The calendar is noticeably lighter this week, but after all the critical reports last week, it is a nice breather.

One of the few reports to watch this week is the Retail Sales report for February. This report is released on Thursday morning, and in what seems like a repeat of the last few months, it is expected to show a decline.

This really shouldn’t come as a surprise given the worsening economy. While I am fairly sure the report will show a decline, I am not sure if it will be greater than expected or not as bad. The reason to expect a larger decline than anticipated is simple: the economy keeps getting worse. On the other hand the report may not be as bad as expected because Personal Spending rose in January, and could have a carry-over effect on the retail report. For example, last Thursday Wal-Mart announced that sales more than doubled in February versus a year ago. Wal-Mart is large enough to rescue the whole sector, if it can remains to be seen.

The other report to look at is the preliminary Michigan Sentiment report for March. This is expected to show no change from the February reading. I doubt very much that it comes in unchanged, and with all the job losses and bailouts, I would expect a lower reading than 56.3.

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