Reasonable Valuation Targets

What’s in Today’s Report:

  • Where Is a Reasonable Valuation for this Market?
  • Two Reasons Gold Is Losing Its Luster

Futures were “limit up” for much of the night following Monday’s rout but have since pulled back to flat as fears of a coronavirus induced recession to continue to grip markets.

Overnight, the German ZEW Survey was dismal with the Current Conditions Index crashing to -43.1 vs. (E) -25.0 underscoring the rapid deterioration in investor sentiment due to the COVID-19 outbreak.

The Fed Meeting has been canceled following Sunday’s intermeeting actions and there are no Fed speakers today.

There are a few notable economic releases to watch this morning, however. In order of importance they are: Retail Sales (E: 0.1%), Industrial Production (E: 0.4%), Business Inventories (E: -0.1%), Housing Market Index (E: 74), and January JOLTS (E: 6.500M).

The first two are especially important as if the data points confirm that economic growth materially slowed in February as a result of the coronavirus outbreak, it could cause more fear-induced selling today as hopes for a swift rebound in growth will continue to fade.


Of course, any noteworthy updates on the COVID-19 pandemic, positive or negative, will continue to have a significant influence on the market and volatility is likely to remain elevated.