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Futures are about flat ahead of this morning's Non-farm Payrolls report.
Europe's little-changed and Asia was mostly higher overnight.
The action yesterday (and today, we suspect) was in U.S. Treasury yields, where the 10-year pushed all the way to 3% in overnight trade, the first time at that level since July 2011. It's since pulled back to 2.97% as traders await the 8:30 AM print.
BAML's Sell Side Indicator - meant as a contrarian read as it tracks the average weighting strategists are recommending for stocks - rose to 52.9 in August. While on the rise (it's a 16-month high), the weighting is still on the low side and thus seen as bullish for stocks going forward.
As comparison, the read at the March 2009 bottom was slightly above the level seen last month. In late 2007, it rose to nearly 67%. The indicator printed an all-time low of 43.9% in July 2012 with the DJIA (DIA) around 13K and the S&P 500 (SPY) near 1,300.
The long-term average stock weighting is in the 60-65% range.
Plugging the data into her models, BAML's equity and quant strategist Savita Subramanian sees a 17% return for the S&P 500 over the next 12 months. Her current year-end target is 1,750 (vs. today's 1,640).
The 10-year Treasury yield shoots up to 2.88% following the fast ISM print which will do little to slow momentum towards the QE taper. Expectations had been for a slowdown to 53.8, but instead the index sped up a hair to 55.7 - it's highest read of the year.
Leading the way were New Orders, which jumped 4.9 points to 63.2. Prices gained 5 points to 54.0. Supplier Deliveries edged higher to 52.3. Backlogs gained 1.5 points to 46.5. Production fell 2.6 points to 62.4. Full report here.
S&P 500 (SPY) futures +1%, with the Nasdaq 100 (QQQ) +1.2% and the Dow (DIA) +0.8% after the President leaves a decision on Syrian military intervention up to a Congress skeptical of any such action. The President again reminded any strike - should it take place - would be limited in nature.
Europe is ahead by nearly 2% as it also gets encouragement from the continent-wide PMI rising to more than a 2-year high.
Nothing comes for free though, and the rebound in equities has 10-year Treasury futures lower by 0.4%. A move like that in futures is equivalent to about a 5 basis point increase in the yield, which would put the 10-year at 2.84% were it trading this morning.
President Obama will seek Congressional approval for a strike on Syria.
Obama says he has "decided the United States should take military action against Syrian targets."
By leaving the decision to a Congressional vote, the President has effectively ensured any military action will be delayed until at least September 9, when Congress comes back into session.
For investors, this provides at least a bit of clarity in terms of timing and also another week to sort things out before any potential strikes actually begin.
On the other hand, the decision is now pushed that much closer towards other key events for the market, such as the FOMC meeting on September 17 and 18. Additionally, the President's move sets up a potentially fractious situation in the event Congress votes "no."
S&P 500 (SPY), Nasdaq 100 (QQQ), and Dow (DIA) futures are little-changed ahead of a slow news day and with Q2 earnings reports about finished.
Asia was mostly higher led by Shanghai's 1.9% gain, and Europe's moderately lower. Italy, however, slips 2.4% as Berlusconi's party threatens to topple the government should the Senate vote to expel the former PM.
Treasury prices are flat, the 10-year yielding 2.81%.