After Egypt, a Return to Basics Could Keep the Rally Rolling [Video]

The market heads into a busy week of economic reports and the tail end of fourth-quarter earnings season primed for yet more gains, says Jason Weisberg, managing director at Seaport Securities.

After all, if traders could sustain the rally through 18 days of increasing uncertainty in Egypt, a return to keying on fundamentals bodes well for the bulls.

"What's going on geopolitically is upstaging or suppressing the importance of a lot of those data points that are coming out," the veteran New York Stock Exchange (NYX) trader says. "The way we've seen the market behave over the last week through all this unrest, I'm shocked we've been able to put together such a rally. I think we'll continue to see such positive action unless one of the more unstable countries in that region destabilizes."

Trader on NY Stock Exchange
Trader on NY Stock Exchange

Ultimately, all investors really care about are corporate profits (since shares are supposed to be a claim on future earnings), and the fourth-quarter reports continue to be strong. Of the 369 companies in the S&P 500 ($INX) that have released results so far, 72% have beaten Wall Street earnings estimates, according to data from Thomson Reuters. And 69% have exceeded analysts' average revenue forecasts. Another 50 S&P 500 companies will report earnings this week, so barring any major surprises, traders can put this earnings season in the bag.

Key economic news coming this week includes retail sales on Tuesday, industrial production on Wednesday and the consumer price index on Thursday. We'll also get the minutes from the most recent meeting of the Federal Reserve's rate-setting committee, including the central bank's updated outlooks for unemployment, inflation and economic growth.

It'll be a busy week to be sure, but it would take some highly anomalous data to to spark any kind of sell-off, Weisberg says.

"A lot of these numbers are so telegraphed at this point," he says, "that there aren't a lot of surprises when it comes to these government data points." For more on Weisberg's take from the floor of the NYSE, see the video above.

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