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Day Ahead In US Financial Markets

Wed, Oct 22 2008, 09:13 GMT
by Joseph Brusuelas

Merk Hard Currency Fund

Day In Review:

• US Fed creates $540bln new facility to relieve pressure on money market mutual funds caused by redemption requests. 
• Weak earnings at bellwethers Caterpillar and DuPont, as well as, Texas Instruments and Sun Microsystems were the primary catalyst for a negative day in equities 
• In after hours action. Apple beat earnings estimates coming at 
• Flight to safety continued as the Yen continued to see multiyear highs against the Euro and saw another session of positive action vis-à-vis the dollar.  
• Important regional banking concerns such as KeyCorp, US Bancorp, Regions Financial Corp and National City Corp all signaled that they may ultimately tap the US Treasury’s plan to recapitalize the banks.
• Lehman CDS settlement occurs without any collateral damage in the markets

Day Ahead

• No data risk on Wednesday 
• Commercial Bank reserve settlement with Fed 
• EIA Petroleum Status Report at 10:35 EDT 
• Canadian retail sales and Japanese merchandise trade data at the head of a busy day in international markets 
• US Treasury Paulson to speak on China and the global economy
• Minneapolis Fed President Stern to speak on topic TBA.

• Download Day Ahead in US Financial Markets with charts

Published on  Wed, Oct 22 2008, 09:13 GMT

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Day Ahead In US Financial Markets

Tue, Oct 21 2008, 08:25 GMT
by Joseph Brusuelas

Merk Hard Currency Fund





Day In Review:


• • Bernanke gives support for second stimulus package, but cautioned on raising taxes amid a general economic slowdown
  
• • Treasury Secretary Paulson urged banks to seek capital from the US government
  
• • The snail like pace of improvement in credit conditions continued which gave equities a lift to pen the trading week
  

Day Ahead

• • No macro economic data on deck for Tuesday
  
• • D-Day as Lehman CDS are settled.
  
• • Bank of Canada monetary announcement
  
• • Australian CPI to be released
  
• • ICSC Store and Redbook sales
  
• • 4 and 52 week treasury auction
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Published on  Tue, Oct 21 2008, 08:25 GMT

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Day Ahead In US Financial Markets

Wed, Oct 15 2008, 07:20 GMT
by Joseph Brusuelas

Merk Hard Currency Fund





Day In Review:

• US announces $250bln plan to rescue banking system and FDIC stated it would fully guarantee newly issued, senor unsecured debt from select banks
  
• Market responds positively to response, but equities retrace on only modest improvement in LIBOR, concern about corporate earnings and economic conditions going forward
  
• Yields on Fannie Mae and Freddie Mac corporate debt widened on the back of the government guarantee of banks
  
• Bank of New York Mellon was named by the US Treasury to provide custodial services to administer TARP program
  
• ECB President Trichet urged policymakers to restore the discipline that characterized markets in the immediate post WW-II world. Trichet implied that slower growth in the EU region may pave the way for further rate cuts.



Day Ahead

• Major event risk for the day will be the resetting of LIBOR fixings and the LIBOR-OIS spread. We expect price action in markets to be shaped by where LIBOR and credit spreads settle
  
• Fed Chair Ben Bernanke will speak before the Economic Club of New York on the economic outlook and the financial markets
  
• Heavy slate of macro-data on tap will include the PPI, advance retail sales, and Empire Manufacturing Survey all for September.
• Download full Day Ahead in US Financial Markets with charts

Published on  Wed, Oct 15 2008, 07:20 GMT

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Day Ahead In US Financial Markets

Wed, Oct 1 2008, 08:25 GMT
by Joseph Brusuelas

Merk Hard Currency Fund





The Day Ahead: October 01, 2008





Day In Review:


• • Equity markets saw a broad based relief rally caused by a breakout of optimism that the U.S. Congress will revisit the $700bln rescue package 


• • The FDIC requested temporary authority to increase the deposit insurance limit from $100K to shore up the growing crisis of confidence in the domestic banking system. Members of Congress have suggested the limit could be raised to $250K 


• • The US dollar saw the single largest increase in value against the Euro since its inception. The catalyst was the change in market sentiment that a rescue plan will be obtained and concern over select financial concerns in Europe.
  

Day Ahead:

• • Market action will focus on moves in Washington D.C. to salvage in some form the rescue plan and information provided by the ADP estimate of the employment situation and the ISM survey of manufacturing conditions nationwide.


• • The focus of the market may move to the deteriorating economic situation in Europe and the prospective shakeout in the EU banking system. This does present additional downside risk for the Euro. 


• • The day will see a heavy slate of economic data with the publication of the September domestic vehicle sales, ADP employment estimate, ISM manufacturing survey and August construction spending report. 


• • The EIA petroleum status report will be released at 10:35 EDT.
• Download full Day Ahead in US Financial Markets with charts

Published on  Wed, Oct 1 2008, 08:25 GMT

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Day Ahead In US Financial Markets

Tue, Sep 30 2008, 12:52 GMT
by Joseph Brusuelas

Merk Hard Currency Fund





The Day Ahead: September 30, 2008





Market Movers:


• • The failure of the TARP on the floor of the House of Representatives has moved action towards overnight trading in Asia and early morning action in Europe. With the credit markets currently jammed up, volatility should be expected to shape the overnight action and the direction of US markets in early morning trading Tuesday. 


• • News flow will provide direction for the markets as Congress dithers over what action to take to stem the tide of the growing crisis. It does appear that the plan in its current form, or in another, will not be resubmitted to House until Thursday at the earliest. 


• • Look for possible Treasury or Fed announcements during the pre-market hours. Traders have priced in a full fifty basis point cut in the federal funds rate. While we do not think it a likely event, overt concerns in the market regarding the fragility of the financial system and the economic fallout of the credit panic, it cannot be completely discounted. 


• • Lingering concern over the condition of the US banking system and growing concern of the status of the financial sector in Europe should be the major economic factors that drive pricing action during the day.


• • Macro data will see the July Case Schiller estimate of price action in the housing sector and the September Chicago PMI and Consumer Confidence reports. ISCS same store sales estimate and the Redbook survey will provide information on the condition of the retail sector and the appetite for retail goods among the public. These data will be second order questions during the upcoming trading day. 


• • The US Treasury will conduct a four-week bill auction at 1:00 PM and settle a two year and five year note.


• Download full report with charts

Published on  Tue, Sep 30 2008, 12:52 GMT

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Merk  | Palo Alto, California
http://www.merkfund.com | insights@merkinvestments.com

Legal disclaimer and risk disclosure

The Merk Hard Currency Fund is a no-load mutual fund that invests in a basket of hard currencies from countries with strong monetary policies assembled to protect against the depreciation of the U.S. dollar relative to other currencies. The Fund may serve as a valuable diversification component as it seeks to protect against a decline in the dollar while potentially mitigating stock market, credit and interest riskswith the ease of investing in a mutual fund. The Fund may be appropriate for you if you are pursuing a long-term goal with a hard currency component to your portfolio; are willing to tolerate the risks associated with investments in foreign currencies; or are looking for a way to potentially mitigate downside risk in or profit from a secular bear market. For more information on the Fund and to download a prospectus, please visit www.merkfund.com. Investors should consider the investment objectives, risks and charges and expenses of the Merk Hard Currency Fund carefully before investing. This and other information is in the prospectus, a copy of which may be obtained by visiting the Fund's website at www.merkfund.com or calling 866-MERK FUND. Please read the prospectus carefully before you invest. The Fund primarily invests in foreign currencies and as such, changes in currency exchange rates will affect the value of what the Fund owns and the price of the Funds shares. Investing in foreign instruments bears a greater risk than investing in domestic instruments for reasons such as volatility of currency exchange rates and, in some cases, limited geographic focus, political and economic instability, and relatively illiquid markets. The Fund is subject to interest rate risk which is the risk that debt securities in the Funds portfolio will decline in value because of increases in market interest rates. As a non-diversified fund, the Fund will be subject to more investment risk and potential for volatility than a diversified fund because its portfolio may, at times, focus on a limited number of issuers. The Fund may also invest in derivative securities which can be volatile and involve various types and degrees of risk. For a more complete discussion of these and other Fund risks please refer to the Funds prospectus. The views in this article were those of Axel Merk as of the newsletter's publication date and may not reflect his views at any time thereafter. These views and opinions should not be construed as investment advice nor considered as an offer to sell or a solicitation of an offer to buy shares of any securities mentioned herein. Mr. Merk is the founder and president of Merk Investments LLC and is the portfolio manager for the Merk Hard Currency Fund. Foreside Fund Services, LLC, distributor.