Returns across most asset classes were strong in April. Stocks were led by non-U.S. developed nations although much of that gain could be attributed to the declining value of the U.S. dollar. The weaker dollar was also a key factor in the continued rally in commodities. The S&P/GSCI Commodity Index gained nearly 50% from last July to the end of April. Undoubtedly the poster child for the commodity rally has been silver which was up over 250% in that time period. The commodity party received quite a jolt in the first weeks of May, though, as a decent US employment report and rather dovish language from the European Central Bank head unleashed a wave of selling across all commodities and a rally in the dollar. Silver dropped over 25% in just a few days:

*Although for some historical perspective, here is a chart of silver from the spring of 1980 as the Hunt brothers saw themselves fall from the ranks of the world's wealthiest men to mere millionaires*:

For the broader economy, the bigger story has been falling oil prices- now 15% off the highs of April. This is likely to reinforce the view within the Federal Reserve that whatever inflationary pressure is being applied by commodity inflation is transitory. Chairman Bernanke and a majority of the Fed board seem unwilling to move on interest rates until they see inflationary pressures in the labor market... not likely with unemployment remaining near 9%. To get an idea of what the Fed is closely watching, take a peek below. That graph shows the yearly percentage change in Unit Labor Costs, a measure of labor prices that accounts for changes in productivity, is still well under 2%:

The central bank will not raise rates without signs that inflation is taking root in other parts of the economy. The recent volatility in commodity prices will reinforce their belief that those markets are not predictive in nature. At this stage we see little possibility of a rate rise before mid-2012. While the stock market generally prefers low rates this does reinforce the view that the lackluster recovery will continue at its meager pace and leaves market vulnerable to shocks such as further trouble in European periphery countries.    

How your credit score affects your life.. and your wallet.

Your credit score will determine the interest rate you are charged on nearly any credit account, from your mortgage to your, ehem, Bloomingdale's credit card. For example,  the payment for a 30 year, $300,000 loan from one of the largest U.S. banks for an individual with a 690 score is nearly $100 more than the same person with a score of 765. If the score was below 660, they would not even be eligible for a thirty year loan without further underwriting by the bank.

Credit scores are not just for the issuance of credit lines. It has become nearly a standard practice for landlords to vet potential renters by checking their score. The rates most auto insurance companies charge is partly based on your score and many employers factor your credit report (if not the score) into hiring decisions.

How to Maintain Your Credit Score

The first step is to make sure that your credit reports are accurate. You can get a free copy of your report (not your score) from each of the major reporting agencies once a year at www.annualcreditreport.com .  Review the report for any inaccuracies such as accounts that do not belong to you, reported missing payments that you have made, and contact the agency to correct any mistake.

Assuming all information on your report is correct, the best ways to maintain, or improve your score are:

• Pay all your bills on time. This is the most important factor. We have seen a credit score knocked down by 100 points over late payment on a $125 bill.
• Do not utilize all of your available credit. While you may think it looks prudent  to maintain a credit card with a low credit limit to ensure you do not overindebt yourself, the credit agencies see you as someone who nearly maxes out your cards every month. It is also not a good idea to maintain a balance that rolls over month to month.
• For purposes of your credit score it is important to have some kind of credit history, even if you do not need the credit. You will find it surprisingly difficult to get a mortgage if the bank can find no payment history of any type when they look at your report.
• Do not open a lot of new credit accounts. You may get offers from every store you shop to open an account but that will be viewed negatively when your score is calculated. When it comes to your credit score, the fewer, older and underutilized your credit lines are the better.