Let's continue that conversation with Muhammad Ali and this morning chief economic adviser at Aliance who I'm sure has been listening in. Muhammad, happy Friday. It's good to see you.Do you think this wave of unleashed data can be definitive. >> No. Um, you have deep divisions and you heard Steve say that you're likely to get three descents if they don't cut, four to five descents if they do cut.These are deep divisions getting deeper. They're getting deeper for three good reasons and one awful reasons. The ...

Consumer Sentiment - The University of Michigan consumer sentiment survey indicates a decline in consumer expectations, with the index at 49, below the contractionary threshold of 50 [2][4] - Current conditions index is reported at 52.3, significantly lower than the expected 59.2, reflecting a deteriorating sentiment [3][4] - One-year inflation expectations have increased slightly to 4.7% from 4.6%, suggesting growing concerns about rising prices among consumers [3][4] Market Impact - The decline in consumer sentiment is contributing to market pressure, particularly in the technology and communication services sectors [5] - Despite the overall pessimism, individuals with substantial stock portfolios are feeling somewhat more optimistic, possibly influenced by the timing of the survey release before the upcoming election [5] Commodity Market - Mixed signals are observed in the commodity market, with oil prices showing a slight increase while industrial metals are experiencing a pullback due to concerns over China's export contraction [8][9] - The U.S. government has added critical minerals like uranium, silver, and copper to its list, which may positively impact U.S.-based mining companies [11][12] Geopolitical Factors - Hungary's Prime Minister Victor Orban is set to meet with former President Trump, with discussions likely to include energy deals, particularly regarding Russian oil and natural gas [14][15] - The geopolitical dynamics surrounding Hungary's energy imports could introduce risks to the market, especially in the context of the Russia-Ukraine conflict [16] Technical Analysis - The S&P 500 is testing its 50-day moving average, a critical support level that has not been broken since before the tariff tensions [18][21] - Increased put activity suggests a cautious market outlook, but a potential rebound could occur if support levels hold [20][21] Legislative Developments - Senator Thun is expected to vote on a package to reopen the government, which may influence market sentiment positively if concessions are made [22][23] - Airlines like United Airlines are seeing stock price recoveries, indicating potential market uplift from favorable news regarding government negotiations [23]

Financial Performance - Resideo Technologies reported adjusted earnings per share (EPS) of $0.89, exceeding the forecast of $0.69 [2] - The company's revenue for the third quarter was $1.86 billion, slightly below the expected $1.87 billion [2] - For the fourth quarter, Resideo guided revenue of $1.87 billion, which is lower than analysts' estimates of $1.92 billion [2] - Management lowered its full-year adjusted EPS guidance by 6.8% to $2.62 at the midpoint [2] Market Reaction - Shares of Resideo fell 23.6% in the morning session following the mixed financial results [1] - The significant stock price decline indicates that investors were more concerned about the revenue shortfall and weak guidance than the positive earnings surprise [2] - Resideo's shares have shown volatility, with 15 moves greater than 5% over the last year, highlighting the impact of this news on market perception [4] Economic Context - The political stalemate in Washington is causing delays in the release of crucial economic data, affecting investor confidence [5] - Chief Economist at Moody's Analytics warned that 22 states are showing signs of recession, indicating a precarious position for the broader U.S. economy [6] - Rising short-term inflation expectations and deteriorating labor market outlook from consumers are likely to impact discretionary spending [6]

Core Insights - Consumer confidence decreased in October, with the Conference Board Consumer Confidence Index falling to 94.6 from 95.6 in September, marking the lowest level since spring [1] - There is a notable divergence between current and future economic assessments, particularly across different income groups [1] Consumer Sentiment - The Present Situation Index increased by 1.8 points to 129.3, indicating a more positive appraisal of current business and labor conditions, while the Expectations Index dropped by 2.9 points to 71.5, remaining below the recession concern threshold for the eighth consecutive month [3] - Inflation expectations rose to 5.9% from 5.8% in September, with over half of consumers anticipating higher borrowing costs [4] Income Disparities - Lower-income households, particularly those earning below $75,000, showed sharper declines in confidence, contrasting with improved sentiment among those earning above $200,000 [6] - Labor Economy workers, earning $25 an hour or less, represent about one-third of the U.S. workforce and account for approximately $1.7 trillion in annual consumer spending [6] Economic Impact - A 1% wage change in the Labor Economy segment could impact GDP by about $17 billion, highlighting the sensitivity of consumer spending to wage fluctuations [7] - Confidence among lower-income groups deteriorates more rapidly with rising inflation expectations or stagnant wages [8] Demographic Variations - Economic pressures affect different demographic groups unevenly, with confidence improving among consumers aged 35 to 54, while declining for those younger than 35 and older than 55 [9] Holiday Spending Outlook - Early indicators suggest consumers plan to spend 3.9% less on gifts and 12% less on non-gift items during the holiday season, prioritizing promotions and value [12] - Despite optimism regarding current job and income conditions, persistent weakness in expectations indicates uncertainty as the holiday season approaches [12]

ECB Says Consumers’ Inflation Expectations Broadly Unchanged https://t.co/dDsvXYJlWy ...

CONCLUDED Stock Market News From Oct. 15, 2025: Dow Closes Flat Last Updated: 8 hours ago Two-Year Treasury Yield Rebounds From 2022 Low in Early Trade By Karishma Vanjani Short-term Treasuries were on a tumultuous path Wednesday morning, with yields moving higher after hitting a low not seen in three years. The 2-year yield settled at 3.477% on Tuesday, its lowest yield since Sept. 7, 2022, according to Dow Jones Market Data. It hovered around that level this morning, but it's now at 3.495%. The 2-year Tre ...

Core Viewpoint - The market is currently embracing a pro-growth agenda, with both the Federal Reserve and market participants showing a willingness to overlook previous concerns about inflation and risks, leading to a significant rally in equities and bonds [1][3][4]. Market Dynamics - The third quarter saw a remarkable performance compared to the second quarter, with the S&P 500 rallying approximately 8% amidst low volatility, indicating a strong market sentiment [5][9]. - Credit spreads are at post-global financial crisis all-time lows, suggesting a perceived lack of risk in the marketplace [3][4]. - The implied volatility of interest rates, as measured by the move index, has returned to levels seen in 2021, indicating a stable outlook for interest rates [4]. Bond Market Response - Contrary to expectations, long-dated bonds have rallied, allowing market participants to lean into growth despite concerns about inflation [1][4]. - The Treasury has effectively managed its issuance strategy, delaying new issuances during the government shutdown and focusing on shorter-term bills, which has contributed to the stability in the bond market [1]. Inflation Expectations - The market appears to be accepting a new normal for inflation expectations, with a consensus forming around a range of 2.5% to 3.5% for the foreseeable future, without causing significant disruption to economic growth [1][6]. Risk Assessment - The current market environment is characterized by extremely low correlation among S&P 500 constituents, with a realized correlation of zero, indicating that while the market is rising, individual stocks are moving independently, which may mask underlying risks [6][7]. - The low volatility observed in the market is reminiscent of the lowest volatility year in 2017, suggesting a calm before potential market disruptions [8][9].

Group 1: Dollar Index and Economic Indicators - The dollar index (DXY00) fell by -0.58% due to retreating T-note yields and dovish comments from Fed officials supporting interest rate cuts [1] - The ongoing US government shutdown, now in its second week, is bearish for the dollar, with potential negative impacts on the US economy [2] - The University of Michigan US October consumer sentiment index fell to a 5-month low of 55.0, while 1-year inflation expectations unexpectedly decreased to 4.6% [3] Group 2: Federal Reserve and Interest Rate Outlook - Fed Governor Christopher Waller indicated a weak labor market and openness to quarter-point interest rate cuts in upcoming FOMC meetings [3][4] - St. Louis Fed President Alberto Musalem expressed a willingness for further interest rate reductions to counteract labor market weakening [4] - Markets are pricing in a 97% chance of a -25 basis point rate cut at the next FOMC meeting on October 28-29 [4] Group 3: Euro and ECB Commentary - The EUR/USD rose by +0.39% due to dollar weakness and hawkish comments from ECB officials regarding the appropriateness of current interest rates [5] - ECB Governing Council member Nagel stated that the current monetary policy stance is appropriate, indicating a high threshold for changes [6] - Kazaks from the ECB noted that they are neutral on rates as inflation remains contained, affirming the appropriateness of the current 2% rate [6]

Economic Overview - The U.S. Treasury reported a $345 billion budget deficit in August 2025, marking the largest monthly deficit of the year and the second-worst August on record, up from a $291 billion deficit in July [1] - Government spending reached $689 billion for August, contributing to a total deficit of $1.97 trillion for the first 11 months of FY2025, which is on track to be the third-largest annual deficit in history [1] Mortgage Market Insights - Eris SOFR Swap futures provide mortgage lenders and servicers with tools to manage interest rate risk effectively, particularly for Mortgage Servicing Rights (MSR) holders [2] - The use of Eris SOFR allows lenders to hedge non-QM loans, enhancing execution and expanding delivery options as they transition away from Best Efforts [2] Compliance and Quality Control - The rise in Home Equity Lines of Credit (HELOCs) and Home Equity Loans (HELOANs) has increased the need for lenders and servicers to ensure compliance and quality control, especially for loans retained in portfolios [3] Government Program Updates - The FHA announced the adoption of the modernized Uniform Appraisal Dataset (UAD) 3.6, set to begin in early Spring 2026, aimed at improving collateral risk management [7] - FHA updated its Electronic Data Interchange (EDI) file layout for Mortgage Loan Default Status, adding nine new reporting elements while removing 24 fields related to Personally Identifiable Information [8] - FHA's Mortgagee Letter 2025-21 includes minor changes to facilitate servicing and loss mitigation requirements, aligning with the administration's priorities [9] - A new phishing-resistant multi-factor authentication system for FHA Connection is to be implemented by October 27, 2025, enhancing data security [10] Capital Markets and Interest Rates - The ongoing government shutdown has limited the release of key economic data, with Fed officials expressing caution regarding policy adjustments [13] - Mortgage rates fell for the first time in three weeks, with the 30-year and 15-year rates decreasing to 6.30% and 5.53%, respectively [14]

Group 1 - The article discusses the University of Michigan's Consumer Sentiment Index, which is a key indicator of consumer confidence in the economy [1][2] - Recent data shows fluctuations in consumer sentiment, reflecting changing economic conditions and consumer expectations [1][2] Group 2 - The report highlights the importance of consumer sentiment in predicting economic trends and potential market movements [1][2] - It emphasizes that higher consumer confidence typically correlates with increased consumer spending, which is vital for economic growth [1][2]