Three things driving the stock market higher, and two headwinds

Bull market is driven by several major forces that reflect the acceleration in overall sentiment, but there are two obstacles which could delay the rally, said Mohamed El-Erian from Allianz on Tuesday.

One of the three forces pulling the market up is better global economic data. The second is the continuous release back into the market. And third, expectations that Mr. Trump's pro-growth announcements will translate into policies.

But the chief economic adviser of Allianz said that there are two headwinds that could dampen these market forces. If the Fed raise interest rates two to three times this year, which seems to happen, then the dollar will continue to appreciate and slow growth in the stock market. Then the politicians will also play roles such as administration Trump will disclose more details about some of the key economic policies.

We will see next week's decision of the Congress to drive tax reform, deregulation and infrastructure costs.

El-Erian said there is a limit to how far you can push prices without actually delivering on policies. Markets can not simply be loaded from notices. At one point, they need detailed design and implementation.

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