April 2010 Market Review

Did spring, in the form of April's market returns, just come in like a lamb? Will spring, in the form of 2nd quarter GDP, go out like a lion? Will that lion be robust and energized, or an angry beast?

April's returns are now in the books. Many of the themes remain the same. Those include:

1. A trend toward disinflation helping the bond market primarily.

2. Easy money from the Fed supporting all markets.

3. Improved corporate earnings (be aware that earnings comparisons are year over year, and April 2009 was the economic abyss).

4. Problems throughout the Euro-zone benefiting the U.S. dollar and gold.

I still believe the economy is operating in a manner equivalent to walking pneumonia. Housing and labor remain huge drags on our overall economic and fiscal health. The oil disaster in the Gulf of Mexico will definitely be a drag on 2nd quarter GDP. Speaking of which, you will NOT want to miss my radio show this Sunday evening from 8-9pm ET as No Quarter Radio's Sense on Cents with Larry Doyle Welcomes Back Rick Davis of the Consumer Metrics Institute to review the 1st quarter GDP report released yesterday and preview 2nd quarter GDP. Rick is way ahead of the curve. My initial interview with him on March 27th was off the charts. Tomorrow evening will provide more of the truth, transparency, and integrity that Sense on Cents works diligently to provide. Spread the word.

Now, the April returns . . .

The Euro continued to lag given problems in the Euro-zone. That development supported our greenback:

The commodities index improved, led by the shiny yellow substance. That said, the overall commodities index is still down for the year. Disinflation is becoming further entrenched. Will that spill over into outright deflation?

Equity markets ended the month marginally better, but have been running in place for the last three weeks. Are we putting in a top? Will an expected slowing in 2nd quarter GDP (as projected by my guest tomorrow evening) lead to a long, overdue pullback in equities? International and emerging markets are lagging domestic equities:

Bonds have benefited from concerns in the EU and from a clear trend toward disinflation. The Fed is in no rush to change its monetary policy given the challenges in housing and labor:

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