The “Heat Map”

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 A- (favorable), an increase due to strong Holiday shopping indications accompanied by strong job growth and consumer sentiment.

THE FED AND ITS POLICIES: This factor is rated C- (Below average). The FED raised rates last week but indicated. Experts are forecasting either two or three more hikes in 2018.

BUSINESS PROFITABILITY: This factor’s grade is A- (very favorable).

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 5. These risks deserve our ongoing attention.

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