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 have
upgraded this factor to B (above
average) based upon the increase in retail sales as reported in recent economic
reports.

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 rate this factor B- (slightly above average). U.S.
corporations are in the midst of the first quarter’s earnings reporting season.  About 90 of the S&P 500 companies have
reported their earnings.  66% have
exceeded expectations but this is slightly below average.  We will continue to follow this closely.