Morgan Stanley said of today’s slaughter that the market “focused on the potential for policy disappointment ahead of Thursday’s House of Representatives vote to repeal and replace the Affordable Care Act. It is debatable whether or not Republicans have enough votes to pass the bill as it is written today. Should the bill fail to pass, the timing and scope of President Trump’s tax reform plan would be questioned as well.” Financials led losses, dropping 2.87%, while small caps underperformed large caps. This was the first time the S&P dropped more than 1% since October 11, but Morgan Stanley continues to be encouraged by earnings revisions, which are supportive of higher equity prices, with consensus expectations for first quarter S&P 500 earnings to be up 10%. Outside of the US, “valuations remain compelling with forward earnings and forward earnings revisions inflecting higher.”