Stifel with some solid research:
Seventeen non-recession S&P 500 corrections >10% since 1962 fell an average 16.95% and 4,050 (our new view, 4,200 prior) forthe S&P 500 would be -15.6%. Equities remain hostage to Russia-Ukraine, but there are other post-pandemic risks. After the S&P500 low (4,114 Feb-24) below our prior 1Q22 target price of 4,200, stocks bounced Feb-24/25 (S&P 500 +6%) on limited sanctions and a potentially slower Fed cycle. But sanctions have expanded, the West has escalated with military shipments, and Ukraine has mounted a resistance, so risk has again increased. Russia is not without counter-sanctions. Official reserves of Russia of over $600B would cover two years of Russian imports, and we doubt the West (which struggled with a virus) could withstand two years of deprivation associated with Russia’s position as a major commodity supplier. That said, reports on Feb-27 of a possible Russia/Ukraine presidential meeting are positive, so investors remain captive to news flow. Over the coming month(s) we see world PMI Manufacturing indices falling, the Broad dollar rising and financial conditions tightening. This report describes our preference for largely Defensive groups (primarily Healthcare, Consumer Staples, Utilities and Telecommunications) over Cyclicals (primarily Financials, Energy, Industrials, Basic Materials, Technology and Consumer Discretionary).
Killer chart this one: