While it has been a quiet session so far, today’s events have the potential to substantially boost market volatility. Here, courtesy of JPM’s Adam Crisafulli, is the “bottom line for domestic equities” and what to watch for among today’s information barrage.

Market update – it was another relatively quiet night of news. US futures and Eurozone stocks have a small bid ahead of a busy morning of domestic eco data and the FOMC decision. Oil prices are rebounding thanks to supportive API data and pos. comments from Saudi Arabia and Goldman. Opposition to Ryan’s HC bill remains intense w/conservatives in the House still not thrilled (despite the pos. CBO fiscal score) while Senate moderates (as many as 12) are demanding substantive changes (any changes will further undermine House support) and the grassroots Republican press is urging Trump to abandon the legislation.

The healthcare obstacles are ostensibly negative for tax reform although there is more talk about Republicans pivoting away from repeal/replace and focusing their energies on taxes and economic growth (before that time comes though Ryan will still try to drag his bill through the House).

The bottom line for domestic equities remains the same: the SPX is only back to where it stood before Trump spoke in front of Congress on 2/28 (the index is down just ~1.5% from the 3/1 2400 high) and the larger risk remains whether the index retraces the whole “phenomenal” rally (which would move it back to 2300 or lower). Whether that happens will likely come down to Washington – investors still seem willing to give Trump/Ryan/McConnell the benefit of the doubt on HC until at least the end of Mar but tax doubts are rising.

Calendar for Wed 3/15 – the focus will be on the US Mar Empire Manufacturing (8:30amET), the US CPI and retail sales numbers for Feb (8:30amET), the NAHB housing index for Mar (10amET), the FOMC decision (2pmET statement/dots and 2:30pmET press conf.), Trump’s visit to Michigan (where he will hold an event w/auto CEOs), and earnings (including JBL, ORCL, and WSM after the close).

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