While many would label Ben Bernanke the April fool, the market might instead slap that tag on the foreheads of the countless pundits who came out last week calling the stock market’s bottom. However, Friday’s key employment report from the Labor Department holds the potential to sink shares into new low territory and make the pundits look foolish.

The market moved lower last week, but lost some pizzazz, which is a good thing in this case. Volatility diminished, which is perhaps a sign that bad news is getting old, while hope remains on the back burner for later offering. The Dow Industrials moved lower 1.2% on the week (-7.9% Ytd.), while the S&P 500 fell 1.1% (-10.4% Ytd.). The Nasdaq Composite actually rose fractionally, which illustrated the hopeful nature of the market last week. When we eventually begin rising in earnest, you can expect low-quality growth stocks to lead the way, in our view.

Whether we experience a special economic contraction this time around, or just one of average variety, should depend greatly on how well the Fed is capable of keeping capital flowing to vital organs. I hear you! This is at the expense of the dollar... Still, the reason I'm encouraged by Fed effort is because I have great concern about the leverage that pervades our every facet of life. I do not think that quitting the addiction of leverage cold turkey is worth the pain of withdrawal from liquidity, as I'm not sure we'll survive it. We need to wean the economy back to health and then wean ourselves off leverage through stricter regulation. Force feeding America, and the financial system, to suddenly find religion will only hurry our race to financial Armaggeddon.

The Week Ahead

Monday

The first quarter ends, and the week kicks off with news from the Midwest, when the National Association of Purchasing Managers – Chicago reports on the area’s manufacturing condition in March. Considering that the Philly Fed Survey posted a negative 17.4 and the Empire State Manufacturing Survey was measured at negative 22.2, we would be surprised to find good news even from the Midwest at this point in the economic cycle. Bloomberg pinpoints economist expectations close to ours, with the consensus looking for a reading of 46.0 in March. Recall that a measure short of 50.0 signifies economic contraction and matches with the results of New York and Philadelphia regions.

Treasury Secretary Hank Paulson is scheduled to make a speech on recent issues, while San Francisco Fed President Janet Yellen is set to talk about foreclosures and community development.

The Democrats are supposed to decide on whether to invite the potentially influential Floridian delegation to their convention. The USDA will issue its crop report, as commodity traders anxiously await to see how particular plants stand in farmers' acreage plans.

Earnings lighten considerably this week, but expect reports from H.B. Fuller (NYSE: FUL), Abraxis Biosciences (Nasdaq: ABII), A-Power Energy Generation Systems (Nasdaq: APWR), Banks.com Inc. (AMEX: BNX), Carrington Laboratories (Nasdaq: CARN) and Clarient Inc. (Nasdaq: CLRT).

Tuesday

We’ll have a second serving of manufacturing news, when the Institute for Supply Managers reports its manufacturing index for March on Tuesday. February’s data measured at 48.3, again representing contraction of business activity. Economists expect the index to reach only 48.0 this time around, according to Bloomberg.

Motor vehicle sales are reported at the beginning of each month, and you can expect an April Fools' joke of a report this time around. We here at The Greek will be keen to see this week’s ICSC-UBS same-store sales data, considering last week’s report showed growth cut off at the knees, with sales rising just 1.0%. This compared to growth rates upward of 2.0% in February.

Construction spending in February is seen having decreased 1.1%, compared to a decline of 1.7% in January. Of important international note, Japan's tanken survey of March business sentiment is due on Tuesday.

In equity market news, Russell Investments expects to launch global equity indexes. In Vegas, the very interesting CTIA Wireless Industry show kicks off. Tuesday's earnings include Immucor (Nasdaq: BLUD), Adstar Inc. (Nasdaq: ADST), Alseres Pharmaceuticals (Nasdaq: ALSE), Exfo Electro-Optical (Nasdaq: EXFO), OMNOVA Solutions (NYSE: OMN), Rus Berrie (NYSE: RUS) and Telkonet (NYSE: TKO).

Wednesday

Starting on Wednesday, the economic community goes on employment watch, with the regular monthly bombardment of jobs data beginning. The first news will come from the Challenger Job-Cut Report before the market open. This data offers a look into the monthly planned layoffs of American companies. After starting the year mildly, the last two months of data have offered upward of 70K planned firings.

Also before the market open Wednesday, ADP will post its employment report that covers job market changes in the private sector. This data, which acts as a preview to the Labor Department’s pending news, turned negative last month, when 23,000 jobs were reported lost. Many of those recently unemployed folks held positions in the manufacturing sector. So, it should be no surprise then why economists expect factory orders to post a decline of 0.6% for the month of February.

Every Wednesday brings two regular reports. In the early morning, the Mortgage Bankers Association posts its take on weekly mortgage activity. After long-term rates declined sharply (0.24%) on the last fed funds rate cut (0.75%), mortgage applications came to life according to last week's data. Refinancings of course led the way, and that has to be a good thing. The Fed might have finally found critical threshold to help Americans lower their capital costs, and for a lucky few who may still have equity in their newly purchased abode, an opportunity to get out of difficult loan agreements.

Also reporting on a regular basis, the EIA Petroleum Status Report is once again important to traders. Speculation has left the building, and investors are now concerned about domestic consumption in a recessionary environment. Also, the strategic oil reserve has been topped out, so one special source of draw is off the table. In other words, all signs point to lower oil prices... except Iran, which looms as an ever present event risk. Oh, and then there's the dollar...

Just in time to take credit for mortgage activity, the Fed Chief will be in the spotlight a couple times this week. Bernanke will reach Capitol Hill on Wednesday, as he testifies before the Joint Economic Committee, addressing the economic outlook.

Wednesday earnings include Research in Motion (Nasdaq: RIMM), Best Buy (NYSE: BBY), Micron Technology (NYSE: MU), Monsanto (NYSE: MON), AngioDynamics (Nasdaq: ANGO), Blonder Tongue Labs (AMEX: BDR), CarMax (NYSE: KMX), Finlay Enterprises (Nasdaq: FNLY), Landec Corp. (Nasdaq: LNDC), Lululemon (Nasdaq: LULU), RegeneRx Bio (AMEX: RGN), Rex Stores (NYSE: RSC), Ruby Tuesday (NYSE: RT) and UniFirst (NYSE: UNF).

Thursday

The Fed concludes its public appearance parade on Thursday as Bernanke sticks around the Capitol in order to testify before Congress on the Bear Stearns (NYSE: BSC), JP Morgan Chase (NYSE: JPM) deal. Ben will be joined by JPM's Jamie Dimon for some must see TV. Fed bosses Yellen and Mishkin are both set for evening appearances on Thursday.

Thursday offers the Monster Employment Index, which measures job postings at some 1,500 websites. The data is considered more important than the Help-Wanted Index, now that everyone gets their news online. The Monster Index decreased slightly last month to 165.

Weekly initial jobless claims takes a backseat this week to all the other employment data, but offered no comfort last week when reported at 366K. We have noticed the Bloomberg consensus figure regularly predicting no change in new claims, so either economists find difficulty in predicting week-to-week change or there are in fact no significant forecasts.

ISM’s take on the non-manufacturing sector comes Thursday morning, and since the service sector is so important to American economic growth, this report carries weight. February’s data came in at a still expansionary reading of 50.8, but economists are calling for a drop to 49.0 for the March measure. EIA's Natural Gas report is set for its usual release at 10:30 a.m.

Thursday's earnings reports include Acuity Brands (NYSE: AYI), Constellation Brands (NYSE: STZ), Cascade Corp. (NYSE: CAE), Hooker Furniture (Nasdaq: HOFT), Lawson Software (Nasdaq: LWSN), Matrix Service (Nasdaq: MTRX), Rostelecom (NYSE: ROS), RPM Int'l (NYSE: RPM), Saba Software (Nasdaq: SABA) and Schnitzer Steel (Nasdaq: SCHN).

Employment Friday

As the drum rolls, Friday brings the highly anticipated Employment Situation Report. Before the market opens, we will discover if unemployment increased from last month’s level of 4.8%. Remember, the unemployment rate did not make sense last month, since we lost jobs during the period. The government noted a high degree of individuals leaving the workforce altogether. But, these people did not officially leave the workforce because they retired fat and wealthy. Rather, unemployment benefits ran out for a good number of them.

So, this seemingly positive data actually represented rather dire news. How are those people suppose to now pay their mortgages, fuel their vehicles and even eat... Economists expect the unemployment rate to return to 5.0% in the March reading.

Nonfarm payrolls dropped sharply last month, and traders will be on edge as we await this month’s data, with the economy deeper in what most believe is recession. The consensus of economists surveyed by Bloomberg expects jobs to have decreased by 50,000 in March. The report threatens to sober up antsy market pundits, and make some look like April fools.

Friday's short list of earnings reports includes A. Schulman (Nasdaq: SHLM), Family Dollar (NYSE: FDO), The Mosaic Company (NYSE: MOS), AZZ Inc. (NYSE: AZZ) and Blyth (NYSE: BTH). Markets in China, Hong Kong and Taiwan are closed Friday.

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