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The 2 Events Traders Are Watching

What's next? With the end of the quarter, two events are on the minds of traders:

1) the Financial Accounting Standards Board (FASB) meets on mark-to-market Thursday. The expectation is they will make changes, but how far will they go? They cannot eliminate mark to market; if it goes, there will be no reason for banks to sell their bad assets under the public/private partnership.

2) earnings guidance. Alcoa kicks off earnings season this Monday. Everyone believes that guidance will be downbeat and generally below expectations.

The bulls are hopeful that mark-to-market changes will offset the downbeat earnings guidance.

How bad will the guidance be? Crane maker Manitowoc does not offer much comfort to the bulls.

Yesterday, it said Q1 earnings would be 50 percent below estimates, and withdrew guidance for the rest of the year. Demand for cranes continues to decline.

Another well-known industrial company, Ingersoll-Rand, today slashed its quarterly dividend 61 percent to $0.07 per share and said it would raise additional capital. The company also cut its first quarter and full-year earnings and sales guidance significantly below Street forecasts.

This is only two companies, but it is indicative of the bears' arguments: that signs of a bottom are still tenuous at best, and that we can still go either way.

Bulls argue that a spate of new government programs will start to make a difference in the second quarter.

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