Some Good News About the Economy

Here are some excerpts from a recent piece on the economy from our bankers, Central Bank: 

• In response to massive coordinated policy responses around the world, financial conditions have largely returned to normal, thereby setting the stage for healthier earnings and a recovery in most of the world’s economies.
• If history were to repeat itself, the market would continue to rise in the coming year. Since 1949, stocks have posted an average second-year increase of 15% versus an average first-year advance of 32%. In support of this positive outlook, Zacks Investment Research is now forecasting a 2010 growth rate of 31.74%.
• We continue to expect a more significant pullback to occur followed by a recovery to new highs by year end. Top performing sectors through February include Industrials (+3.3%), Consumer Discretionary (+2.2%), Financials (+1.9%), Consumer Staples (+1.4%) and Health Care (+0.4%).
• The unemployment rate was unchanged at 9.7% in February.
• The Fed Funds target rate remains in a range of 0.00% to 0.25% while the Discount Rate was raised to 0.75% in February, 2010. The Prime Rate is now 3.25% vs a level of 3.25% one year ago. Markets are now expecting the Fed to modestly raise rates later this year.