Most of the time, the U.S. stock market looks to 3 factors to support its upward trend – let’s grade each of the factors:

CONSUMER SPENDING: I grade this factor a C (neutral).

THE FED AND ITS POLICIES: I 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 grade this factor a B+ (favorable). The first group of earnings report have been released and the results are mixed – some of beat the estimates and some have fallen short. It is too early to change the grade.

NOTE: the above grades remain unchanged from last week.