By Carlos Guillen
After three days of making encouraging moves to the upside, stocks are making a slight reversal as reflected by the Dow Jones Industrial Average, which is down about 20 points. While tensions over Syria have simmered down, comments from Russian President Putin on the New York Times are not helping the matter. And Initial Claims data posted earlier had a sweet and sour taste for many investors. However, given that Septembers are notorious for being the worst month of the year, things could be worse.
A day after President Barrack Obama's speech to the nation, bringing a sigh of relief as a military intervention in Syria was averted, Russian President Putin has stirred the pot by making comments on a New York Time article that in essences reprimanded the U.S. for not having the story correct about who in fact used the chemical weapons; however, more outrageous was that he implied that bad things could happen if the U.S. acts unilaterally and attacks Syria. So while we enjoyed a full day of relief, fears of military action are ramping up again as this may mean that Russia and Syria may not live up to the promises they made just two days ago.
On the economic data front, we got a quick high followed by a quick downer this morning as the number of people filing for unemployment benefits ticked much lower, but it appears that it is not real. According to the Department of Labor, initial claims during the week ended September 7 totaled 292,000, decreasing from the 323,000 revised figure reported for the prior week and landing way below the Street's estimate of 327,000. The result is on its eighth week of remaining below the 350,000 level that economists say is consistent with moderate labor market growth of about 150,000 net new jobs a month. It was also the lowest since April 2006. However, a subsequent headline said the drop was the result of "faulty reporting by states" as two states were updating their computer systems. Additionally, it was for Labor Day week which makes it a little dubious to begin with.
Another bit of economic data was that import prices were unchanged in August, while economists had expected a gain of 0.5 percent. The flat reading on import prices suggests inflation remains under control, and this may give the Fed more encouragement to continue with it easing trajectory. The Fed will meet on Tuesday and Wednesday of next week to discuss the state of the U.S. economy and the fate of the central bank's $85-billion-a-month asset purchasing program.
Assad Plays Hardball
By David Urani
As we all know, President Obama is keen on attacking Syria after their chemical weapons usage. As we also know, another foreign conflict is quite unpopular with US citizens and likewise so far it's been looking pretty unpopular in Congress with respect to that pending vote on whether to intervene. Well, guess who else knows about that unpopularity; Assad.
It almost looks like The Syrian leader is calling Obama on a bluff as all of a sudden those discussions about Syria turning over its chemical weapons in exchange for no airstrikes by the US are turning a little sour. The market turned south today, accordingly.
Assad seems to think he has leverage now because he put out some new demands today. The big one may be his call for Israel, like Syria, to also destroy its WMD's. He also calls for the US to stop aiding terrorists (whoever those terrorists may be). He also calls for the US to stop its "policy of threats." Finally, he also suggests the Syrian rebels may launch chemical weapons against Israel as a provocation (similar to Putin's suggestion that the Syrian rebels could have been the ones deploying the chemical weapons to draw the West's attention).
This is quite an ambitious demand, and in a way almost looks based in some kind of fantasy world where the US aids terrorists. Not the kind of thing the President would be likely to accept.