Most of the time, the U.S. stock market looks to 3 factors (call them the “pillars” which support the stock market) to support its upward trend – let’s grade each of the pillars.

CONSUMER SPENDING: This grade is A- (very favorable). Favorable activity in the housing market continues to support growth in the level of spending.

THE FED AND ITS POLICIES: This factor is rated A (very favorable). Last week’s FED meeting means the Fed probably will remain on a long and slow path to hiking rates.

BUSINESS PROFITABILITY: This factor’s grade is increased to a B- (above average). The market’s valuation prices in an improvement in second-half earnings and an impressive rise in 2017 EPS for the S&P 500.

OTHER CONCERNS: The “Heat Map” is indicating the U.S. stock market is in OK shape ASSUMING no international crisis. On a scale of 1 to 10 with 10 being the highest level of crisis, we rate these international risks collectively as a 4. These risks deserve our ongoing attention.