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- (very favorable).

THE FED AND ITS POLICIES: This factor is rated C- (Below average).

BUSINESS PROFITABILITY: This factor’s grade is B (above average). We are entering a period of what is supposed to be a good first-quarter earnings season, which begins in earnest this week. It’s a period in which earnings might have grown by a double-digit percentage, due to a big recovery in energy-sector profit growth. But much of the gain is already discounted by elevated stock prices.

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 3.  These risks deserve our ongoing attention.