Need To Know: The Correction Has Likely Run Its Course, Says Wall Street Veteran

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 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 GOOG, -0.05% GOOGL, -0.17% , 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 YMM8, +0.35%  , S&P 500 ESM8, +0.39% and Nasdaq-100 NQM8, +0.71% are rising, after the Dow DJIA, -0.04%  , S&P SPX, -0.29% and Nasdaq Composite COMP, -0.85% lost ground yesterday.

Europe SXXP, +0.40% is advancing, after Asia closed mixed. Oil  CLK8, -0.08% and the dollar index DXY, -0.08% are dipping, while gold GCJ8, -0.03% is little changed. Bitcoin BTCUSD, -4.66% 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.

The quote

“We think the White House has a tall order ahead of it in showing that this doctor is qualified to lead a $200 billion agency.” — Joseph Chenelly from AmVets, the fourth-largest veterans service organization, is among those questioning the president’s pick for Veterans Affairs secretary.

Trump just tapped White House physician Ronny Jackson for the VA job after firing David Shulkin. Jackson impressed Trump in January when he extolled the president’s “incredible genes.”

The buzz

While Tesla shares TSLA, -7.67% are down about 15% this week, shareholders at least have scored a victory in a legal battle over the company’s SolarCity acquisition.

In other tech news, scandal-rocked Facebook FB, +0.53% plans to limit the information it shares with data brokers, and a Trump tweet today appears to be adding to bets that he may go after Amazon AMZN, -4.38%  .

Geopolitics news: North Korean leader Kim Jong Un has agreed to meet his South Korean counterpart on April 27, as Japan tries to get in on the Pyongyang action. Plus, Terry Branstad, the U.S. ambassador to China, tells CNBC that Beijing has not treated American companies fairly.

Boeing BA, -0.34% has been fighting an attack from the WannaCry virus.

M&A headlines: CME Group CME, -0.10% has offered to buy U.K. fintech company NEX NXG, +0.10% in a $5.4 billion deal, and auto-making allies Nissan NSANY, -1.70% and Renault RNLSY, +0.61% might merge.

Earnings movers: Software companies Verint VRNT, -0.66% and Progress PRGS, -0.29% look on track for gains after their results late yesterday, and Corona parent Constellation Brands STZ, +0.92% posted a profit beat before the open.

IPO developments: Electric-signatures expert DocuSign plans an IPO, as Chinese app maker Bilibili BILI, -2.26% readies for its second day of Nasdaq trading.

Venezuela’s chief prosecutor says 68 people are dead after a riot and fire at a police station.

The economy

Readings on weekly jobless claims, consumer spending, personal income and the Fed’s preferred inflation gauge are due before the open.

Once trading is underway, watch for reports on consumer sentiment and conditions in the Chicago area.

Check out: MarketWatch’s Economic Calendar

Philly Fed boss Patrick Harker expects Fed officials will hike interest rates three times this year, compared with his earlier projection for two rises, according to a Wall Street Journal report. Harker’s also due to speak today at a lunch event in New York.

The stat

Remember Brexit? There is now exactly one year to go before the U.K. actually leaves the European Union. Figures hit today that confirmed the country is showing the weakest expansion among G7 economies.

Don’t miss: BlackRock warns of more ‘poor’ action for U.K. stocks

A U.K. news channel has asked voters how Brexit is going:

Random reads

Nobel winner Malala is visiting Pakistan for the first time since she was shot.

Ecuador punishes WikiLeaks founder Julian Assange by turning off his internet.

It’s opening day for baseball — here’s a primer for this MLB season.

Underhanded Down Under: Aussie cricket has a deflategate-like moment.

Apologies to Moses and Netanyahu:

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