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Matthew Sauer, Esq.
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Matthew Sauer, Esq. serves as the President and Chief Investment Officer for the Fidelity Independent Adviser family of newsletters. The Fidelity Independent Adviser provides monthly guidance on Fidelity mutual funds and many other funds available on Fidelity’s No Transaction Fee network. The... More
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  • Investor Update For September 3, 2013 0 comments
    Sep 3, 2013 2:16 PM

    President Obama's decision to defer to Congress on a Syrian attack was positive for international markets on Monday. Asia and Europe saw gains almost across the board. With Congress still in recess though, it means a final decision on U.S. involvement is still more than a week away.

    The Fed's decision to taper or not to taper comes a week after that, followed by yet another budget battle in Washington. It will be an eventful month in terms of news headlines, but aside from the Federal Reserve's decision to taper, none of the other events are likely to have long-lasting effects on the stock market.

    Also boosting markets today was a strong PMI number from China, in at 51 for August and the highest number in well over a year. Australia also posted an increase in its August PMI, though it remains in contraction with a sub-50 print. Strength also came from the Indian rupee, which continues to rally from last week's low below 69 rupees to 1 dollar. The rupee still needs to gain this week though in order for this rally to grow some legs. Advances in the past couple of days are impressive, but the rupee is still down over the past week due to the rapid pace of losses.

    In technical terms, commodities were overbought and emerging market currencies oversold last week. Global stocks are generally in a downtrend, with emerging markets leading the way lower. In the U.S., the Nasdaq held its 50-day moving average last week, making it the strongest of the major indexes. This can continue for a day or two without affecting any of the near-term trends, however, by midweek we should get a sense of whether the August sell-offs are finished or whether a deeper correction is unfolding.

    Big Picture: Lots of economic data comes out this week, including the August PMI numbers for most nations. Tuesday, we'll get the July trade balance, the MBA Mortgage Index, auto and truck sales, and the Fed's Beige Book of economic data, which will be among the last pieces of data that can provide a clue to the taper. On Wednesday, private jobs numbers for August will be out, followed by July factory orders on Thursday. Finally, on Friday we'll get the unemployment rate for August. As far as data goes, this is a big week with the Fed meeting two weeks away, and there is little else coming between now and that meeting.

    Earnings: Smith & Wesson (SWHC) is among the firms reporting during this slow earnings week, along with Dollar General (DG) and H&R Block (HRB).

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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