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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.
Joseph
Brusuelas
Chief
Economist
VP Global Strategy
Merk
Investments LLC
Merk Investments LLC is the manager
of Merk Mutual Funds, including the Merk Asian Currency Fund and the Merk
Hard Currency Fund. The Merk Asian Currency Fund invests in a basket of Asian
currencies. Asian currencies the Fund may invest in include, but are not
limited to, the currencies of China, Hong Kong, Japan, India, Indonesia,
Malaysia, the Philippines, Singapore, South Korea, Taiwan and Thailand.
The Merk Hard Currency Fund invests
in a basket of hard currencies. Hard currencies are currencies backed by
sound monetary policy; sound monetary policy focuses on price stability.
The Funds may be appropriate for you
if you are pursuing a long-term goal with a hard or Asian 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 Funds and to download a prospectus, please visit www.merkfund.com.
Investors should consider the
investment objectives, risks and charges and expenses of the Merk Funds carefully
before investing. This and other information is in the prospectus, a copy of
which may be obtained by visiting the Funds' website at www.merkfund.com or calling 866-MERK
FUND. Please read the prospectus carefully before you invest.
The Funds primarily invest in
foreign currencies and as such, changes in currency exchange rates will
affect the value of what the Funds own 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 Funds are 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. The Funds may also invest in derivative securities which can be
volatile and involve various types and degrees of risk. As a non-diversified
fund, the Merk Hard Currency 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. For a more complete
discussion of these and other Fund risks please refer to the Funds'
prospectuses.
This report was prepared by Merk
Investments LLC, and reflects the current opinion of the authors. It is based
upon sources and data believed to be accurate and reliable. Opinions and
forward-looking statements expressed are subject to change without notice.
This information does not constitute investment advise nor a solicitation or
an offer to buy or sell any products or services. Foreside Fund Services,
LLC, distributor.
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