We anticipate that the Fed will be more dovish at the May meeting due to several leading indicators starting to fall. We are seeing a high probability for one last rate hike of 25bps, and after that we think they could be done raising rates. We continue to believe that increasing rates will do more harm than good at this point. The Conference Board’s Leading Economic Index (LEI) sank 1.2% in March, a much deeper drop than the consensus estimate of -0.7%. This was its 12th consecutive decline, and the most since April 2020. Most of the LEI components made negative contributions, led by building permits. The pace of decline in the LEI has accelerated, with the six-month rate of change sliding to -4.5%, the steepest drop since July 2020. Moreover, eight of the ten LEI components deteriorated over the past six months. The rate of decline in the LEI and the weak indicator breadth are historically consistent with falling economic activity. The Conference Board expects further economic weakness in the coming months and a recession start in mid-2023. Factory activity in the Philly Fed region contracted for the eighth consecutive month in April. The General Business Activity Index fell 8.1 points to -31.3, its lowest level since May 2020, and well below the consensus of -20.0. Most individual activity indicators were in negative territory, although some improved from the prior month, reflecting slower rates of decline. Such was the case for new orders, shipments, and employment. The cut in inventories, however, intensified. 1Q23 earnings season continues to come in “better than feared” and with 84 companies having report (17% of S&P 500), 79% are beating with a beat margin of 5.7%. Look for strength in biotech, technology, and energy, as all three sectors are looking strong.