GDP: Down but not Out

The annualized GDP number came in slightly better than expected this morning (0.6% growth vs 0.5% expected) which was taken as a positive by futures traders (S&P futures promptly traded up 9 points).  Oil inventories at 10:30 and the Fed announcement later at 2pm will likely keep volumes low this morning, but some indicators at least have signaled light at the end of the tunnel.

The US Dollar index has gained 3.2% since its intra-day low on 3/7/08, a signal that the Fed will soon stop cutting rates.  With the dollar and analysts signaling a possible end of the Fed cycle (after today's forecast of a 25bps cut), and the market rallying on the news, long-term prospects for stocks seem good.  This of course assumes that the large banks are through the worst of their troubles.