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

THE FED AND ITS POLICIES: We 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: We rate this factor B- (slightly above average).The next few weeks of earnings from banks, tech companies, and industrials will give investors the first good window into the U.S. economy in the second quarter and whether or not the decline in first-quarter gross domestic product was a cold-weather fluke.

NOTE: There is no change from the last report.