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Stocks edge higher on strong data

David Russell (david.russell@optionmonster.com)

Stocks are edging higher today as Syrian war fears recede and economic data remains strong.

S&P 500 futures are up less than 0.2 percent, while European indexes are down about 0.5 percent. Asia, however, rallied sharply in the overnight session: Shanghai surged more than 3 percent after Chinese exports rose more than expected in August and inflation continued to ease. Japan's Nikkei gained 2.5 percent after Tokyo won the right to host the 2020 Summer Olympics, spurring hopes for increased investment and employment. Its second-quarter economic growth number was also revised higher.

Attention today will likely focus on President Obama's multiple appearances on the main news outlets as he presses his case for limited military strikes against Syria. The weekend saw opposition stiffening against war among both conservative Republicans and liberal Democrats. Markets rallied on Friday after Obama's inconclusive comments on the matter caused traders to doubt that action will be taken.

The S&P 500 has been trying to bounce after falling in August for only the second time in the last 10 months. While initially rattled by higher interest rates, investors are increasingly focusing on improvements in the global economy, highlighted by strong data in Europe, Asia, and the United States.

The global theme has been especially strong in the last three weeks as emerging-market, material, and energy stocks outperform. Our researchLAB analystsis tool, for instance, shows ocean shippers, coal miners, and Chinese and Russian companies leading gains.

Russia may also be in focus this week as the Moscow launches a large sovereign-debt sale. Strong demand could boost demand for the country's stock market.

Chinese industrial production and retail sales are the next big data point, scheduled for the overnight session tomorrow morning. European industrial production and U.S. retail sales follow on Thursday and Friday, respectively. Attention will also focus on the Federal Reserve's next meeting Sept. 17 and 18.

Commodities are mostly bearish as oil and silver fall about 1 percent. Most agricultural products are lower, though copper is bucking the trend with a gain of almost 1 percent--another sign of confidence in the global economy.

Foreign-exchange trading is more supportive of the bulls, with the safe-haven Japanese yen down across the board. The euro, Australian dollar, and Canadian dollar, which tend to follow sentiment toward the global economy, are higher.

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