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March Madness starts on Tuesday with the 64/65 game. For the overwhelming majority of bracket pools, the deadline is Thursday. As a result, productivity will definitely be lower on Thursday and Friday as college basketball fans everywhere watch their brackets get blown, potentially by schools such as Creighton, Vermont, VCU and Winthrop. Look for Big 12 schools to go deep in the tourney this year. (In the interest of full disclosure, I am a Kansas alum, my wife went to Texas and my grandfather was an Aggie, but I’m not biased...)

Adding to the fun, Friday will be a triple witching day. Triple witching occurs when stock options, index options and futures contracts expire on the same day. These multiple expirations can lead to volatility, though the Stock Trader’s Almanac says when triple witching occurs right before St. Patrick’s Day, the markets are usually up. Call it the luck of the Irish.

Last Friday’s performance was certainly being helped by the employment data. Nonfarm payroll growth came in about as expected. I still expect daily fluctuations to continue though. The reason is the continued downward drift in full-year forecasts combined with a diminished number of earnings reports (less than 150 confirmed for next week). The average S&P 1500 company is currently projected to generate profit growth of 15.3% versus the four-week old projections of 16.3% growth. (The numbers are adjusted to exclude the impact of outliers.)

Nonetheless, we could get some type of catalyst from Goldman Sachs (NYSE:GS), Lehman Brothers (LEH) and Bear Stearns (NYSE:BSC). Both fiscal first-quarter and full-year earnings estimates have been revised up on all three companies within the past 30 days, a bullish sign (and in contrast to what we have seen for the broader universe of stocks).

Economic data could also have some influence, particularly late in the week. February retail sales and January business inventory data will be released on Tuesday. Wednesday brings February import prices and fourth-quarter current account reports. Thursday gets more interesting with February PPI and March New York and Philadelphia Fed indexes. The week ends with February CPI and industrial production/capacity utilization data being published along with the preliminary March University of Michigan consumer confidence index.

Companies That Could Issue Positive Earnings Surprises During the Week of Mar 12 - 16

Networking and Internet company Cogent Communications (NASDAQ:CCOI) has delivered a positive earnings surprise for three consecutive quarters. Brokerage analysts currently expect the company to report a loss of 23 cents per share for its fourth quarter, a penny better than they had forecast a week ago. Notably, forecasts for 2007 have also been improving and now call for a loss of 69 cents per share (versus 70 cents a month ago and 73 cents two months ago). Cogent Communications is scheduled to report on Monday, Mar 12, before the start of trading.

And now, onto those investment bankers….

Goldman Sachs (GS) is viewed by some as a bellwether for the financial industry. The firm has generated six consecutive positive earnings surprises, most recently topping fiscal fourth-quarter estimates by 78 cents per share. Last week, the consensus estimate for fiscal first-quarter profits edged up by a penny to $4.94 per share. Full-year forecasts have also been rising, even during the past seven days. Investors should be aware, however, that the Most Recent Consensus is more bearish at $4.89 per share, suggesting a more conservative outlook on the part of at least one of the covering analysts. Keep in mind that the drop in the Asian markets occurred very late in the quarter for all three of the investment banking firms reporting next week. Goldman Sachs is scheduled to report on Tuesday, March 13, before the start of trading.

Lehman Brothers (LEH) has not missed earnings expectations in more than four years. The Most Recent Consensus of $2.06 per share suggests the streak could continue. During the past 30 days, brokerage analysts have raised their projections for both fiscal first-quarter and full-year profits. Lehman is scheduled to report on Wednesday, Mar 14, before the start of trading.

Bear Stearns (BSC) is also riding a streak of consecutive earnings surprises that is more than four years old. During the past 30 days, the consensus estimate for fiscal first-quarter profits has improved by four cents to $3.82 per share. The Most Recent Consensus is more bullish at $3.97 per share. Bear Stearns will report on Thursday, Mar 15, before the start of trading.

Companies That Could Issue Negative Earnings Surprises During the Week of Mar 12 - 16

In early February, Pacific Sunwear (NASDAQ:PSUN) cut its fourth-quarter earnings guidance to a range of 36 cents to 38 cents per share, citing weak January sales. Yesterday, the company said same-store sales in February dropped 5.7%, an indication that the weakness has continued. Brokerage analysts have not adjusted their consensus forecast for earnings of 37 cents per share in response to the new data, but investors should note that PSUN has missed earnings expectations for two consecutive quarters. Pacific Sunwear is scheduled to report on Thursday, Mar 15, after the close of trading.

This week's Earnings Preview was provided by Charles Rotblut, CFA, Senior Market Analyst for