TradeTheNews.com US Market Update

Dow -41 S&P -6.4 NASDAQ -5

***Economic Data***

– (BR) Brazil Aug FGV Inflation IGP-M M/M: 0.4% v 0.4%; Y/Y: 8.0% v 8.0%e
– (US) ICSC/GS weekly chain store sales w/e Aug 27th: +0.1% w/w; +3.0% y/y – (CL) Chile July Industrial Production Y/Y: 0.7% v 3.5%e; Industrial Sales Y/Y: % v 3.8%e
– (CL) Chile July Total Copper Production: 373.5K v 426.5K Tons prior
– (CL) Chile July Retail Sales Y/Y: 9.6% v 9.5%e
– (SA) South Africa July Budget Balance (ZAR): -44.1B v -25.3Be
– (CA) Canada Q2 Current Account (BOP): -$15.3B v -$13.7Be
– (CA) Canada July Industrial Product Price M/M: -0.3% v -0.3%e; Raw Materials Price Index M/M: -1.2% v -0.1%e
– (US) Redbook Retail Sales w/e Aug 27th: +4.0% y/y; Aug MTD: +0.1% v July
– (US) Jun S&P/CaseShiller 20 City M/M: -0.06% v 0.0%e; Y/Y: -4.52% v -4.60%e; HPI: 141.30v 139.75 prior
– (US) Q2 S&P/CaseShiller House price Index Y/Y: -5.88% v -8.30%e; HPI: 130.12 v 125.55 prior
– (US) Aug Consumer Confidence: 44.5 v 52.0e

– The terrible August consumer confidence reading is weighing on global markets. The index dropped from 59.5 in July to 44.5 in August, its lowest level since April of 2009. The confidence data arrives on the heels of comments out of Fed voting member Evans, who staked out the dovish FOMC position in a pre-market interview. Evans said he was “somewhat nervous” about the US economic recovery given recent weakness and said he was in favor of more aggressive policy actions by the Fed. Spot gold surged in the aftermath of the comments, topping $1,830, up $40 from its Asian open aided by decent demand from macro funds. The S&P/CaseShiller home price data is not helping: the June data shows that US single-family home prices fell on both a m/m and y/y basis, offering yet another sign that the economic recovery will not be able to count on any help from a moribund housing sector. US Treasury markets are bid up depressing the 10-year yield back below 2.2%.

– In equity news, Barnes & Noble narrow its quarterly loss compared to last quarter, although the bookseller’s financial condition remains precarious. Comps in the quarter were negative, although the firm trumpeted its success in growing Nook e-reader revenue. Discount chain Dollar General beat expectations and hiked its revenue guidance for the full year. Footwear chain DSW topped both profit and revenue targets and tweaked its full-year outlook higher. Executives from Russian oil gian Rosneft and Exxon met with Russian PM Putin to hash out details of a massive deal that would see Exxon being granted rights to drill in the Russian arctic and the Black Sea in exchange for Rosneft access to the US Gulf of Mexico. The deal could be worth as much as $300B in all.

– The greenback came off its best levels following dovish comments from Evans. EUR/USD regained some composure and moved back above the 1.44 handle. The pair did receive a supportive hand from the ECB, which was spotted again in the secondary market buying peripheral debt, especially Italian bonds. Looking ahead, dealers are setting their sights on various scheduled government meetings, including a Swiss conference on Wednesday and the Spanish parliamentary vote on Friday regarding a law that would limit public deficits. The US employment data to be released over the next three session will also be key, culminating in the Friday’s non-farm payrolls data.

***Looking Ahead***

– 11:30 (US) Treasury to sell 4-Week Bills
– 12:15 (US) Fed’s Kocherlakota speaks on Economy in Bismarck, ND
– 12:30 (US) Labor Sec Solis delivers a National Press
– 14:00 (US) Fed releases Minutes from Aug. 9th FOMC Meeting
– 15:30 (MX) Mexico July YTD Budget Balance (MXN): No est v -125.4B prior

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