Economic Indicators - The health of the consumer is crucial for Federal Reserve decision-making regarding rate cuts, particularly with ongoing inflation concerns [1] - Investors should monitor the labor market, which has been identified as a weak area by Fed Chair Jerome Powell [1] Market Sentiment - The market is currently in a precarious position, where the prospect of near-term rate cuts could be bullish for stocks, but economic deterioration could quickly change this sentiment [2] - Recent focus on AI deal-making and a strong earnings season has overshadowed economic data, which has been affected by a government shutdown [3] Earnings and Stock Performance - Morgan Stanley highlights positive revenue surprises and EPS growth as factors that could continue to lift stocks into 2026 [11] - Palantir reported a record quarter but saw its stock fall in premarket trading, indicating market volatility despite strong earnings [5] Labor Market Data - Investors should pay attention to ADP figures and ISM non-manufacturing data as indicators of labor market health, with better-than-expected data potentially dampening rate cut prospects [6][7] - Challenger, Gray & Christmas's monthly report on job cuts is also significant, as better-than-expected data could negatively impact stock performance [7] Sector Analysis - Healthcare stocks have underperformed despite strong earnings growth, but analysts believe the sector is poised for a turnaround due to various factors including regulatory clarity and defensive nature in a weak job market [13][14][15] - The healthcare sector has consistently added the most employees over the past year, indicating investment in future growth [16] Portfolio Adjustments - The First Trade index has been adjusted, swapping Microsoft for Palantir, reflecting a focus on AI-driven companies [17][18]

Market Overview - The markets are anticipating oral arguments at the Supreme Court regarding the legality of President Trump's reciprocal tariffs, with a ruling expected by late this year or early 2026 [1] - The S&P 500 Index is down -0.97%, the Dow Jones Industrials Index is down -0.69%, and the Nasdaq 100 Index is down -1.29% [5] - The US government shutdown, now in its sixth week, is the longest in history and is negatively impacting market sentiment and the economy [7] Corporate Earnings - Q3 corporate earnings season is strong, with 80% of S&P 500 companies reporting so far beating forecasts, but profits are expected to rise by only +7.2% year-on-year, the smallest increase in two years [6] - Notable earnings reports include Palantir Technologies, which despite better-than-expected Q3 sales, saw its stock drop over -7% due to high valuations [4][14] - Zoetis cut its full-year revenue estimate to $9.40 billion-$9.48 billion, leading to a stock decline of more than -11% [12] Stock Movements - The Magnificent Seven tech stocks are under pressure, with Tesla down more than -3% and Nvidia down more than -2% [11] - Sarepta Therapeutics is down more than -33% after missing a primary endpoint in a study [12] - Norwegian Cruise Line Holdings is down more than -11% after reporting Q3 revenue below consensus [13] Interest Rates and Economic Indicators - The markets are pricing in a 70% chance of a -25 basis point rate cut at the next FOMC meeting [2] - T-note prices are supported by stock market weakness and the ongoing government shutdown, which may lead to further interest rate cuts [9]

Group 1 - Indian shares are expected to open flat to slightly lower due to mixed signals from Federal Reserve officials regarding future rate cuts [1] - Benchmark indexes Sensex and Nifty ended marginally higher after a choppy session, indicating potential stock-specific movements in the market [1] - The Indian rupee weakened by 5 paise to settle at 88.75 against the dollar amid foreign fund outflows [1] Group 2 - Asian markets traded mixed as a tech rally lost momentum due to concerns over high valuations [2] - The dollar index remained near three-month highs, while gold prices were subdued below $3,990 per ounce [2] - Oil prices edged lower after four consecutive days of gains [2] Group 3 - U.S. stocks ended mixed with the Nasdaq Composite gaining 0.5% and the S&P 500 rising by 0.2% following significant announcements from OpenAI and Microsoft [3] - The U.S. manufacturing sector contracted for the eighth consecutive month, indicating ongoing economic challenges [3] - The Dow Jones Industrial Average fell by 0.5%, reflecting a divergence in market performance [3] Group 4 - European markets closed mostly higher, driven by a rise in automakers following reports of resumed shipments from China [4] - The pan-European Stoxx 600 ended flat with a positive bias, remaining close to record highs reached the previous week [4] - The German DAX surged by 0.7%, while France's CAC 40 and the U.K.'s FTSE 100 experienced slight declines of 0.1% and 0.2%, respectively [4]

Market Overview - Bitcoin's price dropped to approximately $107,000, reflecting a broader market downturn, with a decline of roughly 5 percent in October, marking its first loss during the traditionally bullish "Uptober" month since 2018 [1][5] - Despite the recent drop, Bitcoin remains significantly higher compared to its level at the start of the year [1][5] Cryptocurrency Price Dynamics - The recent trade agreement between the US and China had minimal impact on cryptocurrency price growth, with Bitcoin's price on Coinbase falling below the global market average, resulting in a negative Coinbase premium [2][5] - A negative premium indicates weak market demand and increased selling pressure on Bitcoin, a trend historically associated with sustained periods of market weakness [3][5] Investor Sentiment and Economic Indicators - Investors are exercising caution ahead of the US jobs report, which is anticipated to show slower hiring while keeping unemployment steady [3][5] - Bitcoin's struggle to break the key $113,000 level signals weakening demand and potential for further declines, with the upcoming jobs report expected to shape market sentiment and guide expectations for rate cuts [5] Economic Context - During a meeting in Busan, US President Donald Trump and Chinese President Xi Jinping agreed to reduce US tariffs on Chinese goods from about 57 percent to roughly 47 percent, in exchange for China pausing new export controls on rare earths and resuming purchases of American goods [5]

Group 1: Dollar Strength and Market Dynamics - The dollar has been a significant theme in the first part of the year, contributing to the narrative of the end of U.S. exceptionalism for 2025 [1][2] - Recent movements indicate the dollar is breaking from its ranges against key currencies, suggesting potential for continued strength into year-end [3] - With approximately 70% of the market pricing in a Federal Reserve rate cut in December, there is potential upside in yields that could support the dollar's movement [4] Group 2: Asset Correlations and Market Volatility - There is a noted breakdown in cross-national correlations, with movements in the dollar not affecting other asset classes like gold or private credit [5] - The market may be entering a more volatile phase, reminiscent of the late 1990s tech bubble, with potential for significant corrections while still seeing overall market growth [7] - Higher dollar and yields indicate tightening financial conditions, which may negatively impact precious metals and cryptocurrencies [8] Group 3: Yen Weakness and Market Outlook - Structural factors contributing to yen depreciation remain strong, including negative real yields and a poor growth outlook [9] - The dollar is expected to strengthen against the yen, with market sentiment leaning towards further yen weakness [10] - Intervention from Japanese officials is not anticipated unless the dollar-yen exchange rate exceeds 158 [10]

Core Insights - TPG RE Finance Trust (TRTX) is currently trading at a significant double-digit discount to its book value per share, indicating potential undervaluation in the market [1] - The preferred shares of TRTX are offering elevated yields compared to their levels from a year ago, suggesting an attractive income opportunity for investors [1] - The Federal Reserve is anticipated to further cut interest rates, which may positively impact the performance of REITs and other income-generating assets [1] Company Focus - Pacifica Yield is focused on long-term wealth creation by targeting undervalued yet high-growth companies, high-dividend stocks, REITs, and firms in the green energy sector [1]

My gameplan at the moment is this➥ QT ends in December➥ Rate cuts (2-3) next year, will mark the top➥ Anticipating Q2 top, once they signal no further cuts➥ Take profits into stables on many of my long term holds➥ Have capital ready to deploy into new narratives and short term time frames, to rotate back into stables➥ Be patient and hold the stable bag through late 2026 + 2027, in anticipation of better prices for longer term appreciation➥ Dont shy away from equity market and stock exposure, especially new ...

Investment Rating - The report maintains an equal-weight rating on equities, overweight in core fixed income, and underweight in other fixed income [4][5]. Core Insights - The Federal Reserve is expected to initiate rate cuts, with four consecutive 25 basis point cuts anticipated through January 2026, leading to a terminal rate of 2.875% [2][20]. - The macroeconomic environment is characterized by a focus on improving expectations despite ongoing trade tensions and global slowdown risks, with a preference for quality assets [3][4]. - The report highlights a constructive outlook on USD assets, while cautioning about potential pressures on the dollar due to rising policy uncertainty [4]. Economic Outlook - In the US, real GDP growth showed a recovery in Q2 2025, but domestic demand has slowed, averaging 1.9% quarter-on-quarter in the first half of the year [8]. - The Euro area experienced stable GDP growth in the first half of 2025, with PMIs indicating continued firmness [9]. - Japan's nominal growth remains positive, supported by resilient manufacturing sentiment, while China's GDP growth is expected to soften in the second half of the year due to reduced stimulus [9]. Sector Recommendations - In the US, the report favors quality cyclical stocks and those with high operational efficiency, while in Japan, it recommends companies benefiting from domestic reflation and defense spending [6]. - Key sectors in Europe include defense, banks, software, telecoms, and diversified financials, with a focus on resilient market pockets [6]. - Emerging markets are favored towards financials and domestic-focused businesses over exporters [6]. Earnings Forecasts - The S&P 500 is projected to have an EPS of 259 for 2025, increasing to 283 in 2026, reflecting a 7% and 9% year-on-year growth respectively [7]. - The MSCI Europe index is expected to see a slight decline in EPS for 2025, with a forecast of 138, but a modest increase to 141 in 2026 [7]. - Emerging markets are projected to have an EPS growth of 6% in 2025 and 10% in 2026, with a forecast of 84 and 92 respectively [7].

Market Overview - The market has shifted focus from trade tensions to earnings performance, with earnings continuing to reach new 12-month forward highs driven by AI capital expenditures [3][4] - Despite concerns about potential impacts from tariffs, overall earnings have not been significantly affected, allowing the market to maintain upward momentum [2][3] Valuation and Historical Context - Current valuations for major tech companies (excluding Tesla) average between 35 to 38 times forward earnings, which is significantly lower than the over 200 times seen in 1999 for companies like Cisco and Intel [5][6] - The market is not in a euphoric state similar to the late 1990s, suggesting that the current AI-driven growth may continue to support performance [6] Federal Reserve and Interest Rates - The probability of a rate cut in December is currently at 71%, down from 84%, indicating a cautious market sentiment despite some expectations for cuts [8][9] - Analysts suggest that while the market is pricing in rate cuts, there is a risk that the Fed may not deliver as expected, especially if labor market data does not indicate significant weakness [9][10][14] Economic Implications - The market's reliance on further rate cuts implies a belief that the labor market is weaker than suggested by current data, which could lead to aggressive valuations if growth estimates are too high [14][15] - A balanced approach to rate cuts is preferred, as excessive cuts could signal deeper economic issues, impacting market stability [14][15]

Welcome back to the exchange. We're a little more than 24 hours from the Fed decision, but 28 days into the government shutdown for the impact of that and the ongoing trade uncertainty, uh, all of that could have a future a fate or could impact the future of rate cuts. We turn to Steve Leeman with the results of the latest CNBC Fed survey. Steve, >> thanks Leslie. Yeah, responders to the October CNBC Fed Service. rate cut on the way from this meeting, the next meeting in December, and possibly one in Januar ...