Michael Aron is chief investment strategist at State Street Investment Management. Mike, always appreciate having you on. You know, stocks may be due for whatever, but it doesn't mean they're going to do that, does it.It doesn't, Brian. The foundation for this bull market remains solid. So, trades coming into clearer focus.It's not perfect, but we've avoided the worst outcome. Now, we're throwing a little gasoline on the fire with both fiscal policy and monetary policy. Oh, and by the way, earnings are grow ...

Market Overview & Outlook - Equity market experienced a phenomenal recovery, with low stocks up 38% since Liberation Day [1] - A potential 5-10% correction is possible, considering the S&P's forward multiples at approximately 22 times earnings and the 10-year Treasury yields slightly above 4% [2] - The market is expected to see a rolling rotation, with profit-taking from the "Magnificent Seven" benefiting small-cap, value, and international stocks [3] Earnings & Revenue Performance - Second-quarter revenues increased by 6% year-over-year, and earnings increased by 12% year-over-year, both exceeding expectations [4] - Third-quarter revenues are projected to increase by approximately 6-7%, with earnings expected to show solid double-digit growth [4] - Federated Hermes is reevaluating and increasing its earnings estimates for the remainder of the current year and the following year [5] Economic Indicators & GDP - The U S GDP estimate for the next year is 28%, while the blue-chip consensus is 15% [6] International Markets - International stocks are considered attractive due to valuations being 40% cheaper than domestic stocks, compared to a typical discount of 20% [8] - The dividend yield on international stocks is approximately 29%, significantly higher than the S&P's 12% [8] - A weak dollar and accommodative foreign central banks are expected to facilitate stronger economic and earnings growth in international markets [9] - The company maintains an overweight position in international assets, viewing them as a favorable subcategory [10]

Manufacturing Sector - The manufacturing PMI for September is 49.8%, slightly above the expected 49.7% and up from the previous 49.4%[1] - Manufacturing production increased by 1.1 percentage points to 51.9%, while new orders rose by 0.2 percentage points to 49.7%[1] - The average changes in production and new orders from 2016 to 2024 (excluding 2020/2022) were +0.24 and +0.41 percentage points, respectively[1] Price Trends - Manufacturing prices fell for the second consecutive month, with the factory price index decreasing by 0.9 percentage points to 48.2%[2] - The raw material purchase price index saw a minor decline of 0.1 percentage points to 53.2%, remaining in the expansion zone[2] - Non-manufacturing prices in the construction and service sectors dropped by 1.6 and 1.3 percentage points to 48.1% and 47.2%, respectively[2] Economic Signals - There are positive signs as manufacturing enterprises increased procurement by 1.2 percentage points to 51.6%, the highest since April[3] - New export orders in manufacturing rose by 0.6 percentage points to 47.8%, marking the highest level since April[3] - The construction sector's business activity index slightly rebounded by 0.2 percentage points to 49.3%, but new orders remained low at 42.2%[4] Overall Economic Outlook - The composite PMI for September is 50.6%, a slight increase of 0.1 percentage points from August, indicating stable economic performance[5] - The average composite PMI for Q3 is 50.43%, consistent with Q2 and better than Q3 of the previous year[5] - Future monetary policy adjustments may depend on Q3 GDP growth, with a potential for easing if growth falls below 4.7%[5]

Labor Market & Economic Data - The August jobs report showed employers hired only 22,000 people, prompting the Federal Reserve to consider rate cuts [1] - A potential government shutdown could lead to a news and data blackout, impacting the release of key economic reports like the jobs report and the consumer price index [2] - The employment report is considered the single most important piece of economic information, influencing markets, stock trades, and Federal Reserve policy [4] - Ambiguous economic data creates uncertainty, making each new data point vital for investment and employment decisions [5] Political & Policy Impacts - Concerns are raised about the potential for political interference with economic data, particularly if it contradicts the administration's narrative [6][7] - Tariffs and mass deportations are highlighted as potentially inflationary policies, with scrutiny on whether they are receiving adequate criticism [9] - The impact of potential tariffs on foreign-made films is questioned, especially for an industry still recovering from the pandemic [12] - Tariffs are viewed as a tool for projecting strength rather than sound economic policy, potentially leading to retaliatory actions [14][15] Economic Sentiment & Midterm Elections - Economic anxiety is rising due to tariffs, labor market conditions, and interest rates, potentially impacting the upcoming midterm elections [16] - Affordability is a key concern for voters, potentially influencing their decisions regardless of political gerrymandering [17] - The resilience of the American economy is questioned in the face of disruptive policies, with uncertainty about the long-term effects [19] Legal & Financial Settlements - YouTube agreed to pay almost $25 million to settle a lawsuit related to the suspension of Trump's account, raising concerns about potential influence and future demands [20] - Settlements with the president are characterized as a form of "renting" rather than "buying," suggesting the possibility of further demands [21][22] GDP & Economic Claims - The White House reported a GDP growth of 38% in the most recent quarter [23] - A claim by the Commerce Secretary that Biden's economy never reached 3% GDP growth was fact-checked and found to be false [24]

Core Insights - The potential government shutdown poses a significant risk to the timely release of key economic data, particularly the jobs report, which could impact Federal Reserve decisions on interest rates [2][10]. Economic Impact of a Shutdown - A full government shutdown could result in approximately 800,000 federal employees being furloughed, similar to the 2013 shutdown [5]. - Deutsche Bank estimates that each week of shutdown could reduce quarterly GDP by 0.2% [6]. - The economic damage from a shutdown is typically short-lived, but there are concerns that this time could be different due to potential deeper cuts in the federal workforce [7][8]. Historical Context of S&P 500 During Shutdowns - Historically, the S&P 500 has shown negligible lasting impacts during government shutdowns, with an average return of 0% since 1976 [9]. - During the longest shutdown from late 2018 to early 2019, the S&P 500 actually increased by 10%, driven by a dovish shift from the Federal Reserve [9]. Federal Reserve Considerations - The Federal Reserve's ability to make informed decisions on interest rate cuts may be hindered by the lack of payroll and inflation data during a shutdown [10]. - Markets are currently pricing in a 89% probability of a Fed rate cut on October 29 [10]. Legislative Developments - House Republicans have proposed a seven-week funding extension, but it has not passed the Senate [12]. - Senate Democrats have attempted to push an alternative funding plan that includes significant healthcare spending, but it has also faced challenges [12][13].

RT Kaps (@0xKaps)What is MegaGDP? 🤔but first let’s understand GDPGDP = the total value of goods and services produced in a country. think of it as a scorecard for a country’s economic health.now in web3, we can borrow this idea for a blockchain.MegaGDP is basically:the total economic activity happening on the MegaETH chain.This includes things like- Trading volume on DEXs and- Lending & borrowing activity- MegaUSD- NFT mints & marketplace volume- Onchain apps & other stablecoins- any other onchain transacti ...

Stagflation Definition and Components - Stagflation is defined as a combination of weak or negative growth, high unemployment, and high inflation [1] - Economic growth is measured by GDP (Gross Domestic Product), which tracks what's made inside US borders [2] - Inflation is tracked using CPI (Consumer Price Index), representing a household shopping basket, and PCE (Personal Consumption Expenditures), a broader measure favored by the Federal Reserve [3][4] - Job market health is assessed via the unemployment rate and monthly payroll changes reported by the Bureau of Labor Statistics, with weekly unemployment claims offering higher-frequency insights [5] Historical Context and Current Assessment - The 1970s experienced significant stagflation with unemployment exceeding 7-8%, double-digit inflation, and contracting GDP [6] - The pandemic period saw a different pattern: initial COVID impact led to unemployment spikes and GDP decline, but without immediate price increases (stag without flation) [7] - In 2022, stimulus measures contributed to inflation exceeding 9%, while the economy contracted modestly and unemployment remained low [7] - Currently, unemployment is moderate, PCE is in the high 2% range, and GDP is relatively strong, not indicative of 1970s-style stagflation [8] Market and Economic Indicators to Watch - Precious metals, such as gold (up over 40% this year) and silver (approaching 60%), tend to perform well during periods of elevated inflation and Federal Reserve interest rate cuts [8] - Key data points to monitor include jobs data, CPI, PCE, and GDP, with particular attention to services inflation (shelter, insurance, healthcare costs) [9] - Energy prices and the strength of the US dollar are important factors, as an oil price surge or a weaker dollar could quickly reignite headline inflation [9][10] - Real incomes (workers' paychecks after inflation) should be monitored relative to demand; a decline in savings and increased credit card usage could signal potential issues [10][11]

Economic Commentary - BLS (Bureau of Labor Statistics) is perceived as masking economic pain rather than reporting reality [1] - GDP (Gross Domestic Product) as a primary metric atomizes humans into economic units, neglecting the standard of living and individual flourishing [1] - The share of young adults living with parents has reached levels not seen since the Great Depression [2]

Is it a bird? Is it a plane? No, it’s a flying taxi! @JNBPage and @sarah_wu_ examine China’s plan to “draw GDP from the sky”, on “Drum Tower” https://t.co/DpbIxVN5hq ...

Economic Overview - Year-over-year inflation is reported at 2.9%, which remains above the Federal Reserve's target rate, indicating ongoing inflationary pressures [1] - Recent economic data shows a decrease in the trade deficit and strong durable goods reports, leading forecasters to raise GDP estimates for the third quarter [2] Inflation Insights - Inflation is considered tame based on month-over-month data, although tariffs are expected to create a temporary increase in inflation [3][4] - The Federal Reserve is advised to look beyond tariff-induced price increases, as these do not reflect genuine demand in the economy [4] GDP Projections - The Atlanta Fed has increased its GDP estimate for the third quarter to the high 3% range, while Goldman Sachs projects mid-2% growth, indicating decent but not excessive growth [9] - The first half of the year saw GDP growth under 2%, with the first quarter being negative [9] Retail and Consumer Spending - The upcoming fourth quarter is critical for assessing the impact of tariffs on consumer spending, particularly during the holiday season when retail firms typically generate significant profits [10] Federal Reserve Actions - The Federal Reserve is expected to implement interest rate cuts, with a 25 basis point cut anticipated in the next two meetings [11][13] - Payroll growth has significantly decreased, with estimates for the upcoming employment report suggesting only 50,000 new jobs, compared to previous estimates of 150,000 to 300,000 [12]