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Acknowledging the Negative Outcome

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What’s in Today’s Report:

  • Acknowledging the Negative Outcome
  • Weekly Market Preview: Does Fed Commentary Back-up Rate Cut Expectations?
  • Weekly Economic Cheat Sheet: Fed speak the key with no government data this week.

Futures are solidly higher thanks to strength in Japanese stocks following a surprise election outcome and despite no progress on resolving the U.S. government shutdown.

The Nikkei surged more than 4% after the ruling Liberal Democratic Party elected Sanae Takaichi to be the new Prime Minister, a mildly surprising outcome that’s seen as positive for more economic stimulus from the BOJ.

Politically, there was no progress on resolving the U.S. government shutdown over the weekend, although markets are continuing to ignore the shutdown (and likely will for another two weeks or so, should it last that long).

Today there are no economic reports so focus will remain on any progress on resolving the shutdown.  There is also one Fed speaker today, Schmidt at 5:00 P.M. ET, but his comments come after the close and shouldn’t move markets.

What the Government Shutdown Means for Markets

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What’s in Today’s Report:

  • What the Government Shutdown Means for Markets
  • JOLTS & Case Shiller HPI Takeaways

Markets are trading with a risk-off tone this morning as stock futures are lower, bonds are steady and gold broke out to record highs above $3,900 after the government shutdown for the first time since 2018 at midnight.

Economically, the final Eurozone Manufacturing PMI for September edged up to 49.8 vs. (E) 49.5 while the EU’s Core CPI Flash met estimates at 2.3% y/y but the data is not materially impacting markets with the government shutdown news dominating headlines.

While the implications of the government shutdown will remain top of news, there are multiple important economic reports today including the ADP Employment Report (E: 50K), ISM Manufacturing PMI (E: 49.0), and Construction Spending (E: -0.1%). There is also one Fed official scheduled to speak: Barkin (12:15 p.m. ET).

Some late season earnings to watch include reports from CAG ($0.33) and RPM ($1.87), however, the government shutdown is likely to continue to dominate the newswires today so any signs of progress towards some sort of spending agreement in Congress would likely spark a relief rally while rising political tensions that could prolong the shutdown could prompt further losses in risk assets.

 

The Sector Winner from a “Run-Hot” Economy

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What’s in Today’s Report:

  • The Sector Winner From a “Run-Hot” Economy
  • Pending Home Sales Takeaways

Futures are lower and bonds are rallying modestly amid the growing threat of a government shutdown this week.

Economically, China’s official Manufacturing PMI edged up 0.4 points to 49.8 vs. (E) 49.6 in September.

Today kicks off jobs week with the August JOLTS report (E: 7.100 million) due out shortly after the bell. The closer the headline is to estimates, the better as a too-hot or too-cold print could weigh on already shaky markets amid the government shutdown worries.

Additionally, Consumer Confidence (E: 96.0), the Case-Shiller Home Price Index (E: -0.2%), the FHFA House Price Index (E: 6.7%), and Chicago PMI (E: 43.5) will all be released today.

There are a handful of Fed speakers today: Collins (9:00 a.m. ET), Goolsbee (1:30 p.m. ET), and Logan (7:10 p.m. ET), and the more dovish their tone, the better for markets as two more rate cuts in 2025 are still largely priced in.

Finally, there are a few late-season earnings releases to watch: PAYX ($1.21), UNFI ($-0.22), NKE ($0.28).

 

Technical Trends in the Economic Data

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What’s in Today’s Report:

  • Technical Trends in the Economic Data

Futures are little changed following a flurry of new tariff announcements overnight.

The administration announced several new tariffs on specific industries, most notably pharmaceuticals and semiconductors.

While the tariff headlines appear negative, the announcements include provisions to reduce the practical impact, they aren’t materially impacting markets.

Today focus will be on further dissecting the tariff announcements (as long as there are “outs” for companies, the announcements won’t be direct negative influences on markets) but also on inflation, as we get the Core PCE Price Index (E: 0.2% m/m, 2.9% y/y), and the inflation expectations in Consumer Sentiment (1-Yr Inflation Expectations: 4.8%, 5-Yr. Inflation Expectations: 3.0%).  Markets need inflation data to stay stable to continue to support rate cut hopes, so in-line to slightly soft numbers will be welcomed by markets (and a hot number would be a negative headwind).

Turning to the Fed, there are two speakers today:  Barkin (9:00 a.m. ET) and Bowman (1:00 p.m. ET) but they shouldn’t move markets.

 

New ETFs to Watch and AI-Bubble Update

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What’s in Today’s Report:

  • More Bubble Signs? OpenAI and NVDA Partnership
  • New ETFs for Your Watchlist

Futures are little changed as traders digest mixed EU Flash PMI data and await fresh comments from Fed Chair Powell today.

Economically, the EU Composite PMI Flash rose to 51.2 vs. (E) 50.9 with the Services Index notably rising to 51.4 vs. (E) 50.5 however the Manufacturing index disappointed.

Today, there are two economic reports to watch in the U.S., both of which will print shortly after the open: PMI Composite Flash (E: 53.0) and the Richmond Fed Manufacturing Index (E: -10).

The Fed’s speaker circuit will remain fairly busy today with Bowman (9:00 a.m. ET) and Bostic (10:00 a.m. ET) speaking this morning before focus will turn to commentary from Powell (12:35 p.m. ET) mid-day.

Additionally, there is a 2-Yr Treasury Note auction at 1:00 p.m. ET that could move bond yields and ultimately impact equities if there are any surprises regarding demand metrics (the stronger the demand the better for stocks).

Finally, some late season earnings reports continue to trickle in with notables reporting today including AZO ($50.52) and MU ($2.69).

 

Understanding Why Stocks Hit New Highs

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What’s in Today’s Report:

  • Understanding Why Stocks Hit New Highs
  • Weekly Market Preview: Does Goldilocks Growth and Inflation Data Continue?
  • Weekly Economic Cheat Sheet: September Flash PMIs Tuesday, Core PCE Price Index Friday are Key Reports

Futures are modestly lower as markets digested last week’s new highs following a mostly quiet weekend of news.

Politically, the U.S. government could shut down this Friday and that is weighing slightly on markets, although we don’t view any temporary, partial shutdown as a risk to the rally.

There was no notable economic data overnight.

Today the only economic report is the Chicago Fed National Activity Index (E: -0.19) and it’s unlikely to move markets, so focus instead will be on the Fed.

There are several Fed speakers today and the most important of them is Williams at 9:45 a.m. ET.  If Williams embraces two additional rate cuts this year, that should help support markets.  More broadly, markets will want to see dovish tones from most Fed speakers going forward, confirming the Fed intends several more rate cuts.  Other Fed speakers today include: Musalem (10:00 a.m. ET), Hammack (12:00 p.m. ET) and Barkin (12:00 p.m. ET).

 

What the Fed Rate Cut Means for Markets

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What’s in Today’s Report:

  • What the Fed Rate Cut Means for Markets (A Vote for the Run Hot Economy)

Futures are moderately higher following a mostly quiet night of news as investors digest Wednesday’s rate cut and the prospect of even lower rates in the future.

Economic data underwhelmed overnight as Japanese Machine Orders dropped (–4.6% vs. (E) -3.5%) while Australian employment fell –5,400 vs. (E) 22k.

Today we get a rate decision from the Bank of England (no change is expected) and some notable economic reports: Jobless Claims (E: 246K), Philly Fed (E: 3.0) and Leading Indicators (E: -0.1%).  With the Fed now cutting rates, stable and solid economic data is needed to support a further rally in stocks.  If economic data begins to roll over, however, that will be a new negative for markets because it’ll imply the Fed waited too long to begin to cut.

On the earnings front, some notable reports include:  DRI ($1.99), FDX ($3.65), LEN ($2.12).

 

Sevens Report Weighs on AI Trade as Alphabet Hits $3 Trillion Milestone

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Essaye flags next Big Tech contender for record valuation

Google hits $3T market cap. This Big Tech name could be next.

Sevens Report Research Founder Tom Essaye joins Opening Bid to discuss the Google parent company’s recent gains and what it signals about the artificial intelligence (AI) trade. He also shares another Big Tech name that he thinks could be the next to hit $3 trillion.

Also, click here to view the full video on Yahoo Finance published on September 16th, 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.

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What Would a “Run Hot Economy” Mean for Markets?

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What’s in Today’s Report:

  • What Would a “Run Hot” Economy Mean for Markets?
  • Retail Sales Data Takeaways – Consumer Resilience Persists

Futures are slightly lower ahead of the Fed decision after the Chinese government ordered tech companies to halt purchases of all AI chips from NVDA (-1.5% pre-market).

Economically, Eurozone Core HICP (CPI equivalent) held steady at 2.3% in August, meeting expectations which is helping tamp down worries about a potential resurgence in global inflation pressures.

Looking into today’s session, there is one economic report due to be released this morning: Housing Starts & Permits (E: 1.37M, 1.37M), but barring a big surprise one way or another, the market reaction should be limited as the Fed decision comes into focus.

There is a 4-Month Treasury Bill auction at 11:30 a.m. ET that could prompt a modest to moderate move in short-term Treasuries as traders attempt to gauge the near-term outlook for Fed policy ahead of the FOMC release, but again any market reaction should be limited.

The September FOMC meeting announcement will be released at 2:00 p.m. ET (E: -25 bp rate cut) followed by Fed Chair Powell’s press conference at 2:30 p.m. ET. An as-expected or dovish meeting outcome should support new stock market highs while the biggest risk to the rally is a hawkish surprise that could make for a painful afternoon selloff in the broader equity market.

 

FOMC Preview

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What’s in Today’s Report:

  • FOMC Preview
  • Chart – The Threshold for “Fed Disappointment” is 75 bp by Yearend
  • Empire State Manufacturing Survey Takeaways

Futures are modestly higher this morning thanks to bullish momentum as traders look ahead to the Fed decision.

Economically, Eurozone Industrial Production rose 0.3% vs. (E) 0.5% while the German ZEW Survey’s Current Conditions headline fell to -76.4 vs. (E) -74, however, neither report is materially impacting markets this morning with the Fed decision looming large.

Today, there are multiple important economic reports due to be released including Retail Sales (E: 0.3%), Import & Export Prices (E: -0.2%, -0.2%), Industrial Production (E: 0.0%), Business Inventories (E: 0.2%), and the Housing Market Index (E: 33).

Additionally, there is one noteworthy earnings release to watch: FERG ($3.01), but with the September FOMC meeting getting underway it is likely that a sense of “Fed paralysis” begins to grip markets as traders position into the decision.