Asian markets are leading the way lower based on a report which showed the Japanese economy declined 12.1% during the fourth quarter in 2008.

Equity traders will react to today’s U.S. Retail and Business Inventory Reports. Calls are for a drop of between -0.3% to -0.5% in Retail Sales and a decline of -1.0% to -1.1% for Business Inventories.

This week’s rally demonstrates how sensitive the stock market is to news regarding banks. Tuesday’s up move was triggered by friendly news regarding Citigroup earnings. Late Wednesday, news that Chase was profitable during January and February triggered a late session rally. It will be interesting to note how many other banks step forward with similar news. If Chase and Citigroup are the only two willing to comment on earnings then the market may react to the downside on speculation the other banks are still losing money.

Technically, a two-day rally does not change the trend. Look for a pull-back to at least 50% of the week’s range. This means that the March E-mini S&P 500 may decline to 699.75 before new buyers step in.