Market Preview: A September to Dread

"In our view, the Chairman may not commit to any particular policy option in his Jackson Hole speech, though he will make clear that the Committee maintains an easing bias. The August employment report could be the deciding factor," the firm said Monday, adding later: "In the meantime, we expect them to enact a 'verbal easing' by extending the guidance on the fed funds exit from late 2014 to late 2015. In turn, we have pushed out our expectations for the first fed funds rate increase from late 2013 to late 2014."

Deutsche Bank is expecting nonfarm payrolls to show an increase of 150,000 in August, which would be well above the current consensus estimate of 105,000. The firm believes a reading below 100,000 would prompt the Fed to "opt for a more aggressive response in September."

UBS also sees the August employment report as key to what the Fed does next, calling the datapoint "most critical" to the final outcome of the central bank's next policy meeting.

"Bernanke will probably explain what mechanisms the Fed would use to ease policy further but avoid a promise of further easing," the firm said of its expectations for the Jackson Hole speech. "Some discussion of a mechanism to open up bank lending channels via the Fed's discount window in particular seems quite likely. Our US team continue to see the odds of Fed easing at the September FOMC meeting at close to 50-50."

In the meantime, Apple(AAPL) could continue to dominate the spotlight. Monday saw the stock, up 67% so far in 2012, hit another all-time high after the company's patent lawsuit victory over Samsung. Jefferies, already bullish with a buy rating and $900 price target, gushed about the news and said it expects the company to go after other Android players now.

After Monday's closing bell, Apple promoted Dan Riccio and Craig Federighi to senior vice presidents and said Bob Mansfield, who was going to retire, will stay with the company to work on future projects. Mansfield is senior vice president of hardward engineering at Apple, reporting to CEO Tim Cook.

Apple is expected to unveil the iPhone 5 on Sept. 12 but before then, Amazon.com(AMZN) will be looking to create some buzz with its own press event on Sept. 6. Bank of America Merrill Lynch anticipates the company will unveil a new Kindle Fire product line, looking to get the jump on Apple's iPad Mini.