It feels like turn back the clock day as the earnings spotlight narrows in on General Electric Company GE 0.21% and Ford Motor CompanyF 0.33%, two of the most venerable U.S. manufacturers. Pre-market stock futures trading pointed to a strong start as earnings optimism continues, though European stocks fell. A weak dollar was also in the headlines.

GE missed Wall Street analysts’ estimates on both earnings per share and revenue with its results this morning, but shares rose a little, perhaps in light of the company’s statement that its “visibility and execution on cash is improving.” GE also noted strong performance in Aviation and Healthcare. The Healthcare business has become core to GE, and a strong performance in Aviation potentially helps the company no matter what it ultimately plans to do with the division. There’s been talk that GE could expand Aviation or change it in some way such as breaking it up or going public with it.

GE’s stock performance was, shall we say, disappointing, over the last year. Still, it remains in many portfolios as a widely held stock, so it continues to bear watching.

Ford (F), another company whose stock has lagged the market, reports after today’s close. Management has said it expects commodity prices and currencies to be headwinds in the coming year, but that U.S. tax reform could have a beneficial impact on the company going forward. F is expected to report adjusted earnings per share (EPS) of $0.43, up from $0.30 in the prior-year period, on revenue of $37.15 billion, according to third-party consensus analyst estimates. Both earnings and revenue have come in higher in three out of the last four quarters.

In another earnings development, United Continental (UAL) beat analysts’ expectations yesterday afternoon but disappointed in other ways. The company talked about its need for capacity, which, in non-airline speak, means it needs to fill more seats. This could lead to fears that UAL might cut prices. The airline sector has been pretty good lately, but this wasn’t the kind of news people necessarily wanted to hear. Shares of UAL took a beating in pre-market trading, falling 7%.

The old saying that a dollar doesn’t go as far these days certainly seems appropriate Wednesday as the dollar index plunged to new three-year lows below 90. It’s the lowest since December 2014, down from around 103 just a year ago. The dollar came under new pressure when Treasury Secretary Steve Mnuchin told an audience in Davos that a weakening greenback would be good for American trade, according to media reports. It’s unusual from a historic sense for a U.S. administration to “talk down” the dollar, so to speak, but that’s what we’re seeing.

A weaker dollar definitely has its merits if you’re a U.S. company, especially one selling lots of goods abroad. Info tech, industrial, and agricultural sectors all could benefit. However, a weaker dollar also could bring some danger, including higher oil prices (since oil is priced in dollars) and inflation. The general takeaway from Mnuchin’s remarks seems to be that the U.S. doesn’t have to lead in everything, and that the weak U.S. dollar could be helping other economies around the world.

Consider watching crude in the coming days. It bounced back Tuesday and neared $65 a barrel early Wednesday. It’s interesting to see that despite oil’s upward move Tuesday, the energy sector didn’t get much of a boost. Quite often, those two things go hand in hand. However, with energy stocks already up more than 8% since the year started, it might be a bit much to ask them to keep climbing every day.

Key economic data also filter in as the week advances, with existing home sales for December out today and new home sales due tomorrow. Remember that December was a month with a lot of nasty weather on the East Coast and in the South, which might have hampered the real estate business a bit and affected those numbers. Any weakness could be temporary due to the climactic conditions. Look for leading indicators tomorrow as well, and Q4 gross domestic product (GDP) on Friday.

If you wanted to go where the action was on Tuesday, you headed for the Nasdaq (COMP) aisle. The tech-heavy index went on a real tear and rose to new record highs as Netflix, Inc. NFLX 2.96% and other info tech stocks surged. The info tech sector rose 0.7% but NFLX was arguably off the charts with a 10% rise on the day, still showing momentum from the huge subscriber gains it reported in Q4 and its upbeat guidance. The stock seemed to sweep up other techs in its coattails as Facebook Inc FB 0.05%Microsoft Corporation MSFT 1.39%, and Alphabet Inc GOOG 0.56% GOOGL 0.63% rose sharply, as well.

The less tech-oriented S&P 500 (SPX), Dow Jones Industrial Average ($DJI), and Russell 2000 (RUT) were much more subdued, and bounced between gains and losses for much of the day. Big $DJI names Caterpillar Inc. CAT 1.04% and Intel Corporation INTC 0.07% step up with their Q4 results later this week, with CAT due early Thursday and INTC scheduled for after Thursday’s closing bell.

Speaking of subdued, that’s what market volatility looks like again this week, as VIX fell below 11 Tuesday. It looked like VIX might be waking up from hibernation a little last week, but there hasn’t been much follow-through. That certainly doesn’t mean VIX is down for the count, however, considering it’s less than three weeks until the government faces another budget deadline and another potential shutdown. Judging from Tuesday’s headlines, immigration remains a thorny issue in Washington, meaning the political noise might continue.

FIGURE 1: NASDAQ LEAVING THEM IN THE DUST. This year-to-date chart shows the Nasdaq, or COMP (candlestick chart) leaving the S&P 500 (SPX, represented by the purple line) and Russell 2000 (RUT, the blue line), well behind. Tuesday was another day when Nasdaq surged as info tech stocks continued to lead. Data source: Nasdaq, FTSE Russell, Standard & Poor’s. Chart source: The thinkorswim® platform from TD Ameritrade. For illustrative purposes only. Past performance does not guarantee future results.

Trade Back in the Headlines

Trade tensions between China and the U.S. eased a bit over the last few months as the countries worked together to try to quell the North Korea threat, but Tuesday’s announcement of new U.S. tariffs on imports of washing machines and solar panels seemed to rekindle the bad vibes. Even before Tuesday’s announcement, China’s Commerce Ministry had been criticizing what it called “protectionist” U.S. policy, and it announced its “strong dissatisfaction” with the new tariffs, according to The Economic Times. Remember that earlier this month, the markets had a hiccup over a media report that China might ease or stop buying U.S. Treasuries. China ended up denying that report the next day.

Even a slow-down in Treasury buys from China could weigh on the U.S. economy and stock market, potentially pushing down bond prices and raising rates. There’s no sense panicking yet, but investors might want to keep a close eye on this evolving argument between the two economic giants. The other side of the coin is possible benefits to U.S. companies if China’s exports hit a wall. For instance, shares of Whirlpool (WHR), which had been a real laggard over the last year, climbed 3% Tuesday on the tariff news.

Presidential Ponderings

Past is never precedent, but it’s often pretty interesting. That especially applies when it comes to assessing stock market performance in conjunction with presidential administrations. In 2017, the first year of President Trump’s administration, the S&P 500’s (SPX) 23.4% gain was better than during the initial year of any other Republican presidency since 1929, according to Sam Stovall of research firm CFRA. However, if history is any judge, stocks can often struggle during a president’s second year. The average SPX gain since 1929 in a president’s second year is just 2.5%, compared with a 10.8% average gain in year one, Stovall noted. Will Trump continue to enjoy solid stock market returns and buck the historic trend? The year is off to a roaring start, but time will tell.

Can 3% Growth Continue?

One of the other questions this year is how much the economy can keep growing. The economy grew 3% or more in Q2 and Q3 of 2017. On Friday, the government is scheduled to deliver its first Q4 GDP estimate, and the consensus of Wall Street analysts sits just below the 3% mark at 2.9%, according to If economic growth ends up meeting or exceeding 3% in Q4, it would be the first time since 2004-2005 that three consecutive quarters posted growth that high. The question is whether this means there’s been some fundamental change in an economy that had been delivering 2% or lower growth pretty much since the last recession, and why this change might be coming about. It’s too soon to say if the trend will stick, but if it does it could mean we’re finally getting out of the economic doldrums, an exciting development if true.