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What Caused the Government Shutdown (And Why That’s Important to Markets)

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What’s in Today’s Report:

  • What Caused the Government Shutdown (And Why That’s Important to Markets)

Futures are slightly lower despite strong CSCO earnings and the government officially reopening.

CSCO posted solid results and the stock is up 6% pre-market but the recent AI skepticism remains in place and the earnings aren’t keying a broader rally.

Politically, the government shutdown officially ended, removing what was an increasing economic headwind.

There are no economic reports today (now that the government is reopened, we will await a new schedule of backlogged releases) but there are several Fed speakers:  Daly (8:00 a.m. ET), Kashkari (10:30 a.m. ET), Musalem (12:15 p.m. ET) and Hammack (12:20 p.m. ET).  If their commentary further pushes back on expectations for a December rate cut, that will pressure stocks.

 

Why Stocks Dropped Yesterday

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What’s in Today’s Report:

  • Why Stocks Dropped Yesterday

Futures are weaker this morning but off session lows as investors digest underwhelming earnings from AI-sensitive SMCI and AMD ahead of key economic data today.

Economically, the Eurozone’s Final Composite PMI firmed to 52.5 vs. (E) 52.2 in October from 51.2 in September which is helping to ease concerns about a global economic slowdown.

Today, focus will be on economic data early with the ADP Employment Report (E: 28K), Flash Composite PMI (E: 54.8), and ISM Services PMI (E: 51.0) all due to be released by 10:00 a.m. ET.

There are no Fed officials scheduled to speak today but there is a 4-Week Treasury Bill auction at 11:30 a.m. ET that could shed light on investor expectations for a December rate cut.

Earnings season continues as well today with notable companies reporting including: NVO ($0.77), MCD ($3.35), HUM ($2.91), HOOD ($0.51), APP ($2.37), IONQ ($-0.44), and QCOM ($2.33).

 

New Sevens Report Special Report Coming Next Wednesday: How Bad Is the U.S. Debt Situation?

We’re continuing our Sevens Report Special Report series, and in the latest release, we’ll be taking an in-depth look at one of the most important, and popular, topics among investors: The U.S. debt situation.

We’ve all heard the warnings: The U.S. debt situation is unsustainable and a long-term threat to the markets and the economy. Well, your clients and prospects have heard these warnings too, so we wanted to produce an in-depth special report that takes an independent, fact-based look at the U.S. debt situation.

In this Sevens Report Special Report we: 1) Take a comprehensive look at the U.S. $37.4 trillion debt burden, 2) Explore historical comparisons to rising and declining empires, 3) Examine the implications of the looming $9.2 trillion “maturity wall” and 4) Evaluate threats to dollar dominance.

Like previous Sevens Report Special Reports, this report will both be branded as Sevens Report Research and as a “white labeled” version, allowing you to brand this robust and in-depth report as your own using your firm’s logo and other marketing materials. Both versions are included with a purchase.

Bottom line, the U.S. debt situation will be a major long-term influence on markets and investor portfolios, and the level of interest in U.S. debt, especially among more sophisticated investors, is high.

This special report can not only help explain the situation and put it in proper context, but also differentiate you from the competition by showing you’re focused on both the near-term and long-term risks to clients’ wealth. Please email info@sevensreport.com to learn more or to pre-order this special report.

 

Updated Market Outlook (Post Earnings, Trade Truce and Fed Decision)

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What’s in Today’s Report:

  • Updated Market Outlook (Post Earnings, Trade Truce and Fed Decision)
  • Weekly Market Preview:  Will the Shutdown End This Week? (If Not, Possible Market Headwind)
  • Weekly Economic Cheat Sheet:  ISM PMIs and ADP Are Important This Week

Futures are solidly higher mostly on momentum following a generally quiet weekend of news.

There was no disruptive news over the weekend so investors focused on the results of last week:  1) Continued AI Enthusiasm, 2) Trade truce and 3) Fed rate cut/end of QT.

Economically, EU and UK manufacturing PMIs met expectations (50 and 49.7 respectively).

Today we do get some potentially important economic data via the ISM Manufacturing PMI (E: 49.4) and markets will want to see stability (so not falling too far from 50).  On the Fed front, there are two speakers today, Daly (12:00 p.m. ET) and Cook (2:00 p.m. ET) and the more dovish their commentary, the better for markets (given recent uncertainty around a December rate cut).

Finally, on the earnings front, ON ($0.59), PLTR ($0.12) and two moderately important AI linked tech companies, so markets will want to see solid results from both.

 

Five Concerning Market Breadth Developments

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What’s in Today’s Report:

  • Five Concerning Market Breadth Developments

Futures are modestly higher thanks to better than expected tech earnings.

APPL and AMZN both beat estimates and the stocks are rallying 2% and 12% respectively pre-market and pushing futures higher.

Economically, Chinese PMIs were mixed as the manufacturing PMI slightly missed estimates (49 vs. (E) 49.6).

There are no economic reports today but there are two Fed speakers, Logan (9:30 a.m. ET) and Bostic (12:00 p.m. ET) and given Powell’s hawkish surprise earlier in the week, markets will want to hear a dovish tone from both.

On earnings, the heart of the season is now over but there are still some notable reports today including: XOM ($1.78), CVX ($1.66) and ABBV ($1.77).

Finally, with President Trump back in the U.S., focus will shift to the government shutdown and any chatter about a resolution will be a mild market positive.

 

Fed Day

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What’s in Today’s Report:

  • Abbreviated FOMC Preview
  • Housing Data Takeaways

Futures are trading at all-time highs ahead of the Fed decision and multiple Mag-7 earnings releases due out after the close as President Trump made optimistic remarks about his three-hour meeting with President Xi tomorrow.

Economically, Australian CPI jumped to 3.2% vs. (E) 3.0%, up 1.1% from Q2’s reading of 2.1%.

Today, there are a few “second-tiered” economic reports due to be released including International Trade in Goods (E: $-90.0B), Wholesale inventories (E: -0.2%), and Pending Home Sales (E: 1.0%) but their market impact should be limited given the looming Fed decision.

It’s Fed Day with the FOMC Meeting Announcement due to hit the wires at 2:00 p.m. ET followed by Fed Chair Powell’s Press Conference at 2:30 p.m. ET.

Aside from the Fed decision, which could have a material impact on markets today despite the looming Trump-Xi meeting tomorrow, we are getting into peak earnings season with quarterly results due from major U.S. companies including VZ ($1.19), BA (-$2.46), CVS ($1.36), CAT ($4.52), META ($6.61), MSFT ($3.65), GOOGL ($2.26), and CMG ($0.28).

 

An Interesting Chart to Show Clients

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What’s in Today’s Report:

  • An Interesting Chart to Show Clients

Futures are little changed despite an underwhelming night of earnings and higher oil prices.

Earning overnight were disappointing, as TSLA, IBM and SAP all missed earnings or cut guidance.

Geo-politically, the U.S. sanctioned Russian oil companies Lukoil and Rosneft, causing a 5% spike in oil prices.

Today we do get some economic data via the Chicago Fed (E: -0.12) and Existing Home Sales (E: 4.06 million).  Neither report is normally a market mover, but given the lack of other data, the reports have the potential to move markets.  Solid readings (so in line with expectations) that show stable growth will be the best case for stocks.

Earnings season continues and after a very strong start last week, results this week have been much more mixed.  Reports we’re watching today include:  INTC ($-0.12), AAL ($-0.27), FCX ($0.41), HON ($2.56),  NEM ($1.29), F ($0.38),and  TMUS ($2.42).

Earnings Season is Here: Tom Essaye Interviewed on Yahoo Finance

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The bulk of earnings season is here as Tom Essaye joins Yahoo Finance

What earnings are telling investors: Don’t bet against US companies

Sevens Report Research Founder Tom Essaye and Yahoo Finance senior reporters Allie Canal and Ines Ferré weigh in on what the latest round of earnings is signaling to investors.

Also, click here to view the full interview on Yahoo Finance published on October 21st, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

If you want research that comes with no long term commitment, yet provides independent, value added, plain English analysis of complex macro topics, then begin your Sevens Report subscription today by clicking here.

To strengthen your market knowledge take a free trial of The Sevens Report.

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Should We Really Be Worried About Banks/Credit?

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What’s in Today’s Report:

  • Should We Really Be Worried About Banks/Credit?
  • Weekly Market Preview:  Focus Shifts to Earnings (And Tech Earnings Need to Be Strong)
  • Weekly Economic Cheat Sheet:  Flash PMIs on Friday the Key Report

Futures are modestly higher on China optimism and as investors look ahead to an important week of earnings.

Chinese GDP beat estimates (1.1% vs. (E) 0.8%) implying that global growth is stable, while a meeting between Treasury Secretary Bessent and Chinese Vice Premier Lifeng on Friday could lower U.S./China trade tensions.

Politically, there was no substantive progress towards ending the shutdown over the weekend.

Today there is only one economic reading, Leading Indicators (E: 0.01%) but it shouldn’t move markets.

Turning to earnings, there are two notable reports today, CLF ($-0.48) and CCK ($1.98), but the key reports come later this week (NLFX, TSLA and INTC all report this week among other notables).

 

Credit Spreads: Are We Seeing Liquidity Tightening?

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What’s in Today’s Report:

  • Credit Spreads: Are We Seeing Liquidity Tightening?

U.S. futures are solidly higher with European equity markets thanks to strong earnings from LVMH and ASML.

Economically, Eurozone Industrial Production fell -1.2% vs. (E) -1.6% m/m in August.

Today, there is one economic release to watch: the Empire State Manufacturing Index (E: -0.9) and a 4-Month Treasury Bill auction at 11:30 a.m. ET that could move short duration yields.

Additionally, today will be a busy day of Fed Speak with Miran (9:30 a.m. & 12:30 p.m. ET), Bostic (12:10 p.m. ET), Waller (1:00 p.m. ET), and Schmid (1:35 p.m. ET) all scheduled to deliver comments over the course of the day.

Finally, investors will remain keenly focused on earnings with quarterly reports due from ASML ($6.36), BAC ($0.94), MS ($2.08), PGR ($5.08), ABT ($1.30), UAL ($2.64), and JBHT ($1.48) today.

 

Volatility Reset or New Volatility Cycle?

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What’s in Today’s Report:

  • “Volatility Reset” or the Start of a New “Volatility Cycle?”
  • Silver Joins Gold at All-Time Highs

Markets are trading with a clear risk-off tone this morning amid a reescalation in trade tensions between the U.S. and China ahead of a slew of big bank earnings releases today.

Economically, the NFIB Small Business Optimism Index fell to 98.8 vs. (E) 100.5 in September but the Employment Subindex favorably rose for a fourth straight month which should help ease some labor market angst.

Looking ahead to today’s session, focus will remain on the trade war, specifically tensions between the U.S. and China, however, there are also two Treasury auctions (for 3-Month and 6-Month Bill at 11:30 a.m. ET) that could impact yields/Fed policy expectations and subsequently move equities.

Additionally, there are two Fed speakers on the calendar today: Bowman (8:45 a.m. ET) and Powell (12:20 p.m. ET). Obviously, any less-dovish tone from Fed Chair Powell has the potential to add pressure to an already fragile and heavy equity market today.

Finally, today marks the unofficial start of Q3 earnings season with several big banks/financials reporting quarterly results including: BLK ($11.25), JPM ($4.83), GS ($10.93), WFC ($1.55), and C ($1.83) as well as other notables: JNJ ($2.77), DPZ ($4.00).