"There are a lot of macro reports, and we'll certainly be looking at the Middle East. But I think the market is going lower because it needs to go lower," says Kenny Polcari, managing director at interdealer broker ICAP Corporates.
Among the macro data in focus will be personal income, personal spending and new vehicle sales, which the Street will dissect for a different perspective on inflation, the veteran New York Stock Exchange trader says.
"We're seeing [inflation] in food and energy, which concerns me a bit because the government keeps saying inflation is trending down," Poclari says. "But Joe Q. Public goes to the gas station and the grocery store and sees higher prices. If inflation gets out of control and people get concerned about the outlook again, consumers are going to pull right back in."
To top it off, Thursday brings initial jobless claims, and on Friday we get the mother-of-all reports, the monthly employment figures. Economists are looking for an increase of 150,000 nonfarm payroll jobs in January after a disappointing gain of only 103,000 in December. The unemployment rate is forecast to rise to 9.5% from 9.4%
With so much news landing this week amid so much geopolitical uncertainty, Polcari is looking for an extension of Friday's market retreat. "We've gone straight up," he notes. "In terms of a bullish trend, the market needs to correct a little bit before it goes higher."
For more on Polcari's take from the floor of the NYSE (NYX), see the video above.