April 2009
The stock market continued to move upward in April, following the recent low that was made on March 9th. Each week in April recorded an advance, with the Dow Jones Industrial average ending the month approximately 25% higher than that March low point. Though the economy continues to be working through a very difficult recession, there have been certain indicators of late that the rate of economic decline may be slowing. With equity valuations depressed and discounting weak prospects for corporate earnings, stocks offered appealing value to many investors. Whether this rally is sustainable will depend on economies around the world stabilizing, and the credit markets returning to more normal conditions. The structure of the bond market generally has improved, as yield spreads have narrowed a bit from the extremely wide spreads that existed in the fourth quarter of 2008 and earlier this year. Treasury returns were negative in April, as funds moved into more risky assets and away from the safety of treasury securities.
