It has been an extraordinary month of February for the U.S. stock market. It has received a steady stream of challenging if not outright gloomy economic news throughout the month. At the same time, corporate earnings growth forecasts for the coming year that were once positive by double digits only a few weeks ago have turned firmly negative. And the Chair of the U.S. Federal Reserve has made it rather clear, most recently in her testimony before Congress this week, that interest rates will soon be on the rise, most likely in June, which is earlier than market expectations. All the while, U.S. stock valuations have now crested the 20 times as reporting earnings mark on a trailing twelve month basis and are closing in on this frothy level on a forward basis too. But despite the fact that all of the news seems kind of gray, the U.S. stock market has only one place where it wants to go. It wants to go higher.
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