Apparently, stocks can also fall in 2019.
In case you needed evidence, the S&P 500 SPX, +1.09% , Dow DJIA, +0.55% and Nasdaq COMP, +1.66% proved that last week with all three in the red for five days in a row, which hasn’t happened since 2016.
So much for that big bounce off December lows?
Of course, nobody — with a few bearish, and increasingly desperate, exceptions — is really pushing the panic button just yet. The market’s proven far too resilient to be thrown off by a few down days. Just look at Monday’s action.
But Michael Wilson, Morgan Stanley’s top U.S. equities strategist, believes investors might be buying into the Goldilocks narrative: Economy’s not too hot, and it’s not too cold. Hello new highs for stocks and tighter spreads for credit.
Not so fast.
“What if growth isn’t ‘just right’ and Goldilocks is the wrong fairy tale?” he wrote in a note to clients. “I see other reasons for the growth slowdown that have been underappreciated by most market analysts.”
Among them, he pointed to corporate capex and buybacks getting a significant boost from the tax cuts and repatriation of overseas cash — one-time boosts. Also, Wilson said higher labor costs and logistics are “definitely starting to bite.”
Then, of course, there’s Friday’s disappointing jobs report, which registered the smallest gain in new jobs since September 2017.
“Rather than Goldilocks,” Wilson explained in our call of the day, “perhaps we should be talking about Hansel and Gretel — a fairy tale about the dangers of an unwholesome appetite as a means of survival — i.e., chasing prices higher and justifying it with the wrong narrative.”
Not much in the way of rising prices to chase higher this morning, with the Dow having trouble getting any momentum largely due to Boeing.
The market
After some early weakness, the Dow DJIA, +0.55% managed to barely break into positive territory, following the S&P SPX, +1.09% and Nasdaq COMP, +1.66% solidly higher. Gold prices GCJ9, -0.50% felt some stiff risk-on headwinds and were down at last check. Crude oil CLJ9, +1.30% was rallying more than 1%. Europe stocks SXXP, -0.11% were under pressure much of the day, while Asia ADOW, -0.81% clawed back some gains in an upbeat session.
The buzz
Renewed safety questions surrounding the newest version of the Boeing BA, -5.86% 737 are popping up after a devastating Ethiopian Airlines crash Sunday killed all 157 people on board. The stock was getting hammered. China’s Civil Aviation Administration ordered the temporary grounding of all Boeing 737 Max 8 aircraft flown after the crash. The Dow heavyweight is down 8% in premarket, with Southwest LUV, -0.73% and American AAL, +0.42% , other 737 Max 8 customers, down as well. Southwest said in a statement that it’s staying in touch with Boeing and has confidence in its fleet of planes.
But it looks like some fliers are not feeling so easy this morning.
Two brand new Boeing 737 Max 8 airplanes crashed in 5 months. If China has grounded all 96 of its 737 Max 8s, then Southwest, American, and United Airlines should really do something to reassure the American people that its 737 Max 8 airplanes are airworthy or ground them too.
— Eugene Gu, MD (@eugenegu) March 11, 2019
Federal Chair Jerome Powell turned into a cheerleader for the economy in an interview with “60 Minutes” Sunday. “We’ve seen a bit of slowing, but still to heathy levels, in the U.S. economy this year,” he said. “I would say there’s no reason why this economy cannot continue to expand.” A weak December retail sales report and a lackluster gain in jobs reported Friday have raised concerns that the slowdown may be more severe than the central bank now expects.
Tesla TSLA, +1.51% shares were rallying after the company backed off a bit of a promise to cut prices on all its cars and move sales online. The electric-car maker said it will likely keep significantly more physical stores open, which will halve the savings it had hoped to pass onto to customers.
Levi Strauss has priced its initial public offering, saying it’ll offer 36.7 million shares for $14 to $16 each.
In deal news, Nvidia NVDA, +7.00% says it’ll buy acquire Israeli server and storage company Mellanox MLNX, +8.17% in a deal valued at $6.9 billion. Both stocks were gaining ground on the news.
Worried about robots taking your job? Don’t be, according to Alexandria Ocasio-Cortez. “We should not be haunted by the specter of being automated out of work. . . . We should be excited by that,” she said in Austin, Tex. over the weekend. “But the reason we’re not excited by it is because we live in a society where if you don’t have a job, you are left to die. And that is, at its core, our problem.”
The chart
The Visual Capitalist crunched data from the most recent edition of the Knight Frank Wealth Report to come up with this map of where the rich roam. As of 2018, a total of 198,342 ultra high net worth individuals with assets over $30 million are sprinkled around the globe. This is where to find them:
The stat
More than 17 million — That’s how many young Americans have quit Facebook FB, +1.90% in the last two years over the data privacy scandals, according to a report from market research firm Edison Research cited in the Daily Mail.
The quote
“At restaurant tonight waitress asks if we want straws. Says she has to ask now in fear of ‘THE STRAW POLICE.’ Welcome to Socialism in California!” — California Republican Devin Nunes, in a tweet Saturday evening.
The economy
Data showed retail sales rebounded slightly in January, after the biggest drop in 10 years. At 10:00 a.m., the state employment and unemployment report will be released. Other highlights this week included the CPI for February on Tuesday and new home sales on Thursday.
Read: After deluge of bad news, now it’s a waiting game to see if the U.S. economy perks back up
Random reads
Tucker Carlson offers up some VERY questionable comments.
This really is a disastrous look for Erik Prince. It’s also a lesson in house more journalists should be conducting interviews.
Miss, please don’t try to pose with the jaguar.
Elderly people are dying before they get to read Mueller’s report, and they’re apparently not at all happy about it.
Pennsylvania man claims to have R. Kelly tapes.
This guy made a killing on peace stocks after Trump-Kim summit.
Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. Be sure to check the Need to Know item. The emailed version will be sent out at about 7:30 a.m. Eastern.
Follow MarketWatch on Twitter, Instagram, Facebook.
Providing critical information for the U.S. trading day. Subscribe to MarketWatch's free Need to Know newsletter. Sign up here.
