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Coffee With Greta: S&P Falls Into Correction Territory


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DJIA Futures: +196 (+0.6%)

SPX Futures: +28 (+0.6%)

NASDAQ Futures: +135 (+0.9%)

Good morning friends!

Futures are bouncing back after the S&P slipped into correction territory for the first time in nearly two years.

Let’s get right to it!

S&P 500 Falls into Correction

The S&P 500 closed in correction Tuesday for the first time in nearly two-years. 

The index ended the session down 1% at 4,304. 

That’s down more than 10% from the last record close at 4,796 on January 3, 2022.

It’s the first time the S&P has been in a correction since February 27, 2020.

Russia Invades Ukraine

President Biden declared that Russia’s latest movement into eastern Ukraine is “the beginning of a Russian invasion.”

Biden announced economic sanctions against Russia after Moscow moved troops into Ukraine’s Donbas region. 

The U.S. is also increasing its troop presence in the Baltics in what Biden called a “defensive measure”.

The White House is working with Germany to ensure the Nord Stream 2 pipeline project does not move ahead. 

In an address with Secretary of State Antony Blinken, Ukraine’s Foreign Minister called on the world to “hit Russia’s economy now and hit it hard”.

Russian President Putin threatened war against Ukraine in a nationwide address, unless Kyiv abandons its desire to join NATO.

Ukrainian President Volodymyr Zelenskyy has activated reservists in response to the Russian troop movement but has not ordered a full military mobilization.

Russia-linked stocks fell sharply amid the conflict, the VanEck Russia ETF (RSX) closed 8.9% lower on Tuesday.

Virgin Galactic Beats Q4 Expectations

Virgin Galactic (SPCE) shares are up 3.3% ahead of the open after the company reported a smaller Q4 loss than expected.

The space-tourism company lost $0.31 per share on $141,000 in revenue. 

That was better than consensus estimates for a loss of $0.35 per share. 

Although revenue fell short of expectations for $300,000, it was up sharply from zero revenue in Q4 2020. 

The CEO said, “We remain on track and on schedule to complete our enhancement program and launch commercial service later this year.”

Teladoc Slips After Q4 Earnings

Teladoc (TDOC) shares are down 0.8% in premarket trade after reporting a smaller Q4 loss than expected.

The telemedicine company lost $0.07 per share on $554.2 million in revenue.

Analysts had forecast a loss of $0.57 per share on $547 million in revenue.

Teladoc forecast full-year sales growth between 25% to 30%, in-line with expectations.

The stock is the third largest holding in Cathie Wood's Ark Innovation ETF (ARKK), which is up 1.6% ahead of the open.

Mortgage Rates Tumble as Rates Rise

Mortgage application volume fell to the lowest level since December 2019 last week. 

The Mortgage Bankers Association reports total application volume tumbled 13.1%.

Refinance applications were down 15% weekly and 56% compared to a year ago.

New purchase applications fell 10% weekly and 6% annually.

It was the third straight week of purchase applications falling.

The average 30-year rate rose to 4.06% from 4.05%.

Covid Cases Plummet 90%

Data from Johns Hopkins University shows the U.S. is seeing an average of 84,000 new Covid cases per day.

That’s down 90% from the record high of 800,000 per day on January 15.

Hospitalizations are also down sharply. 

The latest seven-day average shows 66,000 patients hospitalized with Covid in the U.S., down from 159,000 on January 20.

Average daily deaths have fallen below 2,000 after peaking at 2,600 on February 1. 

With cases falling, many states are switching to an endemic posture on policy.

New York and California, two of the strictest states on Covid policy, both allowed their indoor mask mandates to expire.

The CDC is expected to update its mask guidance soon.

In Case You Missed It

  • U.S. consumer confidence slipped this month amid continued inflation pressures. The Conference Board's consumer confidence index fell to 110.5 from January's downwardly revised 111.1. Confidence in current economic conditions rose to 145.1 from 144.5, expectations index fell to 87.5 from 88.8.
  • Former President Trump’s new social media app Truth Social was #1 on the Apple (AAPL) app store Tuesday. Digital World Acquisition (DWAC) shares closed 10.2% higher. DWAC is the SPAC Trump Media & Technology Group is set to merge with to go public.


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