The slew of bad economic data that has come out recently does not bode well for growth in the second quarter. With a preliminary first quarter GDP of 0.2 and with many economists predicting it will be revised negative, it is looking like the fed’s GDP growth target will not be reached again. Interestingly enough, with all this bad data, the market is still trading at a nice premium to historical P/E averages. Currently the S&P 500 is trading at roughly 18 times earnings while historically the average is 14 times earnings. Our perspective is that, due to the low interest rate environment, investors had nowhere else to go but into the equity markets. While the fed has telegraphed their intentions of raising short term rates, any move up in yields on the longer end of the curve will send stocks down. We have seen this happen multiple times this year. Stocks move up, yields move down, and then the big reversal. This is why the markets are seeing such increased volatility. This range movement in both the equities and bonds is our expectation for the rest of the year!