It is clear in the futures trading that the stock market will start today's session on an upbeat note. The S&P futures are up 14 points, the Nasdaq 100 futures are up 30 points, and the Dow Jones Industrial Average futures are up 223 points.
The reported catalyst for the bullish bias is the optimism about tax reform following the passage of the Senate GOP's tax bill early Saturday. That passage, which was secured by a 51-49 vote (Senator Corker was the only 'No' vote on the GOP side), now leads to a reconciliation process between the House GOP's tax bill and the Senate GOP's tax bill.
The compromise effort between the two plans has potential to get sticky, but if the stock market's behavior of late is any indication, there is abiding faith in the notion that an agreement will ultimately be reached.
Accordingly, market participants are eyeing the prospect of stronger earnings growth in the year ahead and are using that as justification to keep the bull market running since it will help quell some underlying concerns about stretched valuations.
The tax bill is the focal point, yet some of this morning's updraft also relates to the correction by ABC News of its reporting last Friday pertaining to allegations that Michael Flynn was directed by President Trump to contact Russia during the presidential campaign. The correction indicated that the direction to contact Russia didn't come until Donald Trump was president-elect.
That correction has tempered some of the political uncertainty that the original report stirred on Friday, causing a cascade of selling interest.
The stock market still managed to recover a lot of lost ground on Friday, though, as the chances of passing the Senate GOP's tax bill improved on the back of headlines indicating several fence-sitting Senators planned to vote in favor of the tax bill's passage.
The new week begins, then, with an air of optimism, a sigh of relief, and a bullish bellowing that "things" are lining up favorably for a good end to the year.
Another "thing" helping sentiment this morning is M&A activity. CVS Health (CVS) has provided the ballast there with an offer to acquire health insurance company Aetna (AET) for approximately $69 billion, or $207 per share, in cash and stock.
The latter news will underpin the health care sector as it will undoubtedly stir speculation about other potential takeover candidates.
Corporate news, however, is taking a backseat to the political developments, which are fostering some added faith in the seasonality trade, giving some added push to the momentum trade, and generating a familiar fear of missing out on further upside.