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March 29, 2018, 9:05 a.m. EDT

‘The correction has likely run its course,’ says Wall Street veteran

Critical information for the U.S. trading day

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By Victor Reklaitis, MarketWatch


Getty Images
It may be that investors now can come out of hiding, but don’t put all your eggs...

This market looks like it needs its three-day weekend.

The S&P 500 is up for the holiday-shortened week, but it’s also moping around a bit like a kid who doesn’t like her Easter outfit. It’s on track for a March slump of 4% and a first-quarter downswing of nearly 3%, with one trading session to go.

Read more: The Dow’s streak of quarterly gains is at risk of ending at nine

Buck up and have a chocolate egg. That’s the tone of our call of the day , a combo based on the latest from CFRA’s Sam Stovall and CrackedMarket’s Jani Ziedins.

“We believe the correction has likely run its course and is now working its jagged way back to breakeven,” Stovall writes in a report and on Twitter .

The veteran strategist and his colleagues are encouraged that the infamously pricey S&P is looking less expensive after its recent tumbles. The stock gauge is trading at 16.6 times forward-year estimated earnings, just slightly above its average multiple of 16.4 since 2000, Stovall notes. His shop is sticking with its 12-month price target of 3,000, though Stovall cautions that stocks may suffer one more drop of 5% or more this year.

Meanwhile, Ziedins warns the market could fall further, but his overall message is that investors shouldn’t be getting spooked.

“This is still a fundamentally sound economy, and the market is seeing ghosts where there aren’t any,” the CrackedMarket scribe writes in a note to clients .

He ain’t afraid of the tech wreck.

“The only people deleting Facebook /zigman2/quotes/205064656/composite FB +0.53% are the ones who rarely use it,” Ziedins says, adding that losing light users will have a minimal impact on the social-networking giant’s profit and revenue.

Check out: Can the stock market stand up to the tech wreck?

And see: Tech sector forfeits half a trillion dollars in value over 2-week span

He’s also not quaking at the prospect of new government regulations on Silicon Valley: “There is a regulatory risk that also extends to Google /zigman2/quotes/205453964/composite GOOG +0.63% /zigman2/quotes/202490156/composite GOOGL +0.64% , but it takes Congress forever and a day to pass new laws, so I wouldn’t expect anything soon.”

Key market gauges

Futures for the Dow  , S&P 500 and Nasdaq-100 are rising, after the Dow /zigman2/quotes/210598065/realtime DJIA -0.23%  , S&P /zigman2/quotes/210599714/realtime SPX -0.15% and Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -0.15% lost ground yesterday.

Europe /zigman2/quotes/210599654/delayed XX:SXXP -0.24% is advancing, after Asia closed mixed. Oil and gold are dipping, while the dollar index /zigman2/quotes/210598269/delayed DXY -0.04% is little changed. Bitcoin /zigman2/quotes/31322028/realtime BTCUSD -1.39% has been trading around $7,500.

See the Market Snapshot column for the latest action.

The chart

Ahead of Good Friday, Easter and Passover, investor and writer Jeff Macke is hoping the S&P 500 stays above its 200-day moving average.

His chart above also shows how the index has kept above its early-February low — so far.

Read: Which markets are closed on Good Friday?

Below is a bonus chart from Bespoke Investment Group. It highlights how confidence among older consumers just topped confidence among youngsters for the first time since 2000.

Oldsters have become more optimistic as interest-rates rise, as well as since President Donald Trump was elected, Bespoke says .


Bespoke Investment Group
What’s got into the oldsters?
/zigman2/quotes/205064656/composite
US : U.S.: Nasdaq
$ 202.11
+1.06 +0.53%
Volume: 6.80M
Dec. 9, 2019 1:57p
P/E Ratio
32.32
Dividend Yield
N/A
Market Cap
$573.49 billion
Rev. per Employee
$1.57M
loading...
/zigman2/quotes/205453964/composite
US : U.S.: Nasdaq
$ 1,349.11
+8.49 +0.63%
Volume: 765,008
Dec. 9, 2019 1:57p
P/E Ratio
28.97
Dividend Yield
N/A
Market Cap
$862.26 billion
Rev. per Employee
$1.39M
loading...
/zigman2/quotes/202490156/composite
US : U.S.: Nasdaq
$ 1,347.96
+8.57 +0.64%
Volume: 838,452
Dec. 9, 2019 1:57p
P/E Ratio
28.95
Dividend Yield
N/A
Market Cap
$861.47 billion
Rev. per Employee
$1.39M
loading...
/zigman2/quotes/210598065/realtime
US : Dow Jones Global
27,949.86
-65.20 -0.23%
Volume: 105.55M
Dec. 9, 2019 1:58p
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
3,141.26
-4.65 -0.15%
Volume: 789.58M
Dec. 9, 2019 1:58p
loading...
/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
8,643.55
-12.98 -0.15%
Volume: 1.20M
Dec. 9, 2019 1:58p
loading...
/zigman2/quotes/210599654/delayed
XX : STOXX
406.39
-0.96 -0.24%
Volume: 0.00
Dec. 9, 2019 5:50p
loading...
/zigman2/quotes/210598269/delayed
US : U.S.: ICE Futures U.S.
97.66
-0.04 -0.04%
Volume: 0.00
Dec. 9, 2019 1:48p
loading...
/zigman2/quotes/31322028/realtime
US : CoinDesk
7,459.18
-104.87 -1.39%
Volume: 0.00
Dec. 9, 2019 1:57p
loading...
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