The economic data released last week, including reports on home sales, business capital spending in March, and the weekly jobless claims for mid-April, further enforced our view that the U.S. economy, while still in recession, probably stopped getting worse as the first quarter of 2009 ended and the second quarter began. This is consistent with our base case for 2009 as laid out in our 2009 Outlook publication. This week, markets will digest the long awaited Q1 report on Gross Domestic Product (GDP), the broadest measure of U.S. economic activity. While the weak report is likely to garner a ton of media attention, financial markets are likely to be focused on the data for April on manufacturing and vehicle sales, as well as the weekly reading on chain store sales and jobless claims. The outbreak of Swine Flu and its potential impact on the global economy and markets will also be front and center this week.

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