Five Things We're Watching: March 25, 2011

Teflon Market: The Portuguese government is collapsing, oil remains at $105, Gaddafi is still in charge and there is a bottled water shortage in Tokyo. Yet the stock market continues to rise, with the Dow up 0.7 percent and Nasdaq 1.4 percent. This is turning out to be a resilient rally, with bulls taking control and many market watchers seeing recent headline risk leading to an oversold environment. Another reason for optimism: a sense that Saudi Arabia is well under control.

Smoking Hot Trades: As the market's climbed higher, what stood out? Since March 16, energy and materials have been the leading sectors, with financials and utilities lagging the broader indices. In that timeframe, oil's shot up a whopping 7.8 percent, while gold is also up 2.8 percent ... and the biggest S&P winner: Lorillard, up nearly 20 percent after an FDA panel stopped short of recommending a ban on menthol cigarettes.

Eyes on Iberia: The dust is settling on the Portuguese parliament's rejection of an austere budget, leaving markets and EU leaders alike pondering the possibility of bailout, round three (yup, Ireland & Greece, we don't forget you). While the immediate chain of events in Portugal will continue to impact the region significantly, the real fear resides in concern that troubles spread to Spain, a country whose $1.5 trillion economy dwarves any of the already failed EU states. Spanish banks were targeted by Moody's Thursday, as the rating agency downgraded thirty names in the sector. The three biggest players — Santander, BBVA and La Caixa — were spared from the cut. Eurozone leaders meet again in Brussels Friday.

iPad Around the World: Good news, Germany! Sure, debt may be engulfing all the countries around you, but you can order the second-generation iPad on Friday as the tablet goes on-sale in 25 countries. While demand for Apple products continues to be high, analysts are trying to get their heads around any supply chain problems triggered by the catastrophe in Japan. For those of you in the U.S., your best bet might be to take a red-eye to someplace like France and buy an iPad in store. As of now, there's a 3-4 week shipping wait domestically and Paris' Apple stores are meant to be lovely.

New Data for the New Fed: Just a little over a month until the unprecedented Fed news conference scheduled after the April 27 FOMC meeting, but plenty of key economic data points for guidance ahead of that. Final revisions of Q4 GDP are expected to be up 3 percent, an upgrade from the last revision of 2.8 percent. Later in the morning, the latest consumer sentiment data hits at 9:55 am, as Americans face the three-pronged challenge of a weak job market, a depressed housing market and escalated energy prices.