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Earnings Energizing Stocks, Market In Record Territory

Stocks finished modestly lower yesterday, but still look fantastic after the S&P and the Nasdaq closed at new all-time highs the day before!

Earnings season has been the recent catalyst for the market's winning ways. And we got more solid beats yesterday as well. That includes a double-digit positive earnings surprise from Microsoft after the close. MSFT was up nearly 5% in after-hours trade. And Facebook's unadjusted earnings (before their $3 billion set aside for a privacy penalty), pleased investors with FB gaining 8% after they reported.

We'll get some more biggies today as well, not the least of which will be Amazon after the market's close.

I'm definitely expecting more gains as this earnings season unfolds, and more new all-time highs to come.

In other news, the State Street Investor Confidence Index notched up from 71.2 to 72.9. The North American component improved by gaining 2.8 points at 71.1. But Asia decreased by -6.7 points to 92.9. And the European component dipped by another -1.5 points to 86.7. No surprise in any of these numbers. The U.S. is the best game in town and institutional investors know it. Asia pulling back is also no surprise. China has seen a great rebound after exiting their bear market. So a little bit of risk-off after a huge rally is not a shocker. But they look to be in fine shape. And while Europe continues to struggle, the EU is still expected to see positive economic growth, so all is fine there as well.

But the U.S. economy looks great. And we'll get another look at it in Friday's Q1 GDP numbers.

As I've said before, this is an historic time for our economy. And in turn, an historic time for the markets.

So make sure you're taking full advantage of it.

By the way, in spite of stocks being in record territory, I think valuations look great. Especially when compared to future earnings growth. But I know some people get spooked when they see a high stock price. Of course, the price of a stock tells you nothing about its valuation. For example a $100 stock can be considered a major bargain whereas a $10 stock can be considered overvalued. And vice versa.

But there's no denying the attraction of lower priced stocks. Especially when you find those overlooked gems right before they break out. I love finding those low priced picks just as much as the next guy. And if you like finding them too, make sure you read our latest commentary...

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