What’s in Today’s Report:
- Pullback – Why Stocks Are Dropping and Is This the Start of a Correction?
- Weekly Market Preview: Focus on politics and growth.
- Weekly Economic Cheat Sheet: Durable Goods and inflation will be in focus this week.
Futures are down more than 2% as an increase in COVID 19 cases in new places (South Korea and Italy), combined with a big Sanders victory in the Nevada Caucus are adding to the growth concerns following Friday’s soft flash PMI.
Politically, Sanders won the Nevada Caucus with more than 40% of the vote, implying his base is bigger than thought, meaning he might be a more formidable opponent to Trump than what the market was previously thinking.
Economic data was sparse as the German Ifo Business Expectations survey beat estimates (93.4 vs. (E ) 92.1), but that number obviously isn’t moving markets.
Today there are no economic reports and just one Fed speaker, Mester (3:00 p.m. ET), so focus will be on any COVID 19 updates (and anything that hints at a slowing of transmission will help stocks bounce). From a fundamental support standpoint, 3,219 is 18.5X next year’s earnings so we’ll be interested to see if that can hold in the near term.