Traders work on the floor of the New York Stock Exchange as Fed Chairman Jerome Powell holds a news conference on December 19, 2018.

New highs for stocks? The bull narrative is winning the argument, for now.

is about 1.5% from an historic high, and recent data may help make a run at that record.

Friday's nonfarm payroll report, with 196,000 new jobs in March, was above expectations and will go a long way toward quelling fears that U.S. jobs growth is slowing significantly after February's 20,000 print (which has now been revised to up 33,000).

This will reinforce the bull narrative that has come to dominate trading in the past month. The bull narrative is: China and Europe economic weakness is bottoming, there will be a trade deal with little or very low tariffs, earnings growth in the U.S. for 2019 will be in the low-single digits, inflation will be moderate (around 2%), and — most importantly — the chances of a recession in 2020 is very low.

The bear narrative, that China and European economic data has been mixed and does not support claims of a bottom, and that the likelihood of a recession in 2020 is very high, has been losing ground.

You can see the dominance of the bull narrative in the trading action. Globally, China is again the big outperformer up 5% this week as the Shanghai Exchange hits a 52-week high:

Global markets this week:

Shanghai up 5.1%

STOXX 600 up 2.3%

Japan up 2.9%

S&P 500 up 1.6%

Once again, gainers for the week in the U.S. are all cyclicals like semiconductors and industrials, while laggards are defensive names like utilities and consumer staples.

Sector leaders this week:

Semiconductors (SMH) up 5.1%

Banks (KBE) up 4.5%

Industrials up 2.3%

Utilities down 1.2%

Consumer Staples down 1.3%

The Cboe Volatility Index (VIX) is sitting near the lows for the year, a sign traders are not worried about near-term volatility.

Bond yields have risen in the last week as traders have become more confident in the bull narrative.

However, the global slowdown story is not dead. Recent German data has been poor. Overnight, Samsung Electronics said it expects to post a 60% decline in first-quarter operating profit because memory-chip demand has faded. That drop in demand is widely blamed on global trade concerns and weaker smartphone sales that have left chipmakers with a large inventory.