Is There Actually A Sell Button On People's Keyboards?

Equities start the day lower as maybe risk is returning to the market? It’s been so long since I’ve seen red futures that I can’t even describe it anymore, is there actually a sell button on people’s keyboards? I mean is it possible that higher interest rates finally matter? I guess we’ll see but first we need to talk about this crazy news story I woke up to. Apparently JPM, AMZN, and BRK are going to band together to try and figure out a way to save their employees from the misery that is the U.S. Healthcare System. A system that charges me $525 for a Physicians Assistant to tell me that my son stubbed his toe and that I just wasted my entire morning in the clinic. Look, I’m on the record saying that whoever brings price clarity to this goat rodeo will be richer than Bill Gates so I’m all for it. I’ve sat here and talked to our Financials Trader about starting some kind of local app where people input the cost of their procedures and we crowd source the cheapest price. If the giants of banking, cardboard box shipping, and cherry coke drinking decide they are going to lead the way then let’s go baby, let’s break up this insurance monopoly.  An MRI cannot possibly cost 20 different prices.  Let’s simplify the easy stuff then move on to pricing heart surgery. Anyway, futures were lower because Asia gave up 1.5%, Europe 0.5-1%, and Treasury yields were marching higher. Will this route take back all of Friday’s gains? Stay tuned to find out.

After the open we stumbled all the way down to a gain of 5.7% in January. You could cut the tension with a knife and people ratcheted down their annual return expectations from +28% to +25%. Let’s keep it real for a second: yes, the market sold off 1.2% in the first hour and yes, the market is about 2% from its highs but you what? I’ll take a selloff seriously why credit spreads quiver and the VIX soars and correlations start trending higher. Has momentum been broken?  Probably, but weren’t we all saying that we needed a “healthy pullback”? Let’s knock 5% off the market before getting our feathers ruffled. Ok, let’s talk stocks and jocks. UNH, ANTM, CI, and AET all cratered on that insurance news but I doubt shareholders are crying in their Bugattis, most of those stocks are up 50-60% over a 1 year period. Energy got shellacked with Crude dropping 2% and racy sectors like Financials and Industrials fell because they’ve gone up every day for months. Look, this is likely a run of the mill pullback from the highs but if I see anything that makes me nervous you’ll be the first to know. Winners were utilities and telecom but there’s only about 32 of those in the S&P so nobody really cared. Who is going to win the Superbowl you say? Probably the Patriots and if you aren’t sick of Boston by now we can’t be friends. They are the freaking Evil Empire, I’d rather see Duke Basketball, the Yankees, the Cowboys, and Kim Kardashian all score huge wins before Brady hoists another trophy. Sigh. By lunch we were down 1% with things looking grim. 

The rest of the day featured more of this with a close at 2,822 down 1.09%. It’s been so long since we’ve had a meaningful pullback that a 2 day, 1.7% move feels like the Crash of ’87. Finance Twitter has been aching to call top for so long that any down move seems mega serious. I do wonder though….with macro data strong and global growth accelerating is this really the time to get nervous? Maybe…my friend @helenemeisler pointed out that tops are made on good news so perhaps I should be more vigilant. I just don’t know…does anyone think the market is going to correct significantly with this happening? I mean do you wanna be on the other side of that when the man…comes around (god I love this song so much.  Gimme credit for working Johnny Cash into a market recap). 

Final Score:  Dow -137bps, S&P500 -109bps, Nasdaq -86bps, Rus2k -96bps

News Highlights:

Tonight I have a link for all my dad bros out there.   If you have a kid (or multiple kids) under the age of 10 then this link is for you!   (look, it plays off the “F” word so if that kind of thing bothers you maybe don’t click.   In fact if that’s the case my recap style probably isn’t for you…

Have a good night