The trading week started off slowly as investors absorbed further troubling news about the state of the

global economy: Disappointing manufacturing reports from China, France, and Germany, plus news that the Netherlands might be heading for its own fiscal crisis.[1] Things turned around later in the week though, as dom estic equities closed higher on positive news surrounding U.S. corporate earning s. The Dow managed to recoup all its April losses, closing up 1.53% for the week , while the S&P rose 1.80%, and the Nasdaq gained 2.29%. For the moment, corpora te earnings are providing a positive counterpoint to lackluster economic news. The state of our nation s economy was also in the spotlight last week. Gross Domesti c Product (GDP) grew by 2.2% in the first quarter, down from 3.0% in the fourth quarter of 2011. The biggest factors in the slowdown were slower inventory-build ing by private companies and less defense spending by the federal government. Th ankfully, consumer spending the largest contributor to GDP is still strengthening, w hich should lead to ongoing improvement in our overall economic picture.[2] In k eeping with its upbeat tone, the Fed added 20 basis points to its 2012 GDP forec ast, increasing predicted growth to between 2.4%-2.9% this year. The Fed also ag reed to keep interest rates between 0.00%-0.25%, and expects inflation to remain below 2.0% for the next two years. During the follow-up press conference, Chair man Ben Bernanke stated that the Fed was still prepared to take an active role i n the recovery.[3] Unemployment claims continue to remain near a three-month high, indicating that employers have stepped-up layoffs and are reluctant to increase hiring. However, economists believe that the mild winter distorted first-quarter hiring, making it appear unusually strong. Overall, the economy has continued to add jobs and u nemployment is falling well ahead of estimates.[4] Regardless of what happens with short-term market movements and news from abroad , we are grateful to see that the U.S. economy is recovering from the financial crisis better than any other economy in the world right now. This is likely a ma jor reason why we have seen domestic equities performing so well lately when compa red with the rest of the world, U.S. companies are the prettiest girl at the dan ce. While there are sure to be bumps in the road ahead, corporate balance sheets are strong, the job market is slowly improving, consumers are still spending, a nd our economy is chugging along.