September Begins with Positive Notes

Economic Data

- (BR) Brazil July Industrial Production M/M: 0.7% v 0.5%e; Y/Y: -3.6% v -3.7%e
- (UK) Citi/YouGov Aug poll: 12-month inflation expectations: 2.3% v 2.2% prior
- (BE) Belgium Q2 Final GDP Q/Q: 0.1% v 0.1% prelim; Y/Y: 1.0% v 1.0% prelim
- (EU) Weekly ECB Forex Reserves: €213.3B v €213.3B prior
- (SG) Singapore Aug Purchasing Managers Index: 49.7 v 51.0e; Electronics Sector Index: 50.7 v 51.9e
- (CA) Canada Aug RBC Manufacturing PMI: 54.8 v 54.3 prior
- (US) Aug Final Markit Manufacturing PMI: 57.9 v 58.0e
- (US) Aug ISM Manufacturing: 59.0 v 57.0e; Prices Paid: 58.0 v 58.8e
- (US) July Construction Spending M/M: 1.8% v 1.0%e
- (US) Sept IBD/TIPP Economic Optimism: 45.2 v 45.5e
- (DE) Denmark Aug Foreign Reserves (DKK): 441.6B v 440.9B prior

- Solid US August manufacturing data is putting a bid under equity markets this morning, helping dispel the premarket swoon, while the UST 10-year yield has risen to 2.40%. The DJIA is up 0.06% S&P500 is up 0.07% and the Nasdaq is up 0.34%.

- The ISM manufacturing index climbed to its highest level in three years in August. The production and new orders components were very strong, with new orders index at its highest level since April 2004. Meanwhile, the July construction spending report was almost twice the expected expansion, although much of the big gain was concentrated in the non-residential sector. Ahead this week will be the beige book report and the August jobs report, with consensus expectations for nonfarm payrolls around +200K.

- Western leaders are travelling to Wales to attend the NATO conference scheduled for Sept 3-4. NATO is expected to endorse the establishment of a rapid-reaction force capable of deploying quickly to Eastern Europe. President Obama was making a brief stopover in Tallinn, Estonia en route to the summit, and Estonia's leaders said they would like to see permanent NATO bases on Estonian soil.

- There have been multiple concerning reports out of Saudi Arabia this morning. There was a small attack on an oil pipeline in the eastern area of the country, just after Saudi officials detained 88 individuals that were said to be preparing terrorist attacks at home and abroad. WTI Crude has not responded much to the news, with the front-month contract falling back into the $94 handle after the move higher late last week.

- A rush of deal news is in headlines this morning after a slow August for M&A. Norwegian Cruise Line Holdings has agreed to acquire Prestige Cruises International Inc. in a deal valued at about $3.03 billion. Prestige is owned by PE firm Apollo Global Management, which also has a 20% stake in Norwegian. Compuware reached a tentative deal to sell itself for $2.5 billion to PE fund Thoma Bravo and become a private-held company. Compuware had been under pressure from activist investors to cut costs, lay off staff and field buyout offers for more than a year. Dollar General raised its bid for Family Dollar to $80/shr or $9.1 billion and said it was willing to divest twice as many locations after its first proposal was rejected in favor of the lower offer from Dollar Tree, valued at $74.50/shr. Dollar General's prior offer was $78.50/shr, which Family Dollar rejected due to anti-trust issues.

- Among the biggest decliners this morning is Conn's, with shares of CONN down 30% after a big miss in the firm's second quarter results. Executives said the retail sector's results were very good, with comps up an impressive 11.7%. However credit operations ran into unexpected headwinds, resulting in portfolio performance deterioration.  

Looking Ahead

- 11:30 (US) Treasury to sell 3-Month and 6-Month Bills
- 12:00 (IS) Iceland Q2 Current Account Balance (DKK): No est v -12B prior
- 16:00 (US) Crop Condition Report
- 17:00 (CO) Colombia July Exports: $4.8Be v $4.7B prior
- 19:01 (UK) Aug BRC Shop Price Index Y/Y: No est v -1.9% prior
- 21:00 (CN) China Aug Non-manufacturing PMI: No est v 54.2 prior
- 21:30 (AU) Australia Q2 GDP Q/Q: 0.4%e v 1.1% prior; Y/Y: 3.0%e v 3.5% prior
- 21:35 (JP) Japan Aug Services PMI: No est v 50.4 prior
- 21:45 (CN) China HSBC Aug Services PMI: No est v 50.0 prior