Applied Materials in the news saying that US limits on exports of its semiconductor manufacturing equipment to China will hurt revenue more than previously thought. After a massive 43% rally in just the last month, the stock having one of its first detectable down days (so far), off -2.6%.

Notable that amid concerns about the AI bubble, Jeff Bezos said today that AI spending is likely a bubble that will produce losses at some point, but will leave society better off. www.cnbc.com/2025/10/03/j... Maybe . . . But apparently the "dance while the music is playing" theme continues.

The ISM Services report was weak, and below expectations, but also showed continued high inflation readings, so bond yields have risen somewhat. Stocks don't care much, as usual. Small-caps are the leaders today while NASDAQ-100 takes a breather.

Lots of sad economists as there is no jobs report this morning due to the shutdown, leaving everyone hanging about the state of the labor market. This is particularly important since it was cited as the key reason why the Fed cut last month and might do so again this year.

Interesting day in stocks. S&P 500 ending roughly flat, Russell 2000 up 0.6%, and NASDAQ-100 up 0.4% despite a plunge in TSLA. Semi stocks up 2%, but Tech overall only up 0.5% as Software is down on the day. Materials sector is best performer up 1%, even while Energy is worst performer down -0.9%.

Stocks very mixed today as the US government shuts down. Health Care is the leader again thanks to relief that drugmakers will avoid worst-case tariff/regulation scenarios after a deal Pfizer reached this week. Tech, Utilities, and Consumer Discretionary are up, the remaining sectors are down.

Markets mildly lower today, with a split in the mega-caps again. Indices weighed down by AMZN, META, GOOGL, JPM, and TSLA, and helped mostly by NVDA and big Pharma. Watching the UBS "Profitless Tech" index for fun and it's very weak (-2.8%) today, and down about -8% from the mid-September peak.

Tariffs etc. are hurting the economy from the bottom up. Small businesses and lower-income households are feeling it most, while big businesses and high-income households can either afford it or can find ways around the tariffs and other policies. Hence the lack of concern in stock indices.

For anyone who has tried to get an academic paper without an institutional account (via school or work), you can now get a free JSTOR account to read papers online. www.jstor.org/action/showL... An account allowing you to read more and to download them is also available for $179/year.

New Blog Post: The Fed's dilemma (or trilemma?) I highlight the data driving the Fed's unusual struggle to navigate higher inflation and weaker labor data, now combined with a third problem of political interference and potential loss of independence. www.millstreetresearch.com/the-feds-dil...

Notable that the S&P 500 has given back all of the post-FOMC gains (i.e. since last Wednesday), as 2-year yields have jumped back up from pre-Fed 3.50% to 3.65% now. While rates matter to markets in the short run, it is risk appetite, mostly via AI and crypto, that is driving the bus.

Stocks remain weak this afternoon, hampered by higher bond yields and strength in the US dollar. High-risk stocks and funds like ARKK and the Goldman Sachs Profitless Tech index are down 2-3%, alongside declining crypto (Bitcoin) prices.

Unusual day in stocks with most sectors down (some only mildly) with Energy the only positive sector and Tech mixed. Health Care is the biggest decliner among S&P 500 sectors today. Still lots of optimism and calls for S&P 7000 by year-end.

The third estimate of Q2 GDP was released and showed upward revisions to growth, particularly consumer spending. While this is of course backward-looking data, it suggests Q2 was stronger than previously assumed, and helps explain the better-than-expected Q2 earnings results.

Stocks are down moderately today, adding to yesterday's decline. Tech stocks are mostly down along with several other sectors, while Energy is the big gainer today as oil prices are higher again on hopes for Russian sanctions and a report showing crude inventories falling.

Some surprising housing data today, with new homes sales reported up a stunning 20% in August. Much of the increase was attributed to very aggressive price cuts and incentives by home builders trying to reduce high new home inventory, and more high-priced homes being sold last month.

Even the Magnificent 7 is getting narrower lately. Since August 4th, the Mag7's 11.7% gain has been mostly driven by 3 of the 7, while 3 others are actually down since then. TSLA +38% GOOG +29% AAPL + 25% AMZN +5% NVDA -1% META -2% MSFT -5% SPY is up 5% since then.

Stocks taking a breather from the relentless Tech-driven uptrend today, with Growth stocks down while Value holds up. Russell 1000 Growth down -1.1% while Value is flat on the day so far. Small-caps down slightly. S&P 500 in the middle with a -0.5% decline.

Large-cap equity indices trading higher today, with a boost from the recent announcement that NVIDIA will invest "up to $100 billion" in OpenAI to help it build new data centers and infrastructure. NVIDIA jumped on the news, though not all Tech stocks did. Rest of the market is mixed.

Relatively slow day today in equities but a big gap between large-caps and small-caps. S&P 500 up 0.3% so far while the Russell 2000 is down -0.9%. The equal-weighted S&P 500 (RSP) is down -0.25%, so it is mostly just the mega-caps up today. Apple and Oracle are both up ~3%, while semis are down.

Intel having its turn as the tech story of the day, up 25% on news that NVIDIA is taking a stake and developing chips together. NVIDIA is also up but less dramatically. The Semiconductor index (SOX) is up 3.5% this morning, driving the major indices.

Notable that the US Dollar Index (DXY) is down again and now back to its early July lows, which is the lowest since early 2022. This mostly reflecting the euro breaking out to a new high vs the dollar, trading at 1.18, up 14% year-to-date. The yen and pound are stronger but less dramatically.

Retail sales data out today was better than expected, capturing solid back-to-school spending and some recovery from earlier weakness. The news is not doing much for stocks or bonds, as most are focused on the Fed meeting that wraps up tomorrow, and today's data likely won't have much effect.

Another day of mostly Tech driving the indices while the average stock does little. Alphabet and Tesla are the main drivers of the index gains today, with assists from Apple, Amazon, and Meta. NVIDIA notable in its absence. The S&P 500 equal-weight is slightly down while the NASDAQ-100 is up 0.6%.

The inflation data for the 8 months of this year (under Trump) tell us a few things: * Tariffs are indeed coming through steadily in goods prices, now well above "normal" (ex COVID) levels * Services inflation is still (mostly) slowing but elevated.

Economic data and market response highlight where market's mind is at. CPI was mostly in line with expectations or marginally above at 0.4% headline and 0.3% core. Headline rose to 2.9% Y/Y and core held at 3.1% But unemployment claims jumped to 263K, pushing the 4-week average to 240.5K.

Fun fact for today: Due to their difference in weights, the massive 40% (!) gain in Oracle today contributes the same amount to the S&P 500's return (about 30bps) as the 4% gain in NVIDIA, and only a bit more than Broadcom's 9% gain does.

More important than the PPI data today was Oracle's earnings announcement that showed a massive surge in AI/cloud-related revenue and projected a huge increase in revenue and capex. The stock is up a staggering 40% this morning, making it suddenly one of the top 10 largest stocks.

PPI report today was lower than expected, but a mixed bag overall. The headline figures showed a -0.1% decline and downward revisions to last month. Y/Y headline PPI now 2.6% and core 2.8%. Much of the August dip was tied to trade services margins, while input costs and core goods rose.

Job growth was weaker than previously thought: The BLS just announced its preliminary annual benchmark employment data revisions for the 12 months through March 2025. It showed a large net revision of -911K jobs over the 12 months, or about -76K per month. www.bls.gov/news.release...

A key idea in Mill Street's stock selection work is that analyst estimate revisions tend to be persistent. Sometimes you find an extreme example of that, like Broadcom (AVGO). 5 years of consistent "beat and raise", most recently biggest positive monthly revisions in 5 years.

Stock market reversing dramatically from its opening gains, now down -0.8% on the S&P 500, most indices in the red now. News getting around that the economic data is not good, and stocks are expensive. Lower bond yields are not actually a great sign in these conditions. Risk appetite fading a bit.

While markets tend to like the idea of Fed rate cuts, keep in mind that rate cuts will not do much to boost the overall economy. While it may help at the margin, rates are not the main problem facing the economy. Trump policies are: tariffs, immigration, health care, education, DOGE, etc.

Jobs report just now was weak, only 22K new jobs and unemployment rate ticked up to 4.3%. Hours worked ticked down. 2-month net revisions were mildly negative. Bond yields falling further on the news, 10-yr Treasury at 4.08%, lowest since early April tariff move.

The Fed's predicament in one chart: Core PCE is above target and rising, with tariffs a key driver. Real consumption growth for YTD (7 months under Trump) has fallen sharply, near zero through July. So we may get the year's first rate cut this month, but not much else.

Notable that central bankers in Europe and the UK have spoken out today with warnings about the impact of the Fed losing its independence, highlighting the danger of Trump's clear interference in the Fed and aggressive attempts to push monetary policy toward lower rates.

The NASDAQ is getting a boost today from Alphabet gaining over 8% after a judge ruled it does not have to sell the Chrome browser or other more severe antitrust remedies. The reset of the market, however, is mixed or lower, including the Semiconductor index (SOX).

As @prchovanec.bsky.social notes here, the ISM surveys (and others) have shown a striking level of negativity regarding tariffs. Today's ISM data showed another month of high Prices Paid and low Employment readings, though New Orders picked up a bit. Smaller businesses feeling the tariff hit first.

Stocks trading lower today as worries about rising long-term bond yields have grown, with the UK in the spotlight (again) lately. Also news that the US has revoked Taiwan Semiconductor's authorization to ship gear to China, as it did for Samsung and SK Hynix recently. Semi stocks down -2.5% today.

Slightly less quiet in stocks this morning than anticipated, as weakness in NVDA and some other semiconductor stocks is weighing on the indices. Seems to be tied to news about AI chip competition from China (Alibaba) and Trump revoking waivers for semi equipment sales to China. SOX down -2.8%.

Just to summarize the Fed's dilemma, using the 7 months of 2025 (i.e. Trump) data we now have: Annualized core PCE inflation: 3.2% (target is ~2%) Annualized real consumer spending: 0.3% (long-run average is ~2.2%) = above-target inflation and weak consumer spending growth.

The Personal Income and Spending data for July came out and was right on consensus expectations. Income + 0.4% M/M, 5.0% Y/Y. Spending +0.5%, 4.7% Y/Y Prices +0.2% M/M, 2.6% Y/Y Core prices +0.3%, 2.9% Y/Y Real consumer spending growth slipped to 2.1% Y/Y, while YTD (7m) annualized now just 0.5%.

Notable that the widely-watched "high stakes" earnings report from NVIDIA last night has mostly ended up as a yawn. The stock has traded up and down today, currently down mildly, and the broader market is mostly up. There were arguably headlines for bulls and bears, but no major surprises.

Also just a reminder that the end of the long-standing "de minimis exemption" permitting no tariffs for packages shipped to the US valued at less than $800 ends tomorrow. About 3.7 million packages a day with the exemption normally come through, driven particularly by Amazon, Shein, etc.

The revisions to Q2 GDP data out today showed slightly better readings than initially reported, to 3.3% from 3.0%. Mostly due to somewhat better fixed investment growth. Consumption growth was also revised slightly higher. The data put Y/Y real GDP growth at 2.1% and the H1 annualized rate at 1.4%.

Will be interesting to see how long this suspension of postal deliveries into the US lasts and its impact, but it doesn't seem great . . . www.theguardian.com/us-news/2025...

Just a reminder that: The Magnificent 7 are (still!) more expensive than the rest of the S&P 500 The overall S&P 500 is as expensive as it has been in many years, matching the early 2021 peak. But also, the "S&P 493" (ex Mag 7) is also as expensive as it was in early 2021 at 20x NTM EPS.

Stocks are mixed today with big Tech up somewhat while the rest of the market is mildly lower. Investors are remembering that little has actually changed in the Fed's likely rate path after Jackson Hole on Friday last week, as inflation will limit any aggressive rate cutting.

Retail sales today were up and roughly in line with expectations and revised up somewhat for last month. Industrial production was down marginally but also revised slightly higher for last month. Univ. of Michigan sentiment declined (conditions down, inflation up) but has little predictive value.

The hopelessly antiquated Dow Jones Industrial Average is getting ~200-point boost today from the 12% jump in United Healthcare (UNH) on news that Warren Buffett has bought a stake. Even with that, the Dow is barely up today. The broader market is mostly lower as the economic data wasn't great.