Economic Review 2nd Quarter 2009

We ended the First Quarter 2009 on a note of cautious optimism, sparked by a strong March rally that lifted the S&P 500 Index to an 8.76% return for the month.

Unfortunately, the S&P 500 is still well off its September 2008 pre-financial crisis levels. A number of concerns were raised:

Credit
Liquidity not returning to credit markets. Credit spreads have declined.

Banking
Federal Reserve needed to raise additional capital- which many did through the sale of non-core assets, issuing new shares, or with the help of the government Financials turning a 35.71% return.

Recovery Signals
Consumer sentiment and confidence have increased as well as pending home sales but rising consumer confidence has not been matched by spending and unemployment continues to rise, which you know from previous Economic Reports this is normal in a recession.

Recession Forecasts
Many different opinions, but ultimately, the majority agree it's finally bottomed and is moving toward expansion.

Corrections and Bear Market Rallies
Many different projections, but ultimately, the majority agree the economy is indeed recovering.