Forget Politics -- Oil & Credit Still Main Stories

Mary Thompson is filling in for Bob Pisani at the NYSE and wrote this blog post.

The markets have kicked off what is supposed to be a quiet week of trading on a down note. The decline is broad, volume is light, and financials and transports are the leading losers.

There is no shortage of news this week with plenty of data on tap and the Democratic National Convention kicking off tonight.

But Fred Dickson, chief market strategist at D.A. Davidson, says the main story for the stock market remains the same: What will push stocks around is either the movement in oil or the smouldering credit pressures that are keeping the financials down.

Dickson says with that backdrop, the markets are still keeping an ear open for a ratcheting up of Russian rhetoric concerning Poland and Georgia, will be listening for any gaffes or policy changes that might be unveiled at the DNC, and remains focused on what the future of Fannie Mae and Freddie Mac might hold.

Speaking of Freddie Mac and Fannie Mae, they received a vote of confidence from Citigroup today. In a note to clients, analyst Bradley Ball writes that while the recent decline in shares of the providers of mortgage funding could limit their financial flexibility, and prompt management and policymakers to take extraordinary action, he thinks shareholders' interests will be preserved. Translation: Ball doesn't think they'll be nationalized. Both stocks are trading higher midday Monday.

AIG is under pressure as well. The ratings agency Fitch says the insurer could face a downgrade, given uncertainty about CEO Bob Willumstad's plan to revive the company, and fears that AIG's mortgage related holdings will lead to further writedowns.

Willumstad is expected to unveil his strategy for AIG at the end of September.

Questions? Comments?