Consumer confidence:

  • September consumer confidence index fell to 103, lower than the expected 105 and down from 108 in August.
  • Consumer expectations also fell by 10 points to 73, reaching a five-month low.

Housing market:

  • New home sales in August dropped by 8.7% month-over-month, worse than expected.
  • S&P Case-Shiller home price index for July showed a 1.1% increase year-over-year and a 0.6% increase month-over-month.
  • Despite higher mortgage rates, housing prices continue to rise due to smaller down payments and help from parents.

Interest rates and impact on economy:

  • The impact of higher interest rates on the economy has been delayed because most consumers already have mortgages at lower rates.
  • Corporations with locked-in low-interest rate debt are not feeling the effects yet, as their net interest expenses remain low.

PCE inflation data:

  • PCE is the preferred measure of inflation for the Fed.
  • The upcoming PCE data for September is expected to show a year-over-year growth of 3.2% in personal consumption and expenditures.
  • This data will likely determine market sentiment and could potentially lead to further stock market selloffs if it indicates higher inflation.

Potential government shutdown:

  • If there is a government shutdown before September ends, key economic data such as jobs reports, inflation data, and GDP data may be delayed or unavailable for analysis by the Fed.

Rate hike probability:

  • Currently, there is a 74% chance that there will be no rate hike in November and only a 25% chance of a 25 basis point hike.
  • The decision will depend on various factors including economic data (which may be affected by potential government shutdown) and market conditions.

Debt Ceiling Shutdowns:

  • There have been 14 debt ceiling related shutdowns in modern history.
  • Eight of those took place during President Reagan's administration, most lasting a day or two.
  • Some notable shutdowns include one in 1981 over a barbecue event and another in 2018 over immigration issues.

Impact of Government Shutdown on Investor Behavior:

  • It is hard to scare people who have experienced government shutdowns before into liquidating their portfolios.
  • Past episodes show that these shutdowns often result from disagreements between political parties and eventually get resolved.
  • Investors are less likely to be swayed by government shutdowns as a reason to sell off investments.

Risks to the Economy:

  • The US economy faces various hazards such as a potential auto worker strike, monthly government shutdown, resumption of student loan payments, and rising oil prices.
  • While each hazard individually may not cause significant harm, the convergence of multiple risks could create turbulence for an already cooling economy.
  • Consumers may feel the impact due to diminished savings, inflation pressure, student loans, and fuel prices.

Leading Economic Indicators:

  • Leading economic indicators show a consecutive decline for 17 months since the mid-'90s. This trend has only been seen during the Global Financial Crisis (GFC) previously.
  • The declining trend suggests potential challenges for the economy ahead but does not necessarily indicate an immediate crash.

Impact on Household Debt Service Ratio:

  • The household debt service ratio shows that debt payment as a percentage of disposable personal income has increased by 10% from its lows since Q4 2007.
  • This indicates that consumers are less leveraged and sensitive to interest rates compared to 15 years ago.
  • However, factors such as higher borrowing costs and prices may affect affordability for typical American households.

Implications for iPhone Sales:

  • The new iPhone release has generated significant interest and sales are expected to be strong.
  • Analysts believe that the new iPhone is selling well or better than previous models.
  • The impact of interest rates on the cost of purchasing a new phone remains unclear.

Dumb Money Movie Review:

  • The "Dumb Money" movie focuses on the events surrounding the meme stock craze and government shutdowns.
  • Some viewers found the emphasis on regular people using Robinhood and buying meme stocks engaging, while others felt it overshadowed other aspects of the story.
  • Performances by certain actors were praised, but some characters were perceived as underutilized or wasted in their roles.

Market Performance since Fed Rate Hikes:

  • Since the first rate hike in March 2022, various market indices have shown mixed performance.
  • The Nasdaq 100 is up 5%, S&P 500 is flat, Dow Jones is slightly down, and Russell 2000 is down more significantly.
  • These performances suggest ongoing uncertainty and potential further downside.

Analysis of Recovery Slope from Bear Market Lows:

  • A comparison of recovery slopes from bear market lows shows that the current rally remains below average.
  • This indicates that the pace of recovery has been slower compared to historical patterns.

Median Total Returns by Market Cap Deciles:

  • Median total returns for stocks across different market cap deciles show lower returns since the Fed started raising rates.
  • Only top two deciles have seen positive returns, while all other deciles have experienced losses during this period.

Potential Opportunities in Bonds:

  • Bonds may present opportunities despite expectations of rising rates.
  • Buying bonds with reasonable durations could provide stability even if rates continue to rise.

Stocks Worth Watching: Target Corporation:

  • Target's decision to close nine stores due to theft and crime raises concerns about the company's operations.
  • While this does not necessarily make it an attractive investment, some may consider monitoring its performance for potential opportunities.

Stocks Worth Watching: Dollar General Corporation:

  • Dollar General faces challenges due to increased pressure on low-end consumers and macro headwinds.
  • The stock has experienced a significant decline but may present opportunities for those willing to take risks.

Stocks Worth Watching: Nike Inc.:

  • Nike's chart shows a significant decline, round-tripping the pandemic gains.
  • Despite being cheaper than its historical valuation, the stock remains expensive relative to other stocks in the market.