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After setting new post-crisis highs on Friday, stocks took a little tumble.First the scoreboard:
Dow: 13,880, -129.7, -0.9 per cent
S&P 500: 1,495, -17.4, -1.1 per cent
NASDAQ: 3,131, -47.9, -1.5 per cent
And now the top stories:
- It was a relatively quiet day for economic news and earnings announcements. This morning, we learned that factory orders climbed by just 1.8 per cent in December. This was much lower than the 2.3 per cent gain expected.
- According to the Federal Reserve’s Senior Loan Officer Opinion Survey: “In the January survey, generally modest fractions of domestic banks reported having eased their standards across major loan categories over the past three months on net.”
- “Easier lending standards are usually associated with later employment growth,” said UBS economist Ethan Harris at a luncheon in December. So the Fed’s survey should be interpreted as good news.
- The Italian and Spanish markets tanked today. With elections coming up this month, political uncertainty is back on the rise and it’s taking a big bite out of the markets.
- Most strategists aren’t too worried about today’s sell-off saying that it’s just some profit-taking. Market guru Ed Yardeni thinks a melt-up could send the S&P surging 1,665. Citi’s Top Equity Strategist Gives His 18 favourite Stocks In The World >
- But there are plenty of strategists who are a bit more concerned. Goldman’s Jim O’Neill, thinks stocks can continue to go up, but he warns that they aren’t cheap from a valuation perspective. Raymond James’ Jeff Saut thinks President Obama’s February 12 State of The Union address will be followed by a correction of 5-7 per cent.
- Contrarian investors will point to this week’s ultra-bullish Barron’s cover as a reason to sell.
- Yum Brands announces earnings after the bell. Analysts will want to know how much chicken sales are getting slammed in China. Economists will be listening for any insight on the health of the Chinese consumer. Follow the release LIVE on BusinessInsider.com.
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