‘No better indicator’ for bullish sentiment than piece of economic data due out this week

One portfolio manager is keeping a close eye on the capital goods orders report due out on Friday before the opening bell.

There will be no better indicator than this report of whether a strong stock market is reflective of a relatively strong underlying economy, said Kevin Caron, portfolio manager at Washington Crossing Advisors. Here are his reasons, along with an investment recommendation for 2018.

• For the most part, the market is seeing an improvement in sentiment around emerging markets and global growth.

• There is broadly less concern about low energy prices causing disruption within the credit market.

• These factors, along with the fading of deflationary fears, have aided in stabilizing the economy and have given investment spending a boost throughout most of 2017.

• Heading into the new year, investors should consider value equities, as stocks' valuations have become somewhat stretched.

Bottom line: The capital goods orders report due out on Friday may confirm the bullish sentiment seen in the stock market.


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Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

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