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).

NOTE:  There
is no change from the last report.

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.

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 grade this factor a C- (below average)

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 have
downgraded this factor to a B- (above average). We
have reached the end of the first quarter and it showed little sign of the
acceleration many are expecting.  We can
expect more stock market volatility from lower-than-expected first quarter
earnings reports, out in April and May. One well known analyst issued a consensus
first-quarter earnings-per-share growth projections for S&P 500 companies declining
to 1% to 2% from 6% to 7% as the year began. The severe winter weather that
gripped much of the U.S. in January and February may yet be seen again in many
first-quarter reports.  The question
remains whether the warming weather will bring the economic acceleration stock
market analysts expected to occur starting in January.

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 grade this factor a C- (below average).

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 continue to grade this factor an A (very favorable). 

NOTE:  no change from prior week.

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 grade this factor a C- (below average

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 continue to grade this factor an A (very favorable). 

NOTE:  no change from prior week.

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 grade this factor a C- (below average

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 continue to grade this factor an A (very favorable). 

NOTE:  no change from prior week.

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 grade this factor a C- (below average).  This is a downgrade from the last report.  See more information under “The Economy”
below.

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 continue to grade this factor an A (very favorable).  With almost 90%
of the companies in the S&P 500 index having reported, the aggregate profit
growth in the fourth quarter was 9.3%, according to RBC Capital markets.  This performance continues to support a grade
of A.