Rising Economic Expectations Continue

Expectations are indeed rising. It seems easier each day to find another economist forecasting recovery at least by year end. In fact the "green shoots" of recovery now seem to be several inches high. Obama's "glimmers of hope" seem to produce new sunbeams each day.

1. Consumer sentiment is firmly on the rise. All indexes used to measure sentiment now agree. Last Friday the Reuters/University of Michigan index rose to 65.1 from a mid-month reading of 61.9 and a March reading of 57.3.

2. Both ISM indexes now indicate strongly that rates of economic contraction have slowed substantially. The latest report shows new orders especially strong. Surprisingly employment outlooks also began to improve in both recent ISM measurements.

3. Housing data continues its positive run. The pending sales index now points to improvement in existing sales for both April and May. And Monday construction spending showed its first pickup in six months.

4. Earnings season has turned out significantly tamer than many bears had forecast. Not only have many companies easily beat consensus estimates, but companies have in turn raised their revenue and earnings guidance for the remainder of the year.

5. The 2009 stock market rise continues unabated. For those banking on stock funds in their IRAs and 401Ks, their Q2 statement gains will likely be the best in several years.