Economic Data Summary - The ISM services PMI for September is reported at 50, marking the weakest reading since May of this year, which had a sub-50 reading of 49.9 [1] - The prices paid component is at 69.4%, slightly higher than the previous 69.2%, indicating inflationary pressures that are warmer than expected [2] - New orders came in at 50.4%, significantly missing expectations of around 54.5%, and down from the last reading of 56 [2] - Service employment is reported at 47.2%, the only reading below 50, but it is better than expected and sequentially higher than the previous 46.5% [3] - Interest rates have decreased, with the 10-year rate down nine basis points to 4.09% and the two-year rate also down nine basis points to 3.55% [4]

Housing Market Solutions - Deregulation at the local level is needed to solve the housing problem [1] - Increasing the housing supply is crucial [1] - Making all mortgages assumable is a proposed solution [1] - Lowering interest rates is suggested to improve the housing situation [1] Policy Recommendations - Bold decisions from leaders are necessary to solve the housing problem [1] - The housing situation can improve with the right actions [1]

Following the government shutdown, the Federal Reserve will be flying more blind than usual without key data. This could lead to a mistake in setting interest rates, cutting too much if the job market strong, too little if it's weaker than thought. But there are clues to watch on the state of the economy.One of them is the ADP's private payroll report. It came in surprisingly weak. Last month, the private sector shed 32,000 jobs, marking the biggest decrease since 2023.JP Morgan Mike Feroli says the continu ...

Core Insights - Car shoppers are facing significant affordability challenges in the new vehicle market despite a decrease in average down payments to the lowest level in four years [1][2] Down Payment Trends - The average down payment for new car purchases fell to $6,020 in Q3 2025, down from $6,433 in Q2 2025 and $6,619 in Q3 2024, marking the lowest level since Q4 2021 [2] - This trend indicates that buyers are putting less money down and financing more [4] Monthly Payment Challenges - The share of car buyers with monthly payments exceeding $1,000 remained high at 19.1% in Q3 2025, close to the previous quarter's record of 19.3% [3] - For used vehicles, monthly payments over $1,000 reached a record high of 6.1%, up from 5.6% in Q2 2025 [3] Financing and Loan Durations - More than 20% of car buyers financed their purchases with loans of seven years or more, with 22% of new car loans in Q3 2025 being 84 months or longer, slightly down from 22.4% in the previous quarter but up from 18.5% in Q3 2024 [9] - The average amount financed for new vehicle purchases increased to $42,647 in Q3 2025, up from $42,388 in Q2 2025 and $40,713 in Q3 2024 [10] Interest Rates - High interest rates continue to challenge buyers, with the average annual percentage rate (APR) at 7% in Q3 2025, marking the third consecutive quarter at or above this level [11]

It's been a busy morning of private economic data. Getting some more. Let's get to Rick Santelli.Hey, Rick. >> Yes, Carl. These are ISM manufacturing PMI September final reads.And we see sub 50 on the headline. 49.1% largely expected. 49.1% would be the lightest going back to well uh going back to March, March of this year when it was 49.Even if we look at prices paid and of course we'd rather have this go down and reflect less inflationary pressures comes in it's 61.9% sequentially lower than 63.7% would b ...

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: Job Market Overview - Private sector companies lost 32,000 jobs in June, which is below economists' expectations of a gain of 50,000 jobs [1] - The previous month's payrolls were revised down from a gain of 54,000 to a loss of 3,000 [1] - Despite strong economic growth in Q2, U.S. employers remain cautious with hiring [2] Group 2: Sector Performance - The education and health services sector gained 33,000 jobs, while leisure and hospitality lost 19,000 positions [3][5] - Other sectors such as natural resources and mining added 4,000 jobs, and information gained 3,000 [3] - Professional and business services lost 13,000 jobs, financial activities shed 9,000, and trade, transportation, and utilities lost 7,000 jobs [5][7] Group 3: Business Size Impact - Large businesses (500 or more employees) added 33,000 jobs, while businesses with 50 to 499 employees lost 20,000 jobs [9] - Establishments with fewer than 50 employees shed 40,000 jobs [9] Group 4: Wage Growth - Wage growth remained little changed, with pay for those staying in their roles climbing 4.5% year-over-year [9] - Pay gains for those remaining in their jobs slowed to 6.6% from 7.1% in August [9] Group 5: Economic Data Release Concerns - The ADP data is released prior to the Labor Department's nonfarm payrolls report, which is expected to show an increase of 50,000 positions [10] - Due to a partial government shutdown, the Labor Department will halt all economic data releases, including jobless claims and nonfarm payrolls data [10] - The Chicago Federal Reserve President indicated that alternate data sources will be considered for the October meeting if official data is not available [11]

Group 1: Inflation and Economic Conditions - The relationship between commodity markets and the Treasury bond market is crucial, with inflation being a key factor influencing this dynamic [1] - Real inflation is observed through everyday purchases rather than relying solely on government statistics, indicating a persistent inflationary environment in the US [1] - The rising price of gold reflects ongoing inflationary pressures in the economy [1] Group 2: Gold Market Dynamics - The US government shutdown has led to a surge in gold prices, with gold futures nearing $4,000 and cash Gold Index approaching $3,900 [2] - Central banks and global investors are flocking to gold as a safe-haven asset, driving its historic price increase [2] - The gold market is experiencing significant momentum, with no signs of a downturn in the near future [5] Group 3: Interest Rates and Federal Reserve Actions - The Federal Open Market Committee faces challenges due to inflation driven by trade policies, impacting consumer prices and employment costs [3] - A recent cut in the Fed fund rate by 25 basis points aims to address inflation and job market concerns, with expectations of steady rates in the upcoming meeting [3] - Potential demands for lower interest rates could lead to a decline in the US dollar index and a rise in commodity prices, excluding certain commodities like US soybeans [3] Group 4: Political Landscape and Market Implications - The consolidation of power in the US government has led to a perception of a loss of democratic leadership, affecting market confidence [4] - The Gold Index has seen a 42% increase since October 2024, reflecting investor sentiment amid political changes [4] - Historical patterns indicate that significant political events, such as presidential elections, can influence gold market trends [4]

Core Viewpoint - The utilities sector has become opportunistically cheap with strong growth potential and a significant price drop, suggesting that the Utilities Sector ETF (NYSEARCA:XLU) will outperform the broader market while providing defensive benefits in a weakening economy [1] Sector Performance - Utilities fell almost 5% last month despite a 30 basis point drop in interest rates, breaking the typical inverse relationship between utilities and yields [2][5] - Utilities are currently trading at a forward multiple of 18.1X, which is a substantial discount compared to the S&P 500's 30X trailing earnings and 22.1X forward multiple [9][11] Growth Potential - Utilities are forecasted to grow revenue by 6.4%, slightly above the S&P 500's 6.1%, and earnings growth is expected to be 16.6%, significantly outpacing the S&P 500's anticipated 11% growth [13][15][16] - Independent power producers (IPPs) are experiencing temporary growth rates of 70% due to a spike in auction energy prices, while regular electric utilities are growing at 15% [15] Valuation Mispricing - Utilities are undervalued relative to the broader market, with faster growth rates and lower multiples, which typically suggests higher risk; however, utilities are considered reliable businesses with consistent earnings growth [17][18] - The current discount of 4 turns on forward earnings multiple is unwarranted given the improved growth rate of utilities, which has surpassed that of the S&P 500 [25] Defensive Sector Outlook - The utilities sector is expected to benefit from anticipated interest rate cuts, with projections indicating a Fed Funds rate of 350-375 basis points after December [21] - A further decline in Treasury yields could redirect dividend investors' capital into the utility sector, enhancing its attractiveness [23] Investment Opportunities - The XLU ETF has significant holdings in IPPs, which may be overvalued; however, the sector overall remains cheap, with an average earnings multiple of 17.4 among tracked electric utilities [24][26] - Companies like Dominion (D), American Electric Power (AEP), and Pinnacle West (PNW) are highlighted for their strong fundamental positioning within the sector [27] Conclusion - The utilities sector presents a unique opportunity as it combines reliability, moderate growth, and value, making it an attractive investment option [28]

Core Insights - Small cap stocks, defined as companies with market values between approximately $300 million and $2 billion, are known for their potential to deliver significant gains but can also be volatile during uncertain times [1][2] Economic Conditions - Small caps tend to perform well during economic expansions, as they are more focused on domestic markets, making their success closely tied to local economic health [2] - The post-pandemic recovery in 2020 and 2021 saw a surge in U.S. small caps, which outperformed larger companies due to rebounding domestic demand [2] Labor Market Influence - A strong labor market positively impacts small cap performance, as lower unemployment rates lead to increased consumer spending, benefiting sectors like retail and hospitality where small caps are prevalent [3] Interest Rates - Small caps are more sensitive to interest rates, as they often rely on borrowing for growth. Low rates facilitate investment and hiring, while rising rates can hinder growth [4] - Predictability in interest rates from central banks boosts investor confidence, further benefiting small caps [4] Public Policy Impact - Government interventions such as tax incentives, deregulation, and fiscal stimulus can provide significant support to small businesses, enhancing their recovery and growth prospects [5] Valuation Dynamics - After periods of underperformance, small caps may appear undervalued compared to large caps, attracting value investors when fundamentals improve [6] Multi-Factor Catalysts - A small cap catch-up is typically driven by a combination of factors including economic growth, favorable monetary policy, strong labor markets, attractive valuations, and changing investor risk perceptions [7]