For the last six months or so, the economic data has been generally improving.  Yesterday’s ISM report is a continuation of that pleasant trend.  It indicates that the manufacturing sector is the strongest it has been in two years!  This comes despite the disturbing 5% rise in the dollar since the election and weakening global growth.  Employment in the manufacturing sector has also reached an 18-month-high.  (This could create another pleasant surprise in the latest “Jobs Report” due out this Friday.)  In addition, corporate earnings began improving in the fourth quarter, ending the so-called “earnings recession.”

The cautionary details are that inventory levels are down while delivery times are up, suggesting some capacity limits and creating some inflationary pressures.  Stay tuned . . .

It is not clear to me that this bull market is merely a “Trump Rally” of good feelings.  It is supported by the improving economic data, improving corporate earnings, AND the end of gridlock in Washington.  There are many reasons to be bullish right now.  So, enjoy it for now, because the bears are just resting.