The calendar may say it was Labor Day we just observed, but it felt more like Groundhog Day -- the movie that is, where the same scene keeps repeating itself.

Let's review. 

At the unofficial start of summer (Memorial Day), concerns were building about Europe's debt crisis, China's efforts to get inflation under control, Japan's recovery prospects after the tsunami, partisan politics in the U.S., and a slowdown in the U.S. economy.  At the unofficial end of summer (Labor Day), concerns are building about Europe's debt crisis, China's efforts to get inflation under control, Japan's recovery prospects after the tsunami, partisan politics in the U.S., and a slowdown in the U.S. economy.

The confluence of these factors, which are knotted together by a lack of confidence in policy controls, has the U.S. equity market on track for a decidedly weaker open. 

The S&P futures are currently trading 2.9% below fair value, which is much worse than many foreign markets, although the U.S. in one sense is playing catch up with the losses seen yesterday in markets that were open for trading. 

Germany was the most notable loser on Monday, dropping 5.3% on concerns about growth and the ability to stem the contagion effect of sovereign debt issues.

European markets have settled down some today, yet participants have been reminded that policy can, and will, change on the fly in this uncertain environment. 

Specifically, the Swiss National Bank, frustrated by the safe-haven flows that have strengthened the Swiss franc at the expense of the country's exporters, said "it will no longer tolerate a EUR/CHF exchange rate below the minimum rate of CHF 1.20... [and that] The SNB will enforce this minimum rate with the utmost determination and is prepared to buy foreign currency in unlimited quantities."

This move reportedly helped European markets recover larger losses seen earlier today, yet it strikes us as another shot in a guerilla currency war. 

No country wants to be a safe haven if stronger currencies are going to impact their exporters unfairly in a low-growth environment.  Recall that Brazil last week unexpectedly cut its key interest rate by 50 bps.

So, there is a crossing of the streams now between politics and economics that is going to complicate efforts to come up with solutions that produce a faster and more synchronous rate of growth for the global economy.

President Obama will attempt to present some possible solutions on Thursday when he details growth proposals before a joint session of Congress (and before the NFL kicks off its season). 

We hate to admit it, but we are worried that the market is already looking at that speech and thinking it is D.O.A. given the experience of the debt ceiling negotiations.  To that end, it is looking more and more as if the stimulus buck stops at Congress.

In this regard, then, the equity market has come back from the Labor Day holiday in an unsettled state, which seems to be its natural state these days, because nothing has been settled on a number of major overhanging issues. 

Accordingly, the relative value argument for stocks isn't resonating for anyone with a short-term perspective.  It is even proving to be a tough sell at the moment for participants with a long-term perspective as evidenced by a stupefying desire to own a 10-year Treasury note yielding 1.95%.

--Patrick J. O'Hare, Briefing.com

Patrick J. O'Hare is Chief Market Analyst for Briefing Research, Briefing.com's institutional research service. To request a free trial, please email researchsales@briefing.com.