The market review for September, 8st

Equity futures are pointing solidly higher this morning, trading up 1% after the long weekend. This morning’s strength is a continuation of the bid seen on Friday, which followed mixed employment data, and comes on the heels of two days of gains in overseas markets. Asia and European markets traded up yesterday while U.S. markets were closed, and continued higher in today’s trading. In Europe, Cadbury rose 38% yesterday after rejecting Kraft Food’s $16.7 billion bid. Today, strength in commodities related stocks led gains, with gold rising to six month highs above the closely-watched $1000 mark and oil back near the $70 level ahead of tomorrow’s OPEC meeting, which is expected to leave oil supplies unchanged. While Europe posted more moderate gains today, Asia picked up further with China stocks rising ~2% after the official China Securities Journal reported that nine securities mutual funds, tracking China’s stock indices, are being launched in September, adding 50 bln yuan ($7.3 bln) into the market. While overall activity is expected to pick up now that the Labor Day break has passed, the economic and earnings calendars are very light this week.

Equity futures: S&P +1.14%, Nasdaq +1.05% -10-year Note: 3.442%
Dollar: 1.4476$/euro, 1.6560$/pound, 92.32yen/$
European Indices: FTSE +0.6%, DAX +0.5%, CAC +0.4%, MICEX +3.6%
Asian Indices: Nikkei +0.7%, Hang Seng +2.1%, Shanghai Composite +1.7%

Key earnings/guidance since Friday’s close:

Technical Perspective:
The strong recovery off last week’s lows has neutralized the potential weaker pattern that had been developing off of the Aug high. Price patterns are constructive for some follow through early this week with short term resistances at 1018 and 1021/1022 and a stronger ceiling near 1028. Given the extent of the bounce will be watching to see if some corrective trade takes hold after a test of the initial levels. Minor supports are at 1013 and 1011/1010.
Key economic data:
-July Consumer Credit at 15:00ET (consensus -$4.0 bln; prior -$10.3 bln)

Fed/Treasury calendar:

Bond auction results:
-$29 bln in 3-month Bills and $29 bln in 6-month Bills at 11:30ET
-$38 bln in 3-year Notes at 13:00ET

-AVAV, CASY, FLOW, FCEL, MIND, PBY and SB are confirmed to report today after the close

Key industry conferences:
-RBC Capital Transportation Conference — Companies presenting: CP, CSX, BNI, CNI, NSC

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