Pros Say: Sharp Market Pullback This Week

Encouraging numbers from an investment banking giant dominated discussion among the pros, who tied them to massive government stimulus efforts — and doubted they would carry ahead to economic numbers, or even to results from other investment banks.

Financials Show Surprising Strength; Consumers Still Look Weak

Scott Brown of Raymond James said there has been a real change in the attitudes and behavior of consumers, with fear now dominant. That is likely to be reflected in retail data this week, and there's no likelihood that consumer spending will rebound any time soon.

Ben Pace of Deutsche Bank Private Wealth Management said financial earnings have been surprisingly strong — but the rest of earnings season is not likely to be impressive.

What's Driving Doubts About Long- or Medium-Term Recovery?

Kevin Ferry of Cronus Futures Management said he's not impressed with the Goldman Sachs numbers because of all the government money that's been pumped into the system. The stimulus is heading in the right direction, though. The Fed notably reported last week that it is "bond spreads that dictate the economy more than any predictive value of the stock market." Where the Fed can push, it is pushing very effectively.

Debt Markets are 'Alive if Not Well'

George Ball, former president of EF Hutton, now chairman of Sanders Morris Harris Group, said the pleasing and powerful aspect of the numbers from Goldman Sachs is that they show that "those marketplaces that have to be vibrant are alive if not well." This indicates that institutions have had enough confidence to trade with each other, at least through the "big bond daddy," Goldman Sachs, to rejuvenate the moribund debt markets.

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That raises expectations for Morgan Stanley and the Merrill Lynch portion of Bank of America, , which report later this week.

Markets are Overbought; Retail Numbers = Long Way to Go

Disappointing retail sales numbers in March, after two stronger-than-expected months, show the consumer has not turned the corner after all, and may "go back in his cocoon," according to Art Cashin of UBS. The market is overbought and vulnerable to a pullback — perhaps even a sharp pullback over the next three days — with option expiration built in. He is hopeful we have set the lows for the cycle, although those lows may be tested, and he foresees a lot of "sideways churning for maybe months."

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