Will Market Recover From Last Week's Losses? - Economic Highlights

Stocks appear to be shrugging the weekend secession vote in Crimea after losing ground last week. The green arrows in the pre-market may be reflective of more than just Celtic solidarity on St Paddy's Day today, with the Empire State manufacturing survey confirming the positive bias. It will be interesting to see if the positive sentiment will withstand the industrial production and homebuilder sentiment data coming out a little later.

The market will have plenty of domestic economic data to chew on this week, with developments in Ukraine and questions about China's growth outlook providing an unsettling backdrop. On top of today's factory readings, we will get a host of corporate earnings, housing, and inflation reports the rest of this week.

But the focus will be on the two-day FOMC meeting getting underway on Tuesday, particularly Fed Chairwoman Janet Yellen's first press conference. No surprises are expected from the Fed, particularly on the Taper front.

With the unemployment rate not too far from the Fed's 6.5% target, they will likely try to move past the explicit threshold without roiling the market. This wouldn't be easy, as too vague a threshold leaves open the risk that the market gets ahead of the Fed in pricing the eventual monetary tightening. The FOMC could address this issue in its official statement on Wednesday, but the issue is bound to come up in Janet Yellen's press event that afternoon.

Beyond the Fed and economic data, we have the 2014 Q1 earnings season get underway with the Adobe ADBE and Oracle ORCL results after the close on Tuesday. Companies with fiscal quarters ending in February get counted as part of our Q1 tally and we have a number of other bellwethers like Nike NKE and FedEx FDX reporting later this week as well.

Estimates for 2014 Q1 came down at an accelerated pace as companies predominantly guided lower on 2013 Q4 earnings calls, consistent with the trend we have been seeing for more than a year now.

Total Q1 earnings for companies in the S&P 500 are currently expected to be down -1.5% from the same period last year, a material decline from the +2.1% growth expected in early January 2014. The negative revision trend is widespread, but is particularly notable for the Retail, Basic Materials, Autos, Consumer Staples and the Energy sectors.