With no positive catalyst to give it a clear lift, the market mood is likely to remain mixed today. And I wouldn’t be surprised if this trend remains in place over the coming days.
Offsetting this trend willl be positive economic reports, particularly on the labor market front, reassuring the market of the sustainability of the U.S. recovery even in the face of global headwinds. The next few weekly jobless claims numbers (Thursdays) and the March non-farm payroll report coming out on April 1st will be the key catalysts for the market in the coming days till we get into the first quarter earnings season.
The international backdrop will likely have a net dampening effect, with the evolving picture in the Middle East keeping oil prices elevated and volatile. We haven’t heard much on the European government debt problem lately, but Portugal’s tenuous finances and shaky government may make it the third country to get a bailout in the coming days.
Japan is moving on from the crisis stage and starting to estimate the extent of its losses. Overnight reports put the Japanese government’s estimate of the disaster’s price tag at more than $300 billion. Meeting that level of funding need will be a major drag on the government’s financial profile, which was quite weak to begin with.
We will likely be hearing a lot about Japan on the first quarter earnings calls. And if Adobe Systems’ (ADBE) results are any indication of the things to come, the references to Japan will be mostly to explain earnings misses and soft guidance. The tech sector may be particularly vulnerable on this front.