Monday September 2nd Markets closed for Labor Day. That didn’t stop the futures from closing Monday morning up 16.25 S&P points, 112 Dow points. Chinese PMI numbers but mostly Syrian attack delay all contributed to the rally. The week’s news headlines are likely to be consumed with the Congressional debate on whether the U.S should embark on some military action against the Syrian regime as punishment for their use of chemical weapons. Since nothing will apparently be decided until the following week as Harry Reed said he would put up to vote the week of September 9th.
The markets will be on edge all week. We are planning on fading any rally that follows through on Tuesday and Wednesday if it lasts that long. By Thursday and Rosh Hashanah markets will sell off as tradition dictates. Sell Rosh Hashanah buy Yom Kippur is the most reliable of unreliable prognostications. The grand finale is Friday. US employment numbers will be out. There probably hasn’t been an unemployment number in my lifetime as important as this Friday’s number. It may put the nail on the 20-year bull market in bonds.
Incredibly enough an outfit known as the Free Syrian Army hacked the U.S. Marines web site this weekend by redirecting traffic for a while to a web site with pictures of Marines holding up signs declaring that their Syrian brothers in arms were joined in the fight against Al Qaeda. They called Obama a traitor and asked the Marine Corp to refuse to join the fight. That’s after an incredible week when these guys hacked both the NY Times and Washington Post. Whatever you want to say about the crisis in Syria you have to admire in a perverse way the tenacity and technical competence of this rogue outfit. Have they thought about offering their services to the NSA? They could probably use them. Who knows they may have accidentally hired them already.
Tuesday September 3rd Historically the end of Labor Day marks the time when the real players come back to town. The Hamptons shuts down. U.S construction spending is out on Tuesday and analysts expect the headline to increase 0.4% following a decline of 0.6% in June. ISM numbers are out as well and analysts expect the headline to decrease to 52.0 from 55.4 in July. The end of tapering is really the only thing that matters right now in the macro scheme of things.
Wednesday September 4th Rosh Hashanah begins. The Federal Reserve Beige book will be closely watched for signs of a faltering economy.
Thursday September 5th Earnings season has pretty much ended but a few companies always report on something other than the calendar year. The most notable one we are watching is beaten up downcast VeriFone. It reports after the close on Thursday. We’ve made good money on PAY this year and still hold a meaningful position. We wrote on the Sax Angle on July 28th at saxangle.com/verifone/ that Verifone is on the hunt for a new CEO. Expect to hear some anxious questions on that front or even some answers. The search has been going on for quite a while now.
Thursday has a slew of economic data that will be closely scrutinized. Big news out of Europe with Great Britain and European Central Bank rate decisions. I don’t’ see how this will impact our markets though as all eyes are really on the Fed and the U.S Congress.
U.S jobless claims and continuing claims are probably the most important economic numbers, as everything seems to hinge on employment numbers. At least that’s the old Fed. It’s anybody’s guess what the new Fed is going to look at and the market will not need much reminding of that.
Friday September 6th 2013 US employment numbers will be out. There probably hasn’t been an unemployment number in my lifetime as important as this Friday’s number. The unemployment rate is expected to decline to 7.2% and non-farm payrolls to rise to 180k. Bonds could have the mother of all rallies if this number is bad coupled with weekend Syria nervousness.