Ready for more...

LOLz Now What?

Feeling OK, bulls? I ask that because it must have hurt to be run over by a Tesla (TSLA) semi truck going 150 mph on Tuesday. In a way it was good to see investors give a damn about looming risk factors such as the spike in bond yields, a new Federal Reserve chief and earnings reports from Action Alerts Plus holding Apple (AAPL) and Amazon (AMZN) that may rattle Wall Street. And then there is the jobs report on Friday, which could spur speculation of hawkish new language at the March meeting of the Fed. As noted Fed watcher/researcher Danielle DiMartino Booth told me at our HQ on Tuesday, incoming Fed chief Jerome Powell is no Janet Yellen clone. The market could be surprised by his resolve to stomp out any signs of inflation (and in turn, stomp the face of the bulls). So the big question is now what after witnessing such a bloodbath in the markets (down 411 points on the Dow at one point IS a bloodbath)? Who knows? But the sense of shock could be felt in my email inbox -- not many sell-side notes on the market have hit over the last 24 hours. But I will leave you with a clue on what I think may happen to markets next. People that hawk investment newsletters are the most bullish since April 1986, according to Investors Intelligence. Oh, those newsletter writers ...

Let's Buy Some Stocks, Baby

Although one should be cautious on the market after a rout like Tuesday's, the reality is that many will view it as a buying opportunity. That case may be emboldened by a bullish State of the Union Address from President Trump. The Prez didn't go off the rails, made a few digs (see NFL) and came away as someone who is focused on pushing through a $1.5 trillion infrastructure package. If one is inclined to wade in these waters, it's best to stay with the infrastructure theme. TheStreet's Anders Keitz and Tom Terrarosa highlighted seven names worth exploring. Jefferies published a list of must watch stocks on Tuesday night, infrastructure plays such as Martin Marietta (MLM) (could ship more aggregates under infrastructure plan), Steel Dynamics (STLD) and Praxair (PX) (capex play) stood out to me.

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And the Laughs Continue

Did an informal poll of our newsroom at the height of the market pullback Tuesday. I asked a few millennials when they last saw a 400-point drop in the Dow. The honest answer was never. That reminded me of what CME Group's (CME) top CEO Terry Duffy said in a recent interview: "I think that the younger generation has only seen a few things. They saw some bad behavior in the 1990s. They saw the Sarbanes Oxley legislation and the financial crash of 2008. And they saw Dodd Frank created. So they have seen some bad things, but mostly they have seen stocks never really sell off to an extent. Even the 2008 crisis, which happened so quickly, it wasn't like it was a two-year bear market. It was a huge flushing sound and then the market started to trend higher by March 2009. So, a lot of people haven't seen traditional bear markets like I have. I think people will eventually have to try to understand both sides of this market because we all know that nothing goes up forever." I wonder whether 28-year-olds sitting at their trading desks will panic this week and start selling.

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Chart of the Day

Profit margins are near a top. Take that, bulls.

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