Slow starts and fast finishes
Equity markets started the week on the downside as profit warnings and a poor consumer confidence number kept investors from being overly optimistic. This had to have been expected as some of last week's euphoria from the surprised Fed interest rate cut tapered off, although overall investor sentiment remains cautiously optimistic. The week ended with a major move up for the Dow as a higher than expected GDP figure on Friday kept market players positive headed into the weekend.

Last week's FOMC inter-meeting move, combined with the higher than expected GDP, raised investor optimism for positive corporate profits later this year. This optimism also has investors believing that the economy may be in the process of turning the corner.

Treasury Confusion
After last week's rough seas in the Treasury market, fixed-income security investors had to digest some economic data early in the week that suggested that the Fed might need to cut rates more than the market thought. This combined with a glut of corporate and agency supply pushed investors away from treasuries. While there was some positive movement as consumer confidence fell off and jobless claims rose, the treasury market sank with GDP on Friday as investors moved into the surging stock market. Traders immediately began reevaluating whether and when the Fed might cut interest rates given the surprising strength of the economy. Odds now favor a 25 basis point cut at the Fed meeting on May 15.