"It's a psychological issue as much as it is anything right now," Freeman said. "I think the markets understand that something more could happen there. Europe corrected more than our market…I still think you could see more correction there and uncertainty." But Freeman expects any impact to be short-lived and he expects U.S. stocks to end the year higher.
The recent washout in stocks sent the S&P 500 down more than 4 percent by Thursday from its July 24 intraday high, but Friday's rally leaves it 3 percent off the high. Bank of America Merrill Lynch analysts expect just a single digit pullback, in line with the types of sell offs the market has seen in the last three years.
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"Sentiment indicators suggest this is a 4-8 percent type of global equity correction rather than The Big One; we expect 1,862 on SPX to hold," they wrote in a note.
The S&P 500, finishing Friday up 22 points at 1,931, broke down below its 100-day moving average at 1,913 Thursday.
The German DAX in the past week entered correction territory, down more than 10 percent from its June 30 high, and France's CAC temporarily fell to a 10 percent loss on an intraday basis Friday.
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Portugal, Greece, Italy, and Spain are all down double digits. Traders have been watching the German market as a kind of warning sign for U.S. stocks, so the German ZEW, a reading of economic sentiment, will be of interest Tuesday.
The bond market will also be a source of interest in the week ahead, after yields moved to 13 month lows. Investors sought safety in the U.S. 10-year, which also tracked the German bund. The 10-year bund yield reached an all-time low of 1.01 percent. The U.S. 10-year was at 2.42 percent late Friday, well above the lows it reached early Friday.
In the coming week, there are also $67 billion in Treasury auctions of 3-year, 10-year and 30-year bonds, Tuesday through Thursday.
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David Ader, chief Treasury strategist at CRT Capital, said the bond market will focus on speeches from Fed Vice Chairman Stanley Fischer Monday and New York Fed President William Dudley to see if they advance the discussion on rate hikes or address the situation in Ukraine or elsewhere. Fischer speaks in Stockholm on recovering from the Great Recession. New York Fed President William Dudley speaks at a conference on wholesale funding in New York Wednesday, as does Boston Fed President Eric Rosengren.
Retail sales will also be important Wednesday. "I think that could prove a little bit underwhelming," he said. Based on recent credit data, the number may not disappoint. "The strength came from student loans and auto loans but not revolving credit, credit cards. I wonder if that doesn't translate to retail sales, that are muddling or even disappointing."