I'm contented. The world knows who and what they are.

By Craig Fehr February 24, 2020
The spreading virus raises the temperature on the market.
The U.S. equity market was down more than 2% on Monday (Feb. 24) as reports over the weekend showed that confirmed cases of the coronavirus have picked up outside China, including outbreaks in South Korea and Italy. Somewhat encouraging, the pace of new reported cases within China has moderated slightly, but the economic impact in the world's second-largest economy is increasingly significant given ongoing factory closures, supply chain disruptions and city lockdowns that are wiping out a large portion of consumer spending.
The economic impact is meaningful but temporary.
U.S. economic growth is likely to take a modest hit this quarter as efforts to contain the virus have curbed air travel, international business activity and domestic companies’ foreign production and sales in China. As a result, U.S. GDP growth is likely to drop below 2% this quarter for the first time since late 2018.

That said, we don’t think this will knock the economy off its expansionary path, as U.S. household spending (70% of the economy) is less affected at this point. GDP growth contracted by 1.1% in Q1 2014 due to severe weather (remember the “polar vortex”?), dropped to 0.1% in Q4 2015 as oil prices and production plunged and fell to 1.1% in Q4 2018 amid Federal Reserve rate hikes and the manufacturing slump. None of these marked a recessionary turn with GDP rising in the following quarters.1

A prescription for higher volatility.
Stocks don't take well to uncertainty, and given the ongoing uncertainty around the effectiveness and timelines of containment efforts, it's unlikely market anxiety will subside quickly. This is not insignificant for near-term market performance, as we believe global GDP and corporate earnings estimates will need to be revised lower for the first half of 2020.

That said, we don't view this as a turning point in the economic expansion, nor do we see this as a catalyst for more restrictive monetary policy. Some economic output will be lost, but most will be delayed. As such, we'd expect a rebound in Chinese and global growth in future quarters. The foundation of this bull market has been (and will continue to be) an expanding economy, rising corporate profits and accommodative Fed policy – all of which are poised to remain intact for the year ahead.

Monday’s drop (2/24/2020) is the largest daily drop in the stock market in more than six months. A drop of 1,000 points in the Dow is certainly an attention grabber, but a wider view provides a much more useful perspective. Even with today's decline, the stock market is still up year-to-date and has gained 19% over the past 12 months. Moreover, stock market volatility has been notably subdued for the past several months, so a return of volatility should be viewed as more the norm than the exception. Over the past three years, the S&P 500 has had 19 days in which it fell more than 2% – none of which kicked off a longer-term downturn.2
We doubt the growing risks related to the coronavirus outbreak will blow over immediately, so further volatility should be anticipated. But we also doubt this will permanently impair the broader fundamental backdrop of economic expansion and low interest rates, supporting the case for the bull market to persist as we advance through 2020.

"The misuse and misspelling of words are so prelevant in today's society" - Sal Governale.

?? I used the word perfectly.

con·tent·ed
/kənˈten(t)əd/
adjective
happy and at ease.
"I felt warm and contented"

willing to accept something; satisfied.
"I was never contented with half measures"

?? I used the word perfectly.

con·tent·ed
/kənˈten(t)əd/
adjective
happy and at ease.
"I felt warm and contented"

willing to accept something; satisfied.
"I was never contented with half measures"

Inconsistent tenses

?? I used the word perfectly.

con·tent·ed
/kənˈten(t)əd/
adjective
happy and at ease.
"I felt warm and contented"

I see. So I would have to had said "I was contented" as its in the past tense there. In this case it was present tense so "I am content" would be more appropriate. Makes sense. I have heard it used both ways. But that makes more sense if you think about it.

Its nice when you can learn something on the Forum.

That’s quite a whopper?

Here we go again. -320. Headin' south.

Yep, SPX broke support and then dumped quick, if it continues, next stop ~3075.

If this is the case are you going short? There is always money to be made in a market going up or down.