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.