Weak pre-market retail numbers set the stage for yesterday's selloff, which snapped a two-day rally. The S&P 500 opened fractionally lower at its intraday high and traded modestly lower until the release of Philly Fed President Plosser's mid-day speech, in which he states that "the time may come sooner than many expect when interest rates may have to rise if we are to avoid falling behind the curve." The index promptly sold off to its -0.90% intraday low. A more dovish speech by New York Fed President Dudley helped to trim the loss for the day to -0.65%.
The impact of weak retail data was clearly documented in the -2.47% plunge in the S&P Retail Sector ETF (NYSE:XRT). That ETF is now down 7.12% year-to-date.
Meanwhile, the yield on the 10-year note closed at 2.52%, down 2 bps from yesterday's close and 2 bps above the 2014 low.
Here is a snapshot of the week so far.
Here is a daily chart of the index. Today's low bounced off the 50-day price moving-average on below average volume.
Here is a monthly chart on which I've highlighted the four index declines beginning with the Financial Crisis trough.
A Perspective on Drawdowns
The chart below uses the percent-off-high strategy for illustrating the drawdowns greater than 5% since the trough in 2009. It's been a while since we've seen anything even vaguely reminiscent of a correction.
