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4 reasons >60% probability equity markets will bottom this week even as COVID-19 remains scary. 15 stocks

The concerns about the economic ripples of Corona virus (COVID-19) are spreading and the path of spread is still unknown.  And because there are multiple outcomes, it is logical for markets to take a step back -- hence, stocks have fallen off a cliff. What may surprise investors is that the 3% sell-off we saw yesterday is probably a buyable moment.  We think there is a 60%-70% probability that stocks will bottom this week, even as COVID-19 concerns linger for potentially months.  4 reasons:- 3% sell-off + PMI>50 + non-recession = 94% chance stocks higher 6M later with 10% median gain (87%/89% 3M/12M).- trifecta bottom set up this week --> RSI <33, AAII going to tank -20, VIX>26.  this has signaled bottom of last 7 5%-plus declines.- US stocks remain global safety trade and with $300T of global HH wealth and only $25T US stocks, there is not enough SPX to go around.- best biz cycle barometer, US long-term YC spread (30Y-10Y) is steepening, not flattening so it is arguing that pandemic not the trajectory.BOTTOM LINE: CORRECTION NOT TOPWe still believe the base case and correct playbook is to treat this sell-off as a correction in a bull market.  If biz cycle was turning, the YC at the long-end should be inverting, not steepening.  So we are buying this pullback...

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