Federal Reserve Policy & Economic Uncertainty - The market perceives the Federal Reserve (Fed) as divided and cautious due to uncertainties surrounding inflation, labor market, government shutdown, and tariffs [1][2] - The Fed's debate needs resolution, which is a key focus for markets [3] - The Fed faces challenges in justifying policy moves without reliable economic data, especially given its data-dependent stance [5][6] - The Fed is considering a pause in policy adjustments due to data limitations caused by events like government shutdowns [5][6] - The Fed is aware of the debate surrounding the concentration of GDP growth in the AI sector but considers overall growth from consumers [12][13] - The Fed acknowledges the AI sector's contribution to GDP growth but questions its sustainability, which is unlikely to drive major decisions at this stage [14] Data & Economic Indicators - The Fed can use alternative data sources like state data and private sector indices to compensate for missing official economic reports [5][9] - Bank of America research indicates credit card spending is up over 2% for the week ending October 4th [8] - Earnings reports from companies like Delta Airlines and PepsiCo can provide insights into inflation and consumer spending [9] - Private sector economic reports may also be affected by the lack of incoming government data [9] - Atlanta Fed GDPNow tool estimates GDP growth at 38% [11]

Hundreds of thousands of federal workers have received their final full paychecks until the end of the government shutdown which began on October 1st. Despite the current Democrat induced shutdown, we will get our service members every last penny. Don't worry about it.How things play out from here, that depends on how a federal worker is categorized. Here's the breakdown. We have furled, exempt, and accepted employees.Furoughed employees that includes say economists at the Bureau of Labor Statistics or grou ...

[Applause] [Music] giant skeletons, >> cardboard boxes, and makeup. All of these things can be used as quirky recession indicators. Let me explain.When we think of recession signals, we think of GDP drops, consumer spending, and unemployment rates. But lately, economists and analysts have been looking at much more unconventional signals. For example, if people are spending big on Halloween decorations early, that means there's a lot of confidence in the market.If demand goes down, that means that consumer s ...

Let's bring in Wilmington Trust Megan Shu. Megan, good to talk to you. It seems as though investors are just really shrugging off any impact from the government shutdown here.>> Yeah, Contessa, I think that's right. And it jives with what we've seen historically. Uh historically, shutdowns don't have a material economic impact, especially if they stay short enough in duration.you tend to get uh basically a a tenth to two tenths per week for every week that the government shut down, but then you get that mad ...

Joining us right now is Gabriella Santos. She is chief market strategist for the Americas at JP Morgan Asset Management. And uh Gabriella, why don't we just start with yesterday's new highs despite the government shutdown. We know that government shutdowns often don't uh affect the markets.In fact, you tend to see the markets trade up. Um but what what is happening. Is this a case where we're looking at this thinking this will be resolved quickly.Thinking it doesn't matter. what you're seeing from spending ...

But let's begin here. The markets and your money higher to begin the month. Happy October, by the way.So, what are some of the key issues to watch as we just kind of slide into the fourth quarter. Kate Morris is here. She is City Wealth's chief investment officer.Kate, it's great to have you on set. We're starting the fourth quarter. Markets have been hot this year.Don't seem to care about a looming government shutdown. Why not. >> Well, because it doesn't tend to last very long, right.We've had like 15 gov ...

Core Insights - Conagra Brands Inc. shares increased by approximately 2% following the release of first-quarter fiscal 2026 results that surpassed earnings expectations despite inflationary pressures and cautious consumer spending [1] Financial Performance - The company reported adjusted earnings of $0.39 per share for the quarter ending August 24, exceeding the analyst consensus of $0.33 [2] - Revenue for the quarter was $2.63 billion, slightly above estimates of $2.62 billion, but down 5.8% compared to the previous year; organic net sales decreased by 0.6% [2] Future Outlook - Conagra reaffirmed its fiscal 2026 outlook, projecting organic net sales growth between -1% and +1%, adjusted operating margin of 11.0% to 11.5%, and adjusted EPS between $1.70 and $1.85, aligning with the analyst consensus of $1.78 [3]

Valuation Metrics - Shiller's CAPE is currently at 40x, the highest level since the dot-com bubble, indicating a potentially expensive market [4] - Trailing P/E stands at about 28x, significantly above historical averages, calculated using earnings from the past 12 months [5] - Forward P/E is approximately 22x, also above historical averages, based on expected earnings over the next 12 months [6] - All valuation metrics suggest that the stock market is expensive, implying weak returns in the future [7] Historical Context - In mid-2014, Shiller's CAPE was about 26x, above its long-term average of 17x, suggesting the market was expensive [8] - The realized CAPE at that time was about 17x, indicating the market was not expensive due to healthy earnings growth in subsequent years [9] Macroeconomic Developments - Inflation is rising, with the core PCE price index up 2.9% year-over-year, above the Federal Reserve's 2% target [13] - Consumer spending increased by 0.3% month-over-month in August, reaching a record annual rate of $21.11 trillion [14] - Business investment activity improved, with core capex orders rising 0.6% to $76.7 billion in August [15] - Initial unemployment claims fell to 218,000, indicating a historically strong labor market [16] Housing Market Insights - Sales of previously owned homes decreased by 0.2% in August, while new home sales surged 20.5% to an annualized rate of 800,000 units [19][20] - The median existing-home sales price rose 2.0% year-over-year, marking the 26th consecutive month of price increases [20] Economic Outlook - The long-term outlook for the stock market remains favorable, supported by expectations for years of earnings growth [23] - Demand for goods and services remains positive, bolstered by healthy consumer and business balance sheets [24] - Economic growth is normalizing, with major tailwinds like excess job openings fading [25] - There is a disconnect between hard economic data and soft sentiment-oriented data, with tangible activity continuing to grow [26] Market Dynamics - The U.S. stock market may outperform the economy in the near term due to positive operating leverage from companies adjusting cost structures [27] - Risks such as political uncertainty, geopolitical turmoil, and energy price volatility remain present [28]

Economic Measurement & Policy - Economic health is measured by consumer spending [1] - The Federal Reserve (the Fed) aims to ensure prices increase continuously [1] - The Fed is concerned that declines in house prices could accelerate [1] Keynesian Economics - The content reflects Keynesian economics in its most distilled form [1]

Economic Impact of Potential Shutdown - A short government shutdown (one to two weeks) is unlikely to have a significant macroeconomic or market impact [1] - A data blackout caused by a shutdown would be particularly problematic given the current inflection point in the labor market and the Fed's upcoming interest rate decision [3] - If the shutdown lasts longer than two weeks, it could become a real problem and investors will likely take notice [4] Labor Market Conditions - The labor market is currently weak, with little to no job growth in recent months [3][4] - Businesses have pulled back on hiring, reduced hours, and cut back on temporary jobs, but layoffs remain low [5] - The expectation is for a flat job market, and revisions may show a net loss of jobs [6] Consumer Spending and GDP - Second quarter GDP growth was 380% (原文应为3.8%，此处为笔误) and August personal spending was 6%, both better than expected [7] - Strong consumer spending is attributed to the wealth effect from the stock market, primarily benefiting high-income households [8] - The saving rate has declined, indicating that high-income consumers are spending more aggressively [9] Economic Vulnerabilities - The economy is vulnerable because almost half of all spending is done by the top 10% of the income distribution (making over approximately $275,000-$300,000 per year) [12][13] - If the stock market declines and people start seeing losses, the saving rate could increase, potentially leading to a recession given the lack of job growth [15] - Disturbing data on average FICO scores and collapses in auto subprime financing indicate potential pain for the lower income cohort [11]