Market Performance - Financial markets reached new all-time highs despite the Federal Government shutdown, with the S&P 500, DJIA, and Russell 2000 closing at record highs on October 3rd, and the Nasdaq achieving a record high on October 2nd [1] - Weekly gains for the four major indexes ranged between 1% and 2%, with year-to-date advances showing double-digit growth for the S&P 500, Nasdaq, and Russell 2000, while the DJIA is close at 9.91% [1] Economic Indicators - The current government shutdown has occurred amidst signs of an economic slowdown, with rising delinquencies in credit card, auto loans, and mortgages [6][11] - The Pending Home Sales index dropped to 74.7 in September, lower than the first month of both the 2001 and 2008 recessions [7] - The Conference Board's Leading Economic Indicators have declined for 17 consecutive months, indicating a weakening labor market [8] Labor Market Trends - The ADP monthly jobs report showed a net loss of 32,000 jobs in September, significantly missing the market consensus of a gain of 51,000 jobs [7] - The Job Openings and Labor Turnover Survey indicates a continued decline in job openings, approaching levels seen during the 2020-2021 labor market softness [7] - The Conference Board's Consumer Confidence Index fell to 94.2 in September from 97.8 in August, indicating a significant drop in consumer sentiment [8] Federal Reserve Outlook - The government shutdown has delayed the release of key economic data, complicating the Federal Reserve's decision-making process [9] - A 25-basis point rate reduction is anticipated in the upcoming Federal Open Market Committee meetings, with the possibility of a steeper reduction if economic conditions worsen [9][12] - The Fed is expected to respond to the deteriorating economic indicators by lowering interest rates over the next few months [12]

A slump in demand for cardboard packaging is ringing alarm bells across the United States. Far more than just a shipping material, corrugated cardboard is a barometer of consumer activity and industrial health. When fewer boxes are being made and shipped, it usually signals that households are spending less, businesses are pulling back, and economic momentum is slowing. Cardboard boxes as an economic indicator Cardboard boxes may seem ordinary, but they move almost everything in the modern economy—fro ...

Core Insights - The stock market is reaching record highs, indicating a potential disconnect from the underlying economic slowdown [1] - There is speculation that the market may be responding to factors not reflected in the current economic data [1] Market Performance - The stock market's performance suggests resilience despite signs of economic weakness [1] - Record highs may imply investor confidence or a misinterpretation of economic indicators [1]

Labor Market Trends & Disparities - US economy faced rising prices and a slowdown in hiring, partly due to tariffs [1] - Black Americans experienced a faster increase in unemployment, reaching 75% [2] - Black women's joblessness saw the sharpest spike, with 36000 jobs lost since February [3][4] - The unemployment rate for black women jumped from 54% in January to 67% [26][27] Impact of Policy & Budget Cuts - Massive cuts to the federal workforce are seen as a driving factor behind job losses for black women [4] - Agencies with a larger share of black women employees, like the Department of Education (28% black women), faced significant staff cuts (nearly 46%) [6] - Agencies with largely white staff saw smaller cuts [7] - Diversity, equity, and inclusion (DEI) officers, where black women are heavily represented, are being pushed out due to political pressure [7][8] Economic Consequences & Broader Implications - Job losses among black women are projected to strip around $37 billion from the US economy [4] - A sharp jump in black women's joblessness may foreshadow an impending slowdown for other groups [9] - The loss of jobs for 319000 black women from February to July is largely due to federal purges [15] - The economy suffers when parts of it experience wage, income, and employment decline [24]

Group 1 - Robinhood Markets Inc shares are experiencing a decline due to a broader sell-off in banking and financial services stocks, triggered by a weak August jobs report [1][3] - The U.S. economy added only 22,000 nonfarm payrolls in August, significantly below expectations and marking the slowest hiring pace since 2020, with downward revisions for June and July indicating a cooling labor market [2][3] - The poor jobs data has led to increased expectations for Federal Reserve interest rate cuts, but concerns about a slowing economy potentially reducing trading activity are negatively impacting sentiment for brokerage platforms like Robinhood [3] Group 2 - Despite the decline in share price, Robinhood has a high momentum score of 98.61 according to Benzinga Edge rankings [4] - As of Friday afternoon, Robinhood shares are trading down 2.07% to $100.78, with a 52-week high of $117.70 and a low of $18.71 [4]

Economic Overview - The U.S. economy faced significant volatility with mixed signals, as major indexes like the S&P 500 and Dow Jones increased by 0.28% and 1.60%, while the Nasdaq Composite decreased by 0.62% [1] - The Federal Reserve Chair Jerome Powell suggested the possibility of an interest rate cut as early as September during the Jackson Hole symposium [1] Labor Market Concerns - A slowing labor market is a primary concern for the Federal Reserve, with recent data showing a downward revision of job growth in May and June, and only 73,000 jobs added in July [2] - Despite strong Q2 GDP numbers, labor market and manufacturing data indicate a potential economic slowdown, presenting a dilemma for the Fed between supporting the job market and combating inflation [2] Zacks Research Performance - WisdomTree, Inc. shares increased by 28% since being upgraded to Zacks Rank 2 (Buy) on June 23, outperforming the S&P 500's 8.7% gain [4] - Hafnia Limited shares rose by 14.1% after a Zacks Rank 2 upgrade on June 25, also surpassing the S&P 500's 6.4% increase [5] - A hypothetical portfolio of Zacks Rank 1 stocks returned +20.65% in 2023, compared to +24.83% for the S&P 500 index [6] Focus List and Model Portfolios - The Zacks Focus List portfolio returned +10.91% in 2025 (through July 31) compared to +8.59% for the S&P 500 index [12] - The Top 10 portfolio has delivered a cumulative return of +2,220.4% since 2012, significantly outperforming the S&P 500 index's +517.8% return [24] Sector-Specific Performance - Johnson & Johnson and The Hershey Company, part of the Earnings Certain Dividend Portfolio, returned 17.2% and 16.8% respectively over the past 12 weeks, driven by investor interest in quality dividend stocks amid market volatility [19] - Mettler-Toledo International Inc. and PepsiCo, part of the Earnings Certain Admiral Portfolio, saw returns of 18.6% and 15.7% over the past 12 weeks [15]

Let's talk about this FX market driven in the first half of this year by perceived capital flows. Do you believe that in the second half of this year it will be driven by rate differentials and why. I write differentials up to a point.Expectations about growth which are which are often the same thing. But but yes, I think that people are genuinely uncertain in the sense of at the moment they're uncertain, but aware of the fact that the world is very long because we've all put so much money into the US equit ...

Financial Data and Key Metrics Changes - For Q1 2026, the company reported adjusted net investment income (NII) of $0.24 per share, down from $0.26 per share in the prior quarter [6][15] - Total investment income decreased to $23.5 million from $27.5 million in the previous quarter, primarily due to the absence of a one-time success fee and dividend income [13] - Net investment income for the quarter was $9.1 million compared to $7.2 million in the prior quarter [15] - The net asset value (NAV) decreased to $12.99 per share from $13.55 per share, influenced by distributions to shareholders and unrealized depreciation [16][17] Business Line Data and Key Metrics Changes - The company invested approximately $130 million in three new portfolio companies during the first quarter, compared to $221 million for the entire fiscal year 2025 [7] - The portfolio currently consists of 28 operating businesses, with a total investment of about $2.1 billion across 64 buyout portfolio companies since inception [9] Market Data and Key Metrics Changes - The company noted a competitive environment in the M&A market, with liquidity present but valuations remaining challenging [10] - Some consumer-focused portfolio companies have shown good results, although there are concerns regarding supply chain disruptions and tariff impacts on margins [11] Company Strategy and Development Direction - The company aims to grow its portfolio through acquisitions at attractive valuations, utilizing a combination of equity and debt investments [7] - The strategy includes generating capital gains and maintaining monthly distributions to shareholders, with a focus on liquidity and flexibility to support portfolio growth [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about new buyout activity for the remainder of the fiscal year, despite uncertainties in the economic landscape [10] - The company is cautious about potential impacts from tariffs and supply chain issues but remains confident in the overall health of its portfolio [11] Other Important Information - The company maintained a monthly distribution of $0.08 per share, with a supplemental distribution of $0.54 per share paid in June [8][18] - The asset coverage ratio stood at 189%, providing a cushion above the required 150% coverage ratio [18] Q&A Session Summary Question: Is the recent acquisition pace indicative of better deal flow? - Management indicated that while the M&A market is competitive, they are seeing good quality deal flow and are actively pursuing acquisitions [23][24] Question: Are there signs of weakening performance across portfolio companies? - Management noted that while there is caution, overall activity levels remain stable, with some consumer companies even experiencing increased activity despite tariff impacts [26][27] Question: What is the current level of undistributed taxable income (UTI)? - Management confirmed comfort with the current UTI level and continues to monitor it on a quarterly basis [28][29] Question: Can you provide insights on Diligent Delivery Systems? - Management stated they are continuing to manage the investment and are working on restructuring, with no immediate dramatic changes planned [34][35] Question: What drove the increase in yield on interest-bearing investments? - The yield increase was primarily due to the collection of past due interest, with the underlying yield remaining consistent with previous quarters [40][41] Question: Are there changes in deal structures among competitors? - Management indicated that while competition exists, their unique strategy allows them to maintain strong underwriting standards without significant changes in structure [44][45]

Political & Economic Analysis - The new bill is perceived as a reverse Robin Hood budget, transferring wealth from the poor to the rich [1][2] - Soft stagflation is anticipated, with rising inflation and a potentially softening labor market due to an economic slowdown [4] - Public opinion, even according to Fox News polls, is largely against the bill by 20 points, even before its effects are felt [7] - Democrats have an opportunity to capitalize on the bill's unpopularity and the Republican party's perceived lack of fiscal responsibility [8][10] - Economic populism is suggested as a counter-narrative to cultural populism, using the bill as an example [10] Midterm Elections & Political Strategy - The White House acknowledges potential blowback in the midterm elections, historically challenging for a president's first term [12][13] - The administration aims to fulfill campaign promises, including tax cuts, despite midterm election concerns [11][12] - Democrats are considering making JD Vance the face of the bill, particularly looking ahead to the 2028 presidential election, though focusing on Donald Trump and the Republican party as a whole may be more effective in the midterms [14][15][16] - The Republican party may struggle to credibly advocate for fiscal responsibility after Donald Trump's first term, during which the debt increased [8] - A past attempt to privatize social security under George Bush is cited as a cautionary tale of pursuing unpopular policies [17][18]

Core Viewpoint - Caterpillar reported weaker-than-expected first-quarter results and lowered its full-year guidance, but the market had anticipated this, limiting the downside post-announcement [1][5] Financial Performance - The company earned $4.25 per share on revenue of $14.25 billion, missing Wall Street's consensus estimates of $4.35 per share and $14.6 billion in sales [3] - Sales declined by 10% year-over-year, with construction equipment sales down 19% from the previous year [3][4] - Caterpillar warned that margins could be at the lower end of the previous 16% to 20% range for 2025 due to rising costs [3] Market Conditions - The decline in sales was attributed to weaker dealer restocking trends and pricing pressures [4] - Economic uncertainty is expected to hinder the recovery of Caterpillar's business and stock performance in the near term [7] Company Resilience - Despite the challenges, Caterpillar's scale and strong balance sheet provide a cushion, with the company generating $1.3 billion in operating cash flow during the quarter [6] - The company returned $4.3 billion to shareholders through share repurchases and dividends, indicating a commitment to returning value to investors [6]