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Morning Market Briefing – Friday- 09/6/2013

On Thursday, the markets finished with its third consecutive green day. It appears that this market is news bound. Unlike typical markets however, the big news results is small sharp moves that quickly retrace the precious move.

We believe that there is a logical explanation for this. Many of the driving forces behind the markets move these last few days have been inherently neutral.

Let’s take better than expected economic data or peace with Syria for example. When economic data has been much better than expected or war with Syria becomes less of a possibility, the market flies higher. Then the US Treasuries start to climb higher, talks of the Fed tapering QE this month is back on the table and the market heads lower. (In this case gold sells off)

Or the contrary happens. Worse than expected economic data is release or war with Syria begins to seem like it is inevitable, the market crashes lower. Then the risk off trade takes place. The US treasuries start to drop and talks of ending QE is off the table for the near future. (In this case gold goes higher)

This trend should come to an end with the resolution of the Syria issue (either war or no war).

Today, Syria war appears to be less of a possibility, leading to the market opening slightly green. With good news comes the bad news, the increase if US Treasuries and therefor interest rates. The 10 year is approaching 3%. The focus this morning is jobs with the August nonfarm payrolls, nonfarm private payrolls, unemployment rate, hourly earnings, and average workweek.

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