The overnight news flow was dominated by positive economic data
out of China. China's August trade balance showed larger growth in
exports than expected and a decline in import volume. China's trade
surplus expanded to $28.52 billion from $17.82 billion. Export
growth saw the biggest jump in aluminum and steel products. China's
consumer price index fell to an annual rate of 2.6% from 2.7% in
the month prior. Japan's final estimate of 2Q GDP expanded to an
annual rate of 3.8% from the first estimate of 2.6%. The
(INDEXNIKKEI:NI225) was up 2.48%.
US equities started off the day positively and continued higher
with no apparent catalyst. The
(INDEXSP:.INX) broke out of a short-term uptrend channel, continued
into horizontal resistance at 1670, and closed above its 50 day
moving average. News reports surfaced around the middle of the day
that Russia was offering a deal where Syria would forfeit and
destroy its chemical weapons in exchange for no military strikes on
the country. US government officials were skeptical over the
validity of the Russian statement on Syria.
Material and emerging market shares led the day's trading.
Materials were no doubt buoyed by the continued strength in the
Chinese trade data. The July consumer credit report showed a
seasonally adjusted gain of $10.43 billion in the month, down from
a $11.92 billion rate in the month prior. Gains were seen in auto
and student loans.
Two M&A deals went through today. Ares Management and the
Canada Pension Plan Investment Board acquired high end retailer
Neiman Marcus for $6 billion. Additionally, Molex was purchased by
Koch Industries for $38.50 per share in cash.
Tomorrow's Financial Outlook
The August NFIB small business optimism outlook index will be
released tomorrow morning. Analysts estimate that the index will
rise to 95.0 from 94.1 in the prior month. The other economic data
point is the government's July JOLTS job openings, a stale
employment data point given Friday's August payrolls report. The
Treasury will auction off $31 billion in 3-year notes at 1 p.m. ET.
Lastly, in the evening, President Obama is scheduled to give his
report on the US's evidence of Syrian chemical weapons use.
Important economic data is due out overnight from China. The
country will release its August industrial production, retail
sales, and fixed asset investment data. The last data point is most
important due to its heavier weighting in China's GDP. Other
economic data due out is Italy's GDP and Canada's August housing
The sole earnings report scheduled is from
Restoration Hardware Holdings