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State of Recession: What Inning Is This?

The state of the economy will come under the microscope again next week with the release of first quarter GDP data as well as a statement from the Fed.

GDP

If you’re an investor who’s betting on the downturn moderating, there’s good news -- you may get a further lift on Wednesday from the advance reading of first-quarter gross domestic product. It’s expected to show the pace of contraction slowed to 5 percent from 6.3 percent in the fourth quarter.

"I think what's really going to probably grab the most attention will be the first look at Q1 GDP," says Joe Manimbo, a currency trader at Ruesch International in Washington.

And he sees a trade – that is, a weak dollar.

"We could see the dollar perhaps react negatively if we see a more encouraging result, which of course would boost risk appetite and reduce demand for safe-haven currencies."

Fed Meeting

Meanwhile, a policy meeting of the Federal Reserve should also grab some attention, and traders will likely focus on the accompanying statement for clues to the Fed's assessment of the economy.

In March, the Fed announced it would buy longer-term U.S. government debt, sending the dollar sharply lower.

"(Investors) want to know how long this quantitative easing is going to last," adds Melvin Harris, market strategist at Advanced Currency Markets in New York. "People want clarity and they want to know what the Fed's expectations are for the global economy."

In fact the IMF already sees a few rays of light. "There has been some improvement in business confidence, some signs of bottoming out in housing market,” says Charles Collyns, IMF's deputy director of research.

But don’t get too excited. He also says these are early days and we should not expect a return to growth any time soon. "We don't expect a return to positive growth in the U.S. until some time next year."

What’s the bottom line? Chris Thornberg, of Beacon Economics says we’re starting to turn the corner. “The fundamentals of the downturn are hitting a level of stability.”

What do you think? We want to know!






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Trader disclosure: On Apr 24th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (SDS), (AGN), (WYNN), (GE), (LVS), (WFC); Seymour Owns (BAC), (EEM), (FXI); Seymour Is Short (AAPL); Finerman's Firm Owns (AXP), (RIG), (UNH), (TBT); Finerman's Firm Owns (BAC) Preferred; Finerman's Firm Owns (C) Preferred; Finerman's Firm Owns(MSFT) & (MSFT) Put Spread; Finerman's Firm Owns (WFC) Preferred; Finermans Firm Is Short (IJR), (MDY), (SPY), (IWM), (USO); Najarian Owns (ANR) CAll Sprad; Najarian Owns (BX) Call Spread; Najarian Owns (MS) & (MS) Calls; Najarian Owns (PCU) Call Spread; Najarian Owns (PALM); Najarian Owns (RIO) Calls; Najarian Owns (XHB) Cal Spread; Najarian Owns (XLB) Call Spread