Busy Economic Calendar This Week

We don't have much on the economic calendar today, but the rest of this week is quite busy with economic reports. Stocks will be looking for evidence of economic vigor and health in this week's reports after a slew of soft readings in the last few weeks.

The market's six-week losing streak reflects these recent soft economic readings that have heightened concerns about the economy's near-term growth prospects. The consensus view assigns the blame for the ongoing soft patch on temporary factors such as supply disruptions from the Japan disaster, the surge in gasoline prices and unusual floods in parts of the country.

The expectation is that normal growth will resume in the second half of the year as these clouds lift. As a result, expectations for second-half economic growth have held up even as estimates for the current quarter have come down in recent days. The market sell-off reflects a lack of conviction in this second-half recovery theme. Stocks need to see some evidence in this week's reports to reverse course.

Of particular significance in this week's broad range of economic reports would be the regional manufacturing surveys -- the Empire State and Philly Fed surveys -- and the Industrial Production reports. The loss of momentum in the manufacturing sector, a stand-out performer in this recovery, was the most plausible consequence of the Japan disaster. It may still be too early to expect the Japan-induced softness to dissipate, but we may see some tell-tale signs of that positive trend in this week's reports.

We still have almost four weeks to go before the second quarter earnings season gets underway. Between now and then, the focus will remain on the economy. Stock market valuations have started to look attractive after six losing weeks. Even a modest improvement in overall sentiment will bring back investors' bargain-hunting instincts.