Floor Talk - Just an ugly start to the month of September, which has compounded an ugly trading week that is just two days old.
The significant reaction to the weaker than expected manufacturing PMI readings around the globe, China and the US included, underscored a recognition that last week's major rebound was shallow in its conviction.
This roller-coaster action within a new, lower trading range (roughly 1870-2000) is likely something market participants will have to get used to.
Even with today's losses, the S&P 500 isn't cheap on a valuation basis.
It is trading at roughly 16x forward twelve month earnings, which is in-line with its 15-year historical average, according to data from S&P Capital IQ.
In other words, it still has a full valuation in an environment that is riddled with angst about slowing economic growth, falling earnings estimates, and rising interest rates.
The kicker today is that the broad-based, and material, losses came after a spate of data that presumably lessened the chances of the Federal Reserve raising the fed funds rate later this month.
The market of course still has its eye on Friday's employment report, and the average hourly earnings number in particular, yet the concern about a policy mistake being made has clearly gone up as stock prices have continued to come down.
With that in mind, the market could have an even bigger mess on its hands if economic data continues to lean to the softer side of things and the data-dependent Federal Reserve still talks its way into rationalizing a rate hike in September.
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