ISM Report: Nailing The Recession Coffin Shut?

Bears are arguing that the ISM Services report--well below expectations--is the final nail in the recession coffin. We now have several very weak data points in the last week: ISM Services, nonfarm payrolls, and new home sales. Only durable good ordersrecently have been above expectations.

Others say it doesn't matter if we're in a recession or not; what matters is the economy is slowing down and how the market reacts. Rate cut odds now 100 percent for another cut from the fed in March.

Time for the retest: will we hold the lows is the big question on the Street right now. The January low on the S&P 500 was about 1,275; at 1,354, we are still a ways from that.

The biggest wildcards right now are the continuing credit risk and the poor visibility

Meantime this will be a big week for earnings and international news--Cisco reports tomorrow, and is at a 52-week low right now, the ECB will be commenting this week, the G7 meets over the weekend, and remember China is closed for New Year until February 13th.

Stocks are weak across the board, but the most notable weakness is in financials and materials, as well as energy.

Homebuilders, however, are mostly up.

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