Economic Data Summary - The ISM manufacturing PMI for September shows a headline reading of 49.1%, indicating contraction and the lowest level since March [1] - Prices paid index decreased to 61.9%, down from 63.7%, marking the second lightest number of the year [2] - New orders index fell to 48.9%, below expectations and lower than the previous month's 51.4%, the weakest since July [2] - Employment index recorded at 45.3%, better than the previous month's 43.8%, but still in contraction territory [3][4] - The employment index is the highest since May when it was 46.8% [4] - Interest rates are declining significantly due to weak ADP data, with expectations of a delayed jobs report [4]

Group 1 - Boston Fed President Susan Collins indicated that it may be appropriate to ease policy further this year if supported by data, while maintaining a modestly restricted policy stance [1][2] - Collins emphasized the need for the Fed to restore price stability while managing risks of labor market weakening, noting that the labor market is not expected to soften significantly [2][4] - There is a current state of heightened uncertainty affecting firms' hiring decisions, with productivity enhancements tempering hiring amid solid economic growth [3][4] Group 2 - Collins anticipates that hiring will increase as firms adjust to the new tariff environment, with inflation expected to remain elevated into next year and gradually return to the 2% target over the medium term [3] - Fed Vice Chair Phil Jefferson highlighted the dual risks of employment being tilted to the downside and inflation to the upside, reflecting the challenging economic landscape [4][5] - The Fed is navigating a complex situation with higher inflation pressures on one side and employment pressures on the other, relying on data that may be becoming less reliable [5] Group 3 - Doug McMillan from Walmart noted that the company is not hiring more and is instead focusing on getting existing employees to perform new tasks, indicating a shift in retail strategies amid competition with Amazon [6] - Retailers are recognizing the existential challenges posed by current market conditions, as indicated by conversations with various industry players [6][7]

Australia will report a narrower budget deficit for fiscal 2025 than the center-left government forecast about six months ago as strong employment gains helped bolster revenue https://t.co/J6BlBq8Xuu ...

KEY EVENTS NEXT WEEK: 👇- All Week: Fed officials speaking- Tuesday: JOLTs Job Openings- Wednesday: ADP Employment Report & ISM Manufacturing PMI- Thursday: Initial Jobless Claims- Friday: Non-Farm Payrolls & Unemployment Rate https://t.co/a9wAaXyHaG ...

Market Outlook - Piper Sandler expects improving EPS breadth to take over after three years of PE expansion [2] - The market has priced in very little macro risk, making further multiple expansion difficult, earnings will need to drive growth [3] - Stable to slightly lower interest rates over the last two and a half years provide tailwinds to the economy [5] - Globally, there have been approximately 95 rate cuts in the last several quarters [5] - Analyst estimates are starting to broaden out, and housing data is stabilizing to slightly improve [6] - Rising small cap and midcap earnings estimates are observed for the first time in three years [7] Economic Indicators - The current backdrop is considered a Goldilocks scenario, with a soft enough labor market to allow gradual rate cuts by the Federal Reserve [8] - Broadening of earnings estimates has been strong across mid, small, and large caps in the last two months [10] - Green shoots are appearing in housing data, with purchase applications and refi activity continuing to grind higher [10] - The Fed funds rate is 125 basis points lower and is expected to be another quarter point lower by year end [11]

Employment Trends in New York City - The large downward BLS (Bureau of Labor Statistics) employment revision contained some positive aspects for New York City [1] News Source - The information was reported by foxjust via @opinion [1]

Core Viewpoint - The dollar is rising following Federal Reserve Chair Jerome Powell's cautious remarks regarding future interest-rate cuts, indicating uncertainty in monetary policy direction [1][2]. Group 1: Federal Reserve's Stance - Powell expressed concerns about the risks to both employment and inflation, refraining from providing clear signals about potential rate cuts in the upcoming October meeting [1][2]. - He warned that aggressive rate cuts could leave inflation unaddressed, potentially necessitating future rate hikes [2]. - Conversely, maintaining high rates for an extended period could lead to a softening labor market [2].

Benefits of Education and Training - Education and training benefit workers, employers, and the country [1]

Inflation & Employment Risks - Near-term inflation risks are skewed to the upside, while employment risks lean towards the downside, creating a complex situation with no risk-free solutions [1] - Overly aggressive easing could leave inflation unresolved, potentially requiring corrective measures to achieve the 2% target [2] - Maintaining a restrictive policy for too long could unnecessarily weaken the labor market [2] Monetary Policy Stance - Increased downside risks to employment have altered the balance of risks in achieving the dual mandate [3] - The Federal Reserve lowered the target range for the federal funds rate by 25 basis points to 4% - 425% [3] - The current policy stance is considered modestly restrictive, allowing flexibility to respond to economic developments [3]

Inflation Risks - Near-term inflation risks are tilted to the upside, presenting a challenging economic situation [1] - Tariffs' impact on inflation has been modest, with retailers and importers absorbing costs rather than passing them to consumers [3] - The pass-through of tariff costs to consumers has been slower and less significant than expected, creating uncertainty about future inflation trends [4] Labor Market - Employment risks are tilted to the downside, indicating potential challenges in the labor market [1] - The labor market exhibits weakness with low job creation, although the unemployment rate and quits rate remain low [5] - The labor market has reached an unusual stability characterized by lower demand and supply for workers, posing a downside risk [6] Revenue Collection - The federal government is collecting substantial revenue, estimated at a pace of 300 to 400 billion USD per year [1] - The source of tariff payments is uncertain, with potential candidates including foreign exporters, domestic companies, retailers, or end consumers [2] Monetary Policy - The responsible approach involves monitoring and waiting to avoid making mistakes on inflation [5] - Inflation control is a key mandate, requiring careful observation of economic developments [4]