The loans underscore a major challenge facing policymakers as China’s economy slows: They can make funds cheaper and more abundant, but they can’t force people to borrow, spend or invest. https://t.co/o4zQgvPUlR ...

and vulnerable to pullbacks. Those pullbacks are a possible buying opportunity. Joining me now is Larry Adam, the chief investment officer over at Raymond James Financial.Larry, the interesting part about this question and segment here is juxtaposing against what's happening in Washington DC as we've done here. How exactly are the markets dealing with what's happening in Washington and still hovering at or near record highs. So taking both of those, the first one, when you look at what's happening with with ...

Economic Overview - The S&P 500 has increased over 70% since the launch of ChatGPT in November 2022, while job openings have decreased by approximately 30% [1][2] - Job openings peaked at 11.5 million in March 2022 and fell to 7.18 million by August 2025, while the S&P 500 rose from around 3,840 to nearly 6,700, marking a 74% gain [2] Monetary Policy Impact - The Federal Reserve began raising interest rates in March 2022 to combat inflation, leading to higher borrowing costs and reduced business investment, which subsequently affected hiring [3] - Construction and manufacturing sectors experienced the most significant declines in job openings, with construction openings dropping nearly 40% year over year by late 2024 [3] AI and Market Dynamics - AI-related stocks have significantly contributed to the market rally, with 75% of the S&P 500's gains since late 2022 attributed to AI-linked companies like Nvidia, Microsoft, and Alphabet, generating $5 trillion in household wealth [5] - The concentration of gains in AI sectors raises concerns about potential bubble risks, as noted by Morgan Stanley's Lisa Shalett [5] Labor Market Disparities - The effects of AI on the labor market are uneven, with early-career workers in AI-exposed fields experiencing a 13% employment drop, while software jobs are projected to grow nearly 18% by 2033 [6] - There appears to be a bifurcation in the economy, characterized by a thriving AI sector and a struggling broader economy [6] Additional Economic Factors - Trade and immigration policies have further constrained hiring, with estimates suggesting that immigration restrictions could reduce the U.S. workforce by 15 million over the next decade and cut annual GDP growth by one-third [4] - Concerns about a potential economic slowdown due to a prolonged government shutdown and rising national debt have been raised by industry leaders [7]

China’s factory activity slump worsened in October, reaching its longest decline in more than nine years as a deepening economic slowdown sets in during the final quarter https://t.co/WbuIUG5civ ...

Market Overview - The equity market is currently disregarding the government shutdown, potentially viewing it as a positive factor, while also signaling a slowdown in the economy [1][13] - Major indexes closed at record highs for the week ending October 24th, with significant gains observed in October [1][13] Economic Indicators - The Federal Reserve's Beige Book indicates only 18% of the economy is growing, a decline from 43% in August and 100% at the end of the previous year [5][13] - The Consumer Price Index (CPI) rose by 0.3% in September, slightly above the consensus estimate, bringing the year-over-year increase to 3.0% [6][15] - Core CPI, which excludes food and energy, increased by 0.2%, also resulting in a 3.0% rise over the past year [6][15] Housing Market - Existing home sales increased by 4.1% in September compared to the previous year, but the annual rate remains significantly below pre-COVID levels [11][12] - The current level of existing home sales is nearly 40% lower than the cycle peak, approaching the worst levels seen during the Great Recession [12][14] - Median home prices have stagnated since Spring 2024, with expectations of home price deflation in the coming quarters due to rising inventory [12][14] Consumer Behavior - Consumer spending rose by 2.7% from April to August, despite a 1.2% decline in personal income during the same period, indicating reliance on savings drawdown [9][16] - Rising delinquencies in credit card and auto loans are early indicators of consumer distress, with mortgage delinquencies now exceeding levels seen during the COVID era [10][16] Future Outlook - The Federal Reserve is expected to lower interest rates, with a potential 25-basis point reduction anticipated at the upcoming meeting [8] - The economic outlook remains cautious, with expectations of continued weakness in economic data influencing future monetary policy [8][16]

Industry Overview - The Zacks Transportation sector is facing challenges due to increased expenses, inflation-driven high interest rates, a decline in freight demand, and supply-chain issues [1][2] - Geopolitical uncertainties and tariff-related economic tensions are negatively impacting consumer sentiment and growth expectations [1] Economic Factors - Inflation concerns and risks of an economic slowdown are likely to increase market volatility [2] - Supply-chain disruptions are expected to keep costs elevated in the near future [2] Oil Prices Impact - A decrease in oil prices by 4.2% during the July-September 2025 period is anticipated to positively affect the profitability of transportation companies, as fuel costs are a major expense [3] Company Earnings Expectations - Investors are awaiting earnings results from Southwest Airlines Co. (LUV), Union Pacific Corporation (UNP), American Airlines Group Inc. (AAL), and Norfolk Southern Corporation (NSC), all scheduled for release this week [4] Southwest Airlines (LUV) - LUV is expected to report a 1.3% increase in passenger revenues compared to the third quarter of 2024 [6] - The Zacks Consensus Estimate for LUV's third-quarter 2025 revenues is $6.97 billion, reflecting a 1.44% year-over-year growth [7] - LUV's earnings estimate has been revised upward by over 100% in the past 60 days to 1 cent per share, but this represents a 93.33% decline from the previous year's actual [7][8] Union Pacific Corporation (UNP) - The Zacks Consensus Estimate for UNP's third-quarter 2025 revenues is $6.23 billion, indicating a 2.34% increase year-over-year [9] - Freight revenues are estimated at $5.86 billion, a 1.7% increase from the previous year, while other revenues are expected to decline by 3.6% [9] - The earnings estimate for UNP is $2.99 per share, reflecting an 8.73% increase from the year-ago actual [10][11] American Airlines Group Inc. (AAL) - AAL's loss estimate for the third quarter has widened to 27 cents per share, compared to a profit of 30 cents in the same quarter last year [12] - The Zacks Consensus Estimate for AAL's revenues is $13.63 billion, indicating a slight decline of 0.13% year-over-year [13] - AAL's earnings prediction does not suggest a likely earnings beat, with an Earnings ESP of -0.68% and a Zacks Rank of 3 [14] Norfolk Southern Corporation (NSC) - The earnings estimate for NSC has been revised downward by 4.50% to $3.18 per share, indicating a 2.15% decline from the previous year [15] - The revenue estimate for NSC is $3.09 billion, reflecting a 1.26% year-over-year growth [15] - E-commerce demand is expected to support shipment volumes, but challenges such as inflation, high interest rates, and weak freight demand may negatively impact performance [16][17]

Economic Overview - China's economy is facing deep structural challenges, including fading growth drivers, a prolonged property downturn, and entrenched deflation, contrasting with the temporary pandemic shocks experienced previously [1] - The upcoming fourth plenum in Beijing will provide insights into the government's priorities for the 2026-2030 period, with a focus on rebalancing the economy towards domestic consumption [1] Foreign Investment and Trade - Inbound foreign direct investment in China has decreased by nearly 13% in the first eight months, indicating a potential third consecutive year of decline [2] - Despite the decline in foreign investment, the goods trade balance has reached a record $875 billion this year, highlighting strong foreign demand [2] Investment and Industrial Activity - Fixed-asset investment is projected to remain unchanged year-on-year in the first nine months, continuing a downward trend since May, despite increased government borrowing aimed at supporting local authorities [3] - Public spending on infrastructure has not compensated for the decline in housing investment and a slowdown in manufacturing investment [3] Retail and Industrial Output - Retail sales are expected to grow by 3% in September, while industrial output is forecasted to increase by 5%, marking the weakest performance for both metrics this year [4] GDP Growth and Economic Outlook - China's GDP is estimated to have risen by 4.7% in the third quarter, down from 5.2% in the previous quarter, reflecting a slowdown in economic momentum [5][6] - The IMF predicts a growth rate of 4.8% for China in 2025, with a further slowdown to 4.2% expected next year, citing weak prospects and ongoing real estate investment shrinkage [6]

Core Viewpoint - The Federal Reserve is expected to decrease interest rates more swiftly than previously planned to combat a slowing economy [1] Group 1: Economic Outlook - Federal Reserve Chairman Jerome Powell has emphasized the increasing risks of an economic slowdown in the U.S. [1]

Market Overview - Markets are exhibiting defensive behavior, potentially due to a slowing economy and government shutdown [1] Trading Ideas & Strategies - Suggests a trade idea within the health care sector [1] - Recommends rolling a prior successful trade into a new opportunity [1] - Emphasizes the significant risk associated with options trading, advising it may not suit all investors [1] - Highlights that certain complex options strategies carry additional risk [1] Resources & Engagement - Directs readers to the Options Disclosure Document for understanding risks [1] - Promotes "In the Money" educational resources on Fidelity's website [1] - Invites participation in weekly trade idea discussions on Fridays at 1:30 pm ET [1] - Encourages signing up for tips and insights from the team [1] - Provides links to Fidelity's social media presence across various platforms [1]

Market Trends & Industry Dynamics - Aegon Asset Management predicts more highly-indebted companies will face distress due to the slowing US economy [1] - Earnings are expected to suffer as the US economy slows [1]