The two doses of LTRO that Europe got were just the vitamin and not meant to be penicillin. The growth prospect in Southern Europe looks dire and austerity targets ambitious. The first quarter rally in the S&P 500 has been the best in over a decade but will the market continue to bloom this spring? The US Jobs report out on Good Friday and the Q2 earnings season starting 10th April will provide us with the answer. I am cautiously optimistic for Q2 earnings and therefore think the market could rally all of April. Two factors have been key influences – good macro data from the US and a reward (albeit delayed) for last year’s US corporate earnings. It is attractive to be a contrarian but one can only be a contrarian at the ends; in the middle, one is a trend follower. We still seem to be in a good data trend from one economy that still matters more than others – the US.
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