The S&P 500 rebounded sharply in April (up 4.8%) despite mixed to weaker economic data, slowing earnings, as reflected in more 1Q08 earnings reports, and continuing concerns about housing, employment, spending trends, credit availability, and the length of the current economic slowdown. Investors even responded favorably to negative 1Q08 earnings reports (which were impacted by additional write-downs) from Citigroup (C/$25.27) and Merrill Lynch (MER/$49.83) by immediately buying the shares despite numerous earnings estimate reductions by Street analysts, a clear signal that many feel the worst is already priced into these depressed mega-financials and things will be better next year. More recently, Citigroup announced plans to sell common stock to raise $3 billion in new capital, and the stock has weakened. Investors continue to face mixed economic data and an equity investment environment roiled by rising earnings risk and greater month-to-month volatility. Lower short-term interest rates and steps taken by the Fed to address liquidity in the financial system and for the lower income masses are positives that should provide some help to the economy by 3Q08. IRS rebates will be sent via direct deposit or mailed to ten of millions of U.S. families over the next three months. But to what degree will this new largesse offset a weakening economy, weighed down by growing credit constraints and weaker spending tendencies? How much of a boost to sustainable consumer spending will result from these IRS refunds beyond the boost provided from May of this year through year-end? Underlying U.S. financial and economic conditions are putting downward pressure on spending and corporate earnings growth. Investors continue to debate how weak the economy will be and how long the recession or period of economic slowing will last. While consumer and investor pessimism remains rampant, expectations of a start to a U.S. economic recovery in 2H08 may be growing because of the IRS refunds; I expect any U.S. economic recovery to be very weak through next year, however. The International Monetary Fund (IMF) predicts that due to weakness in the U.S., 2008 world economic growth will slow to 3.7% (from 4.9% in 2007) and indicates a 25% chance that this growth rate could fall below 3% this year. The IMF currently projects inflation of 2.6% in developed economies and 7.4% for emerging economies this year. Decelerating world economic growth and slower spending exacerbated by rising energy and raw material costs is a visible problem for corporate revenues, profit margins, and earnings growth. U.S. economic growth for 2008 and 2009 is currently pegged at 0.5% and 0.6%, respectively, by the IMF. Obviously, these projections indicate an expectation of a weak U.S.