One thing's for sure: I find it hard to believe that the overnight weakness is due to a drop in euro zone prices. The yen is stronger, and the Turkish lira is down again as investors flock to safe haven U.S. debt.
We continue to grapple with emerging market fallout, due to lower liquidity stemming from the Federal Reserve's tapering policy. These conditions cannot be solved by some magic bullet.
1) Earnings are mixed: we had good from telecom equipment manufacturer JDS Uniphase and ; yet Wal-Mart cut its fourth quarter guidance, Amazon weighed in with higher costs, and credit card giant MasterCard missed on line. The latter is putting more pressure on market.
2) In other news, the big mall is not dead yet. Simon Property Group kicks off key earnings reports for real estate investment trusts (REITs). There has been lots of nail-biting in REIT land amid concerns about slowing sales and the competition from online vendors.
SPG reported Funds From Operations (FFO, the main metric used by REITs) of $2.47, above expectations of a gain of $2.43. Revenues were slightly above expectations. Look at these metrics:
a) Occupancy: Up. 96.1 percent, vs. 95.3 percent a year ago.
b) Average rent per square foot: $42.34, up 4 percent. You read that right: rents are increasing.
c) Guidance: above consensus with $9.50-$9.60, versus consensus of $9.47.
d) Dividend: was raised more than 8 percent to $1.25; they now have a dividend yield near 3.4 percent.
SPG, of course, is among the highest quality mall operators, so it's difficult to extrapolate to the rest of the REIT universe. Owners of lower-quality strip malls, for example, are certainly under pressure, and Sears and JCPenney will remain issues.
However, the bigger malls are not standing still: they are moving toward all-inclusive entertainment experiences—mini-theme parks, in essence. Sales are significantly above those during the recession. Mall owners have kept costs down. There are no new malls being built, so space is limited.
Sure, online sales are increasing, but look how mall owners are reacting, with a three-pronged omni-channel strategy: a) full price locations, b) discounted stores in outlets, and c) online sales. Also, many malls now allow you to order online and pickup at the mall.
Bottom line: large, well-managed malls are not yet an endangered species.
3) Today is Ben Bernanke's last day. This puts Janet Yellen into the eye of the storm.
—By CNBC's Bob Pisani