Equity markets pulled back on Monday as geopolitical unrest in China compounded tepid holiday retail spending. The news from China is that protesters are unhappy with COVID-19 lockdowns and the unrest is spreading. The news will be felt hardest by those whose business is dependent on China such as the tech industry and manufacturing and may cause another supply chain disruption. The takeaway for investors today is that another reason to expect weak earnings in Q4 and the 1st half of 2023 has emerged and it will weigh on the index moving forward.

Traders are also bracing for another round of key economic data. This week's calendar will bring the monthly NFP and other labor news along with key reads on manufacturing, the housing market, and inflation. The PCE price index will be the big report of the week and may show a downtick in inflation to match the CPI. Even so, investors should expect another 125 to 150 basis points of interest rate hikes by late winter 2023.