Valuation Update: Good, Bad, and Ugly

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What’s in Today’s Report:

  • Valuation Update: Good/Bad/Ugly Scenario Analysis
  • Technical Update: Not Necessarily Done Yet

Futures are slightly higher this morning and Asian stocks traded relatively well overnight despite yesterday’s selloff in the US while EU markets fell on soft economic data.

Italian GDP missed (0.0% vs. 0.2%) which led to some further risk off money flows amid the ongoing budget drama but otherwise, data in Europe was mostly inline overnight including German Unemployment figures, the Eurozone GDP Flash, and Eurozone Economic Sentiment.

Looking to the calendar in the US today, there are two second tier economic reports due out: S&P Corelogic Case-Shiller HPI (E: 0.1%) and Consumer Confidence (E: 136.3) and there are no Fed officials scheduled to speak.

That will leave focus on earnings: GE ($0.21), MA ($1.68), PFE ($0.76) before the open and FB ($1.46) after the close, and of course price action, especially in tech, will be very important.

For the S&P to gain material upside momentum, we will need to see a strong run to and through 2700 and then for that area to hold, otherwise an early gain followed by a pullback (like yesterday) will be more likely and the path of least resistance still lower for the very near term.