A good week for the equity market
The upward trend that began a week ago continued into this holiday-shortened week. All major stock market indices increased during the week. Ironically, when the anemic economic news was released, equity investors ignored it on hopes that corporate profits are already at their lows and will begin to improve in the second half of the year.

While the trend has improved over the past week, analysts have become more cautious in claiming the market has bottomed. Every time the equity market has rallied, it has provided an opportunity for investors to sell at better prices. Analysts aren't convinced that the worst has passed. Indeed, given the economic environment - which only now appears to be worsening - it may be a few more months yet before investors become confident that market upturns will hold.

Treasury yields jump
Investors fled to the Treasury market in the prior weeks when stock prices were tumbling. As stock prices headed higher this week, the bond market lost ground. Indeed, yields across the maturity spectrum rose anywhere from 15 to 30 basis points from a week ago. The Treasury market lost ground because investors were tipping their toes in the stock market water again. In addition, Treasuries were also competing with corporate and agency securities this week. In addition, the higher yields for Treasury securities may indicate that investors no longer believe the Fed will come and cut the federal funds rate before the next FOMC meeting in mid-May.