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. Earnings appear to be average; but, keeping in mind the horrible winter, “average” is quite the achievement.