In overnight trading, markets were down across Asia as a result
of investor concerns over the crisis in Syria, as military action
has become increasingly more likely.
As summer draws to a close, traders are also taking a step back
given the uncertainty in September (debt ceiling debate, Fed
tapering, Bernanke succession, Italy's Berlusconi, German
elections, etc). Note that this isn't "new news" per se, as
evidenced by the US markets, which are down modestly in the
Regarding Syria, it is likely that Washington will launch a
limited and brief cruise missile strike against the country within
days (with some reports citing this to occur as early as Thursday
and a time frame within 24 hours).
Action is likely to be limited to deter Syria and aimed at its
weapons base (versus a long and drawn out military strike). As
such, the market impact over the long term should be muted although
the psychological risk-off effects are already occurring.
Separately, the Syrian Electronic Army is taking credit for
hacking into the New York Times (
) and Twitter.
The exception is in China as the country continues to stabilize,
down by a modest 0.11% on continued expectations for GDP growth of
7.5%. Recall that Barclays, Deutsche Bank, and Credit Suisse have
each increased their GDP forecasts in the region.
Again, nothing "new" was reported in China, but there appears to
be technical support from the higher industrial profits posted for
July with a more sanguine outlook for August PMI (hits the tape on
Japan's Nikkei declined by ~1.5% owing to broad selling
pressure. Similar to the rest of Asia, incremental headlines were
light in the last 12 hours, but investors are stocking up on
safe-haven assets ahead of a potential geopolitical crisis.
India remains ground zero as money continues to flow out of the
Emerging Markets (EM) region with the rupee falling another 2% vs.
the USD. There is speculation of the government setting up a
currency swap agreements in order to stem further depreciation.
SSEC 2101.30 -2.27 -0.11
N225 13338.46 -203.91 -1.51
SPX 1627.25 -1.0 -0.06
DJIA 14753.0 -5.0 -0.03
IXIC 2059.0 -0.5 -0.02
NYT 11.59 0.00 0.00
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