• The Jewish New Year Holiday may mean slower trading on Monday
• A Federal Reserve hike in interest rates could come as early as Tuesday
• How long can oil prices stay down as rig counts keep declining?

The Jewish New Year holiday began Sunday night, and many investors may be missing from their desks today, meaning less trading volume and, perhaps, less volatility until tomorrow.

It’s possible some were even getting an early start on Friday, squaring positions for a long weekend, because Friday was the relatively calm trading session many had been seeking for some time. The Dow Jones average (INDEX:DJI) finished Friday up just 0.63%, or 102.96 points, at 16,433. That was the best performance among the major averages, with the Nasdaq (INDEX:COMP) rising .54%, or 26.09 to 4,822 and the S&P (SPX) up .45% or 8.76 to 1,961.

The big winners on Friday were the usual suspects. Apple (NASDAQ:AAPL) was up 1.46% to $114.21. Gilead (NASDAQ:GILD), a biotech company popular with investors, was up 2.22% to $109.63. Amazon.Com (NASDAQ:AMZN) was up 1.38% to $529.44, and Walt Disney (NYSE:DIS) was up 1.8% to $104.45. The big losers Friday were focused on China, with ADRs of PetroChina (NYSE:PTR) falling 3.33% to $74.43 and those of China Life Insurance (NYSE:LFC) losing 1.67% to 17.04.

Over the weekend China said it would reform state-owned enterprises to spur growth and the United Auto Workers said they would target Fiat-Chrysler (NYSE:FCAU) first in contract talks, hoping for a deal other car companies will follow.

Politics Sours the Mood

The long political season in the U.S. finally started this Labor Day, with the second Republican Presidential Debate set for this week and Democratic debates to follow. The emotions of partisans on both side could impact trading, with Democrats worried about keeping power, which they think may be bad for their investments, and Republicans fearing they won’t get it, which they also think will be bad for their investments.

This could represent an opportunity for smart traders to get some bargains, because economic cycles don’t generally follow political ones, they lead them. The current market risk is that a sour mood toward incumbents may move Republicans to shut down the federal government later this month, in order to prove their toughness, and that would be negative for stock prices.

The Interest Rate Decision

Another factor that could sour the mood of traders will be the Fed’s decision on interest rates, expected Tuesday afternoon. If the Fed chooses to hike rates, even by .25%, it could be a negative for stock markets around the world.

Many economists now feel a rate hike won’t happen this month, due to weakness in China and the lack of inflation in the U.S. .

Thus any hike would go into the category of the unexpected – markets hate the unexpected.

Are These the Good Old Days?

Despite the current mood, traders may look on this second week of September as the good old days. The U.S. count of drilling rigs continues to fall and prices will have to rise at some point, because oil is being sold below production costs. Interest rates will have to go up at some point, and that will also mean increased costs. There will be U.S. wage pressures, putting pressure on profits and, thus, stock prices.

The last month may be the first jolt of many.