* Friday April 29, 2016 was the final trading day for the month of April and I think this will turn out to be a pivotal month for the month of April and I will talk more about that later in this report
* I wanted start by talking about the Federal Reserve's decision on Wednesday not to raise interest rates
* Few people really believed they would, but earlier in the year it was widely believed that by April the Fed would have raised interest rates at least one more time, given the fact that they began the tightening cycle in December with the first .25 rate hike
* What's more important than the failure to raise rates again was what they wrote in their statement with respect to the idea that future rate hikes are forthcoming
* The Fed is still clinging to the false narrative that this recovery that is basically already ended is on track, and that they will be raising interest rates at some point later in the year maybe 2 or 3 more times; they just decided not to do it in April
* The only acknowledgement that the Fed made with respect to the economy was that growth was slowing
* That is a dramatic understatement to say that growth has slowed
* If you go back to December, when the Fed confidently announced their first rate hike, they were forecasting that the economy would grow by about 3% in the first quarter of 2016
* Yesterday we got the government's first estimate for Q1 growth rate and it came in at just .5%
* You can hardly refer to that as a slowdown, when pretty much all of the growth that the Federal Reserve believed was going to materialize evaporated
* I don't know how they can simply say growth is slowing - growth is non-existent
* As a matter of fact, the New York, Fed, which recently began issuing its own GDP Now Forecast, are now forecasting that Q2 will be just .8%
* Averaging the two quarters out, you barely have any economic growth
* I think the New York Fed is still overly optimistic
* I think the Q1 report of .5% will be negative after final revisions
* I also believe Q2 is going to be worse than Q1
* Even if Q1 .5% holds, that represents the third consecutive quarter where GDP has declined
* In fact 2015 Q4 was 1.4%, so .5% is less than half of the most recent quarter
* I think that trend is going to continue
* There are still a lot of people who believe we'll get a rebound in Q2, because we got a Q2 rebound in the prior 2 years.
* But the New York Fed is already throwing cold water on the idea that there is going to be a rebound
* What nobody is talking about is that the main reason for the Q2 rebound in the previous 2 years was because we had unseasonably cold winters
* We just had the warmest winter in 120 years, so we're not going to bounce back from anything
* In fact, I believe the winter was so warm, that we probably pulled forward some of the economic activity that might otherwise have happened in Q2, so I think Q2 is going to suffer
* Additionally, we had big builds in inventories in the prior 2 second quarters - that's not going to happen this quarter
* Our trade deficits are even bigger now than they used to be

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