European strength propels the S&P 500 above 2000

Economic Data

• (IL) Israel July Unemployment Rate: 6.2% v 6.3% prior
• (BR) Brazil Aug FGV Consumer Confidence: 102.3 v 106.9 prior
• (TR) Turkey Aug Real Sector Confidence: 106.0 v 106.4 prior; Real Sector Confidence NSA: 106.8 v 109.0 prior
• (TR) Turkey Aug Capacity Utilization: 74.7% v 74.9% prior
• (US) July Chicago Fed National Activity Index: +0.39 v +0.20e
• (IL) Israel Central Bank cuts Base Rate by 25bps to 0.25%; not expected
• (BE) Belgium Aug Business Confidence: -7.3 v -8.0e
• (MX) Mexico Jun Retail Sales Y/Y: 1.1% v 1.3%e
• (EU) ECB calls for bids in 7-Day Main Refinancing Tender
• ((US) Aug Preliminary Markit Services PMI: 58.5 v 58e; Composite PMI: 58.8 v 60.6 prior
• (MX) Mexico Q2 Current Account Balance: -$6.98 v -$4.0e
• (US) July New Home Sales: 412Ke v 429Ke
• (US) Aug Dallas Fed Manufacturing Activity: 7.1 v 12.8e

- US stocks began the week on another strong note helped by a rally in Europe. The S&P crossed 2000 for the first time ever. Weekend analysis of commentary from ECB's Draghi at Jackson Hole has suggested they maybe even closer to enacting more stimulus policy. The recent run of weak data from Germany in particular (including today's IFO readings), and his highlighting of August decline in inflation expectations have some speculating unconventional measures are in the offing. Government bond yields in Europe plunged ahead of the US market open. The Portugal 10-year yield fell below 3% for the first time while the Bund dropped below 0.93% to a new lifetime low while the US 10-year is back below 2.4%.

- Consolidation remains a key theme in several industries. Roche made an all cash play for Intermune at $74/share, up more than 60% from where it was trading when the latest round of takeover speculation broke out in late July. The deal is valued at more than $8B and helps Roche expand into the treatment of rare or incurable diseases. Canada's Tim Hortons has gapped up close to 20% after it was confirmed they are in talks with Burger King Worldwide for a potential inversion type deal which has sent BKW shares up 15%. In retail land Ann Inc remains under pressure by activist investors to accelerate its pursuit of potential PE interest.

- GrubHub shares have slid 8% after registering 10M shares mostly for holders.

- US home builders came under a little pressure after July new home sales fell over 2% m/m missing expectations. The data suggests builders may have to pull back on recent prices increases to buoy demand.

- USD has consolidated its recent up move following Jackson Hole central bank speak. Early in the session the USD/JPY hit a fresh 7-month high at 104.50 while the Euro consolidates around 1.32 at a 11-month low.

Looking Ahead

All times listed for economic events are denominated in Eastern Standard Time (Add 4 hours for GMT equivalent)

• (BR) Brazil July Total Federal Debt (BRL): No est v 2.202T prior
• (PT) Portugal Year-to-Date Budget Report
• (PE) Peru Q2 GDP Y/Y: 1.7%e v 4.8% prior
• 11:30 (US) Treasury to sell $53B in 3-Month and 6-Month Bills
• 16:00 (US) Crop Condition Report