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.