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

CONSUMER SPENDING:  I grade this factor a B- (slightly favorable). 

THE FED AND ITS POLICIES:  I continue to grade this factor an A+ (extremely favorable) because the FED cannot do much more than it is doing to support the stock market and asset prices.

BUSINESS PROFITABILITY:  I continue to grade this factor an A (very favorable).  We are now in the midst of earnings reporting season for the quarter ending 12/31/13.  So far, the blended earnings-growth rate for S&P 500 companies in the fourth quarter, comprising actual results and estimates for companies yet to report, is 6.4%, according to FactSet Research as reported in Barrons Online. We will maintain our “A” rating if this +6.4% holds up.