.

Bang! Industrials ran 1.2% led by the transports (+1.7%).

Bang, Bang and Bang! Materials ran 1.1%, discretionary stocks ran 1%, and info tech ran 1%.

Basically, kids, if you play this sport, you went to bed a little richer last night than you woke up yesterday morning. That is unless you came in short the market; then you went home bloody. For you, today is another day. You were saved last night by a hefty MOC imbalance that put pressure on the key 2356 level for the S&P 500. That level will likely matter again early this morning. Let the games begin. Don't forget to tape on the foil.

Pulling a Rabbit Out of This Hat

If Steve Mnuchin was batting clean-up yesterday, the President himself was hitting third in the order. The president ordered a probe into whether or not steel imports from China and other countries actually hurt national security. Can you say tariffs on this slice of the materials business are likely on the way? Can you say that Nucor (NUE) , US Steel (X) , and AKSteel (AKS) all easily outperformed markets that were themselves performing very well? The NYSE MKT Steel Index ran 3.7%. Can the president top that? He can try.

Today, we expect President Trump to sign an executive order that will direct Treasury to review significant tax regulations issued just last year in order to determine if any of them impose undue tax burdens on the American taxpayer, or exceed statutory authority. This can only have a positive outcome from my point of view. Is that all? No.

The president is also expected to sign two memoranda today that will ask Treasury to review the Orderly Liquidation Authority and the Financial Stability Oversight Council. What does this mean to you and me? Simply means that he's going after Dodd-Frank today. Rabbit, meet hat.

Macro

09:30 - Fed Speaker: Minneapolis Fed Pres. Neel Kashkari will speak this morning on the state of the economy from St. Paul, Minnesota. Keep in mind that Kashkari votes this year and has been the FOMC's only dovish dissenter. Kashkari will take questions from the audience throughout the event.

09:45 - Markit Manufacturing PMI Flash (April): Expecting 53.7, March 53.3.

09:45 - Markit Services PMI Flash (April): Expecting 53.2, March 52.8. The ISM reports for the manufacturing and service sectors don't do "the whole flash thing". Therefore, the Markit data, which lies almost completely ignored when the final numbers are reported, can sometimes get attention with the flash numbers. Still, any trader looking to trade off the macro today, will likely wait for the housing data, or the rig count if looking for a market catalyst.

10:00 - Existing Home Sales (March): Expecting 5.61 million, February 5.48 million SAAR. The March numbers for this series, though still running at elevated levels, came in at the weakest annualized pace after seasonal adjustment since August. The cause for this seemed to be more of a lack of supply than anything else. The expectation is for a return to data near the top of the chart for today's release. This is likely the macro event of the day.

13:00 - Baker Hughes Rig Count (Weekly): Last Week total 847, oil 683. U.S. oil rigs currently in production just keep on rising in number. I would not think that we'll see this trend change anytime soon, as long as WTI crude stays supported above $50 a barrel.

Sarge's Trading Levels

These are my levels to watch today for where I think that the S&P 500, and the Russell 2000 might either pause or turn.

SPX: 2370, 2362, 2356, 2347, 2340, 2334
RUT: 1405, 1398, 1389, 1382, 1372, 1367

Friday's Earnings Highlights (Consensus EPS Expectations)

Before the Open: (GE) ($0.17), (HON) ($1.62), (IPG) ($0.03), (KSU) ($1.16), (MAN) ($1.11), (SLB) ($0.25), (SWK) ($1.19).

At the time of publication, Stephen Guilfoyle was long KEY, SLB, although positions may change at any time.

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