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Equities still can’t find a floor as the newsflow on the spread of the coronavirus outside of China hasn’t shown any signs of improvement. What’s even more disconcerting is that the news headlines haven’t been all that bad yet either. Right now, it’s the fear of what could happen that’s driving the markets rather than what is actually happening. Meanwhile, just about every global equity market is trading lower right now, but China was actually up!
In economic data this morning, the only major outlier was a better than expected report on Durable Goods Orders. Jobless claims were higher than expected (219K vs 212K) but still not showing any early signs of stress in the labor markets.
Read today’s Bespoke Morning Lineup for a recap of the carnage in global equity markets overnight, the latest on the coronavirus, and a look at how the European economy was looking heading into the outbreak.
The S&P 500 is poised to open down another 1.5% this morning and that will bring the index ever so closer to reaching the 10% threshold for a correction. This current decline is already the steepest for the S&P 500 since the Q4 2018 near bear market, and if we reach the 10% threshold it will be the seventh such period since March 2009 where the S&P 500 dropped more than 10% from a bull market high. One notable aspect of this drop, though, is how fast it has happened which is very similar to the speed in which we dropped in early 2018 as well.