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Risk of Syria Attack Abates, Lifting Global Equities Higher


Today's financial recap and tomorrow's financial outlook.

Better economic data out of China boosted Asian and domestic markets to continued new highs. The Indian SENSEX (INDEXBOM:SENSEX) has now gained 9.67% on a local currency basis in the last 4 days. Chinese industrial production accelerated to a 10.4% annual rate and retail sales to a 13.4% rate. The respective estimates were for 9.9% and 10.3%. This follows up on positive Chinese trade data from the weekend and stronger growth in manufacturing indices last week.

On the geopolitical front, this morning Russia announced that Syria would give up control of its chemical weapons and disclose their location to UN investigators. France, the UK, and the US announced that they were developing a range of responses to this offer, but preferred a diplomatic solution. The aforementioned countries were scheduled to meet for a session of the UN's security council today, but the meeting was called off due to differences between France and Russia.

Geopolitical safety investments gold and crude struggled today. Crude oil fell 1.5% today after reaching an intraday low of -2.33%. Gold was also down 1.5%. As such, energy sector stocks struggled today, the only S&P sector in negative territory. The S&P 500 (INDEXSP:.INX) opened the morning strongly in positive territory and continued that strength throughout the day. Equity breadth weakened throughout the day after starting off strong. Regardless, the broader indices closed near their intraday highs.

Apple (NASDAQ:AAPL) announced the launch of two new iPhone models, the 5C and 5S. The 5C would be the de facto replacement for the current 5 model, coming in five different colors with additional battery life and a higher resolution camera. The 5S will come with a greatly enhanced video camera and up to 10 hours of LTE browsing capability. It will also come with fingerprint technology and scratch-resistant buttons.

Tomorrow's Financial Outlook

Overnight, President Obama will give a speech on the chemical weapons found in Syria and what the US intends to do about it. Given our recent experiences, this should lead to volatility in tomorrow's markets. July wholesale inventories will be released, which will contribute to 3Q GDP figures. Economists are expecting a 0.3% gain from the prior month after falling 0.2% in June. The Treasury will reopen $21 billion in 10-year notes in the afternoon.

Global economic data is due out from Germany and the UK tomorrow before the US market open. The UK will release employment and jobless claims data from July and August. August jobless claims are estimated to fall 21K. July's 3-month unemployment rate is estimated to remain unchanged at 7.8%. Germany's final estimate of August's consumer price index is forecast to remain unchanged from last week's preliminary estimate of 1.5%

The sole earnings report on the calendar tomorrow comes from Vera Bradley (NASDAQ:VRA).

Twitter: @Minyanville

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No positions in stocks mentioned.

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