From the desks of Stanley Katz & Lauren Madera
HAPPY NATIONAL SEAFOOD BISQUE DAY! NOTHING SAYS “FALL” LIKE SEAFOOD BISQUE, RIGHT?
Despite quite a bit of volatility, the three major U.S. stock market indices closed the week solidly in the green (i.e., DJIA: +1.56%, S&P 500: +1.70%, Nasdaq: +2.14%) as investors focused on corporate fundamentals rather than Washington drama. Schwab’s Market Perspective tackles a question that’s become increasingly relevant: where can we find answers when government data goes dark? The firm examines how the Fed might navigate monetary policy decisions without the usual economic data releases. Options include fixed income markets themselves, which could offer clues about inflation and growth trajectories. With the CPI report scheduled for October 24, the Fed will have at least one key inflation reading before its next meeting. Schwab also explores the unusual dynamics in private sector payroll data versus government employment figures. They note that companies facing tariff pressures might accelerate layoffs while the government shutdown simultaneously reduces federal worker compensation. The confluence creates an economic moment where traditional leading indicators are either delayed or distorted, forcing investors to rely more heavily on corporate earnings reports and forward guidance to gauge economic health.
BlackRock’s analysis provides a reassuring counterpoint to concerns about the dollar’s depreciation this year. The firm argues that the dollar’s weakness doesn’t signal a loss of haven status or retreat from U.S. assets. Instead, it reflects two traditional drivers: (1) Federal Reserve rate cuts that erode the dollar’s yield advantage and (2) the return of term premium (i.e., the extra compensation investors demand for holding longer-term bonds). In other words, rather than representing an existential crisis for U.S. asset dominance, the dollar’s decline is functioning as it historically has—responding to interest rate differentials and debt dynamics while creating pockets of opportunity across global markets.
Below are links to a number of third-party research reports that we have read and analyzed over the past week. We hope you will find the information interesting, useful, and worthwhile.
Schwab:
BlackRock:
Argus:
Capital Group:
Northern Trust:
Stanley Katz & Lauren Madera, Financial Advisors
ClientFirst Financial Strategies, Inc.
937-293-5500
Source for weekly stock market returns: Barron’s.
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