"Respect your efforts, respect yourself. Self-respect leads to self-discipline. When you have both firmly under your belt, that's real power." -- Clint Eastwood

Hold Everything

Global equities and U.S. equity index futures markets have hit a couple of bumps in the road this morning. True, any expected quarterly unwinding of equity positions by pension funds would likely have to be completed by today, but this is not really what the weakness is about. This undercurrent of late night/early morning risk-off behavior is based on poor macro. We all believe that there is economic optimism aiding the global reflation trade, and while one tough night does not put that trend to bed, the numbers still serve as something of a wake-up call.

Last night Japan's Statistics Bureau went to the tape with data on household spending and consumer-based inflation. That February household spending number showed a sizable contraction for the month, much worse than expected, and on top of that, was the 12th consecutive month that Japanese households cut back on expenses. As for inflation, the national core rate for February showed a small year-over-year increase as expected, but in Japan, the bureau also releases current month information for the city of Tokyo. You guessed it: the Tokyo core rate for March showed a decline of -0.4% y/y, which was a larger decline than what was expected. This measure of Japanese inflation has now printed with a negative number for 15 consecutive months. Down goes Frazier.

Vive la France. Indeed. Just maybe not so much the French consumer. As S&P futures were trying to rally in the wee hours this morning, March CPI for France missed expectations, and French consumer spending for February made like a pea rolling off a table. Our mini-rally in the S&P futures markets did likewise. Since then, March inflation specifically in Italy, as well as for the European Monetary Union in general, has also disappointed. It would be easy to blame the weakness on the warm weather, which reduced demand for heating fuel across Europe, but inflation slowed for food, tobacco, alcohol, and the service sector as well. This provides the doves at the ECB with any ammunition they might need to slow down the hawks, who might have otherwise been looking to place upward pressure on interest rate policy, or ramp up the expected pace of tapering the ECB's quantitative easing program.

Night Vision

The data here in the U.S., though, has been stronger as the calendar moved into late March. Fourth-quarter growth was suddenly less awful than thought prior. Home prices and measures of confidence peaked. February data on the trade balance and inventory building showed marked improvement (more important than you think), and oil prices climbed out of their hole. All of this while talk of a renewed effort on health care reform and tax reform made the rounds in the nation's capital. What that did was lend a helping hand to that very reflation trade here in the U.S. In addition, what seemed like several thousand public appearances made by Fed officials kept the central theme of rising rates in the conversation.

It should then come as no surprise that financial shares led the way yesterday. The sector scored a general gain of about 1.2% yesterday, while the KBW Banking Index jacked 1.8%. The energy sector also performed well, as WTI crude found support above $50 a barrel. This being the last day of the quarter could allow for some marketplace sloppiness. Be mentally prepared. If you have a plan (you should), this is the kind of day that may provide an unexpected opportunity in names that you thought that you might have missed. This is also the kind of day that can shake traders out of "well thought out" positions if the wrong cages end up being rattled. Don't let yourself be rattled.

Trader Focus

With that in mind, remember that we are less than two weeks away from earnings season. This season is expected to be a strong one. The weakest projections that I have seen have S&P 500 earnings growth are running at a rise of 9.1% for the first quarter on a year over year basis. I have also seen multiple estimates above ten percent. To put this in perspective, the fourth quarter of 2016 grew 4.9%.

That 4.9% growth ended up looking like a jump of 22.3% when measured as after-tax profits in aggregate. Want more? Those profits also represented 9.2% of fourth-quarter GDP, up from 7.8% in the fourth quarter of 2015. And this, with the earnings recession still fresh in everyone's mind. In other words, you've done the work, you have in place a core ethos of discipline. So, then, believe in yourself. Don't be shaken out.

Macro

08:30 - Personal Income (February):Expecting 0.4%, January 0.4% m/m.

08:30 - Consumer Spending (February):Expecting 0.2%, January 0.2% m/m. Income is expected to have increased at greater rate than spending in February, which would be the second consecutive month. This could have something to do with the ongoing burst in confidence seen across the consumer space. To understand the desperation of the American consumer and to illustrate this possible change in trend, prior to the January data, growth in spending had outpaced growth in income seven times in a nine-month stretch.

08:30 - PCE Price Index (February):January 0.4% m/m, 1.9% y/y.

08:30 - Core PCE Price Index (February):January 0.3% m/m, 1.7% y/y. This is it. The most important macroeconomic item of the day and indeed, one of the most important items that we see all month. The focused-upon number in this space from a monetary policy point of view, and therefore a markets point of view would be the year-over-year print for core PCE. This is how Janet Yellen and the FOMC judge consumer level inflation. For comparison's sake, February Core CPI printed at 2.2% y/y.

09:00 - Fed Speaker:New York Fed Pres. William Dudley was again hawkish on rates yesterday. He also opined that once balance sheet management is outlined, the tapering method should be used as to not tighten monetary conditions too rapidly. I really can't argue with that, but I would like to hear something on the balance sheet sooner rather than later. Today, Dudley will grant an interview to Bloomberg TV.

09:45 - Chicago PMI (March):Expecting 57.1, February 57.4. Consensus view really has almost nothing to do with the actual reading for this wildly inconsistent item. One thing is certain. Expectations are for business conditions in the Chicago region to have expanded for a 10th consecutive month. This item seems to have less of an impact on the marketplace than it did in years past.

10:00 - U of Michigan Consumer Sentiment (March-rev):Flashed 97.6. Like the similar, consumer confidence survey, this data-point has printed at elevated levels ever since the election in November. Unlike that other survey, this item seems to be running sideways since hitting a high in late December, whereas the confidence print just keeps seeing better levels, now standing at a 16-year high. The markets often do react to this release.

10:00 - Fed Speaker:Minneapolis Fed Pres. Neel Kashkari speaks today from Minneapolis. Today's event is expected to center on banking law. However, keep in mind that not only is Kashkari a voting member on policy this year, he was also the lone dissenter at the March meeting when the fed funds rate target was raised for the third time this cycle. Agree or disagree, Kashkari has displayed the ability to think for himself, which among this crew does deserve some respect. He will have the ability to move the market.

10:30 - Fed Speaker:St. Louis Fed Pres. James Bullard is set to speak from New York City on the economy and on monetary policy. This should be an interesting speech, given Bullard's long-term inability to stick with any one message. Most recently, the leader in St. Louis has been OK with another rate hike this year. Bullard is not a voting member of the FOMC this year, which is probably a good thing.

13:00 - Baker Hughes Rig Count (Weekly):Last Week total 809, oil 652. This number seems to just keep ratcheting higher, and there are plans to take it further. I really can't wait to see what this count looks like next week if the gains made by the commodity can hold for a few more days. Go Permian!

Sarge's Trading Levels

These are my levels to watch today for where I think that the S&P 500, and the Russell 2000 might either pause or turn.

SPX: 2384, 2376, 2369, 2363, 2352, 2345
RUT: 1405, 1398, 1389, 1379, 1372, 1363

Friday's Earnings Highlight (Consensus EPS Expectations)

Before the Open: (BBRY) ($0.00)

At the time of publication, Stephen Guilfoyle had no positions in the stocks mentioned.