Amid the ongoing government shutdown, we look at alternate sources of data to draw a picture of what’s happening with inflation, the labor market, and home sales. Our experts provide insights on the market’s reaction to these reports, the anticipated Federal Open Market Committee (FOMC) meeting next week, and the performance of different sectors and asset classes. We also touch on some unusual market dynamics, with low-quality and high-beta stocks outperforming higher-quality companies. Finally, we talk sandwiches in celebration of National Bologna Day.

 

Brian Pietrangelo, Managing Director of Investment Strategy

George Mateyo, Chief Investment Officer

Stephen Hoedt, Head of Equities

Rajeev Sharma, Head of Fixed Income
 

02:06 – We highlight three key reports from the week: state-level initial weekly unemployment claims suggest no cause for concern, existing home sales are up slightly, and—despite the government shutdown—the Bureau of Labor Statistics was allowed to compile and release a mixed but overall favorable Consumer Price Index report.

06:00 – Corporations seem to be navigating increased costs due to tariffs by cutting their labor force.

08:50 – The Fed is likely to cut interest rates by 25 basis points at next week’s FOMC meeting, with many expecting another 25 basis point cut in December, and several more next year. 

10:44 – October continues to be a rally month for the bond market thanks to low market volatility, tight credit spreads, and abundant liquidity.

12:59 – Equities continued to climb and set all-time highs as third quarter earnings season continues, with a spotlight on reports from Microsoft, Amazon, and Meta next week.

15:53 – We discuss differences in quality within the equities and bond markets, and posit an apparent shift in principles and heuristics in equities between the pre- and post-pandemic periods.

 

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