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Stocks Slide as Manchin Snubs Biden's BBB

EQUITIES
  • Equity futures trades poorly ahead of the Monday open, with the e-mini S&P dropping over 50 points and continental European markets suffering losses of a similar magnitude. Europe's energy and healthcare names are leading the decline - but losses are broad-based with sentiment taking a hit. The risk-off theme follows Senator Manchin nixing Biden's Build Back Better plans over the weekend, withdrawing support and effectively tanking the proposals.
  • The withdrawal of support for the package has prompted a number of sell-side institutions to cut their growth expectations for 2022, hurting the equity outlook into year-end.
  • The sell-off late last week and today signals potential for a deeper pullback in the e-mini S&P. Note that futures are back below the 50-day EMA, at 4590.64. This is an important technical development as it strengthens a bearish threat and exposes key support at 4485.75, Dec 3 low. A break would reinforce a bearish threat.

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