Whether last week's Wall Street rally can continue largely depends on several job and housing reports released this week and on the details that emerge about Treasury Secretary Tim Geithner's bank rescue plan.
When Geithner announced the plan on March 26, the S&P leapt 2.3% but many on Wall Street are waiting to get more details, as Business Week reports:
But the plan offered few specifics in many of the areas it addressed, from tougher regulation of complex financial derivatives to new rules for money-market funds. And Geithner steered well clear of some of the most contentious questions facing policymakers--the questions that are sure to turn agreement about broad principles into a pitched, possibly months-long political battle that pits financial interests against consumer advocates and one another.
"It's like with all these programs--the devil's in the details," said Kevyn Orr, a Jones Day attorney who previously worked for the Resolution Trust Corp. as it cleaned up after the savings and loan crisis in the early 1990s.
The partisan bickering, that emerged during the debates over the stimulus package, is sure to continue when the House and Senate consider their budget resolutions, which largely track President Obama's outline.
Budget committees in both chambers approved the blueprints on party-line votes last week.
And the auto bailout will dominate headlines again, with Obama expected to announce the next steps to help GM and Chrysler on Monday. On Sunday, it was reported that the White House asked GM CEO Rick Wagoner to step down as a precondition for getting more federal aid, in the wake of some criticism that the giant automaker did not do enough to cut costs and slash debt as part of its agreement with the government.
Obama's visit to Thursday's G-20 summit in London - where the ripple effects of the global financial crisis will be discussed amid widespread criticism of the American style of capitalism - will surely impact world markets.
While not officially on the agenda, some underlying tensions about trade and currencies might come to the fore. The governor of China's central bank on Monday called for a new global reserve currency to replace the dollar.
"There are hurdles," said Johnson of Johnson Illington Advisors, "not just with the economic numbers and earnings reports next week, but also with the rhetoric on currencies. There are tensions starting to build over some underlying trade issues."
The most-watched economic numbers this week will be the Labor Department's Friday report on how many jobs were lost in February.
The Associated Press reports that:
The most critical report of the week comes Friday, when economists expect the Labor Department to say that 640,000 jobs were cut last month. The unemployment rate is expected to have risen to 8.4 percent from 8.1 percent in February, according to the consensus of economists polled by Thomson Reuters.
Other important numbers are:
On Wednesday, the Institute for Supply and Management releases its assessment of the health of the manufacturing and service sectors.
And new housing numbers will be released throughout the week:
The Standard & Poor's/Case-Shiller January index of home prices is due out Monday; the National Association of Realtors releases its pending homes sales index for February on Wednesday; and the Commerce Department releases a report on February construction spending, also on Wednesday.