ANGLES.

Well, I did warn you with my closing line of last week’s recap.

The biggest news story of an otherwise generally quiet weekend was that, barely a month after reaching an all-time high, Bitcoin collapsed into free-fall and erased its entire gain for the year in the latest crypto massacre.

Wall Street began a week of important earnings and a long-overdue September Jobs Report in a cautious mood on Monday, with more institutional funds announcing a full sale of all their Nvidia holdings but others (including Warren Buffet’s) intending to raise their stakes in Google and Apple.

After initial indecision, stocks eventually settled on a downward trajectory and then leaned heavily into the decline with the bulls mostly paralyzed, wary of making any big bets ahead of earnings from Nvidia and the retail giants.

This sudden overall drop in risk appetite in the US, which included the ongoing crypto bloodbath, gave Asian markets the jitters on Tuesday, exacerbated by a China/Japan diplomatic spat and local stocks got brutalized. European stocks quickly followed suit and the downdraft continued into New York, with a miserable pre-market earnings report from Home Depot adding fuel to the fire.

It seemed like it was going to be another frightful session with continued and increasingly alarming signs of exhaustion from Mega Cap Tech/AI until early afternoon when bargain-hunting dip-buyers arrived for a brief cameo to at least pull the indexes up from their lows, but we still suffered a fourth straight day of losses in stocks.

Markets largely stabilized across Asia and Europe on Wednesday and as Nvidia Day dawned in the US, traders prepped for the after-market big reveal by digesting another disappointing pre-market retail earnings report, this time from Target, but better than expected results from Lowe’s.

The minutes from the most recent Fed interest rate-setting meeting showed that “many” committee members saw a December cut as “inappropriate”. Nevertheless, stocks seemed somewhat reinvigorated by more dip-buyers placing bets on the possibility of a juicy Nvidia report and gained a little over the course of the session to end the losing streak.

When it arrived, the report blew away even the most lofty of Wall Street’s sky-high expectations with sensational revenue, earnings (profits up 65% from a year ago) and forecasts and Nvidia’s stock, 10% cheaper than it was three weeks earlier, was gobbled up in the after-market and ripped higher.

There was another strong earnings report pre-market on Thursday, from Walmart this time, but we also got a stale September Jobs Report which proved mixed, with much higher job gains than expected but worrying downward revisions to previous months’ data and a tick-up in the unemployment rate, leaving the Fed Funds Rate cut picture still cloudy.

Wall Street began the session with a renewed spring in its step with Nvidia and Walmart initially rewarded for their outstanding reports which helped to pull the indexes higher.

But sentiment turned suddenly and sharply ugly and the early gains quickly dissolved and turned into significant losses as anxieties resurfaced about AI spending commitments vs. tangible benefits as well as elevated tech stock valuations. Things heating up in and around Venezuela didn’t help.

The crypto crap-out showed no signs of easing with Bitcoin’s price plunging to more than 30% below its October 7th high, representing more than a trillion dollars in lost value in the space of a month and a half and pushing the cryptocurrency closer to its biggest monthly drop in years.

Asian markets tumbled again on Friday following New York’s vicious intra-day whiplash. The rollercoaster ride continued when US markets opened higher again. The upside catalyst seemed to be Fed-speak, with highly influential New York Fed president Williams articulating the case for a December interest rate cut, triggering a serious spike in the probability of that outcome (see INTEREST RATE EXPECTATIONS below). Far less surprisingly, Trump stooge governor Miran went all in on the rate cut narrative, as per his master’s instructions.

The gains felt a little fragile, however, especially after sentiment data showed that the American consumer hasn’t felt this pessimistic and worried about the economy since the Great Financial Crisis of 2008. The indexes chopped around as the session went on, but eventually did finish higher on the day as dip buyers moved in to feast on Thursday’s declines.

Alphabet/Google took Microsoft’s spot on the podium as the world’s third biggest company by capitalization behind Nvidia and Apple. The broad indexes, however, still closed out their worst week since so-called “Liberation Day” in April and crypto continues to wallow in a world of pain.

Check out the Angles homepage for my new explainers on workplace benefits, new 401k/IRA contribution limits and tax brackets, HSAs, FSAs, BackDoor IRA and Mega BackDoor 401k contributions - all freshly updated for 2026.

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ARTICLE OF THE WEEK ..

Callie Cox again and well worth a read as always .. No targets. No predictions. No sales pitches or marketing gimmicks. Just the themes to watch for in 2026 and what it could mean for your money.

.. AND I QUOTE ..

“Please! I’ve never seen a more blatant use of “democratization” as a disguise for selling someone else’s bags. Private equity needs exit liquidity and everyday Americans have it.”

Ritholtz Wealth Management’s COO Nick Maggiulli on the worrying prospect of increasing public “access” to illiquid private equity, including in 401k plans.

Private equity needs suckers to sell their s**t to and is licking its lips at the prospect of skewering retail investors. Don’t fall for it.

LAST WEEK BY THE NUMBERS:

Last week’s market color courtesy of finviz.com

Last week’s best performing US sector: Healthcare (two biggest holdings: Eli Lilly and Johnson & Johnson) for the second week in a row ⬆︎ 1.8% for the week

Last week’s worst performing US sector: Technology (two biggest holdings: Nvidia, Microsoft) ⬇︎ 5.2% for the week

* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price fell 1.9% last week, is up 12.5% so far this year and ended the week 4.5% below its all-time record closing high (10/29/2025).

* IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price fell 0.8% last week, is up 6.6% so far this year and ended the week 6.1% below its all-time record closing high (10/15/2025).

* VXUS, a Global Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price fell 2.7% last week, is up 23.7% so far this year and ended the week 3.9% below its all-time record closing high (11/12/2025).

INTEREST RATES:

* FED FUNDS * ⬌ 3.875% (unchanged from a week ago)

* PRIME RATE ** ⬌ 7.00% (unchanged from a week ago)

* 3 MONTH TREASURY ⬇︎ 3.90% (3.95% a week ago)

* 2 YEAR TREASURY ⬇︎ 3.51% (3.62% a week ago)

* 5 YEAR TREASURY ⬇︎ 3.62% (3.74% a week ago)

* 10 YEAR TREASURY *** ⬇︎ 4.06% (4.14% a week ago)

* 20 YEAR TREASURY ⬇︎ 4.67% (4.73% a week ago)

* 30 YEAR TREASURY ⬇︎ 4.71% (4.74% a week ago)

Data courtesy of the Federal Reserve and the Department of the Treasury as of the market close on Friday

* Decided upon by the Federal Reserve Open Market Committee at periodic meetings 8x a year. Used as a basis for overnight interbank loans and for determining high yield savings interest rates.

** Wall Street Journal Prime Rate as of Friday’s close. Used as a basis for determining many consumer loan interest rates such as credit cards, p…

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit simonbrady.substack.com

Faced with rapidly escalating public fury aimed at all sides over the shutdown, Senate Democrats blinked first in the standoff over the weekend, allowing a procedural vote to go through on Sunday night which passed the buck over to the House and the beginning of the end finally came into view.

Wall Street celebrated when markets opened on Monday morning and attention turned to exactly when the upcoming deluge of backed-up economic data can be expected relative to the December 10th Fed Funds Rate announcement and quarterly Dot Plot publication and how reliable the quality of that data will be.

Stocks soared (with the notable exception of health insurance companies), scoring their best one-day performance since May with the S&P 500 and NASDAQ both recovering about 2/3rds of the previous week’s losses in just one session.

The monster reaction rally faded on Tuesday, however, as traders tried to wrap their heads around the inflationary effects of ideas like 50 year mortgages (see ARTICLE OF THE WEEK below) and a deficit-busting $2k per person handout (aka an electoral bribe) in the lead-up to next year’s midterms. Having absurdly insisted the tariffs would not affect consumer affordability, the administration set about walking back selected tariffs on certain household items in the name of .. increasing affordability. The political silly season is clearly beginning to move into high gear.

A degree of AI skepticism was still lurking in the background, with Softbank bailing on its entire Nvidia stake and Coreweave stock falling hard on weak guidance despite a generally satisfactory Q3 earnings report.

A retreat in software and semi-conductor names saw the NASDAQ close lower, but the somewhat less tech-heavy S&P 500 made light gains, highlighting a noticeable growing investor rotation from momentum-driven, high risk, lower quality, growth-oriented names in favor of lower volatility, higher quality and more defensive value-oriented ones. Tiny bit by tiny bit, some risk is being gently eased off the table.

This pattern repeated itself on Wednesday as tech and tech-adjacent sectors (including Bitcoin) skidded further, while the rest of the market had another slightly positive day and relatively tech-light European stocks finished at fresh all-time highs.

Mainly because it’s a stupid index, I rarely mention the still-popular-for-some-reason Dow Jones Industrial Average, but I’ll reluctantly break that rule for once by pointing out that it closed above 48,000 for the first time on Wednesday.

After the market close, the House put the final nail in the coffin of this particular 43-day shutdown, ensuring federal government funding at least through January 30th of next year.

The sense that developed on Thursday was that it could easily be mid-to-late Q1 2026 before any economic data releases become clean or trustworthy (and, according to the White House, we will never be told what the October unemployment rate was).

So markets and the Fed will still be flying relatively blind for a while yet and one outcome could well be that the originally-assumed Fed rate reduction next month may not now happen as the futures market-driven probabilities of a cut fell to below 50% just two weeks after being at over 90% (see INTEREST RATE EXPECTATIONS below). This anxiety was intensified by Fed officials sounding very cautious about the idea in a number of speeches.

Stocks suffered a very ugly sell-off as a result which only accelerated as Thursday’s session wore on. Once again, the AI, software and semi-conductor big dogs led the charge south, but no corner of the market was spared this time, with the S&P 500 giving back all of Monday’s gains. Interest rates jumped higher.

Asian and European markets dutifully tumbled on Friday and the losses piled up again for risk assets when New York opened with the NASDAQ initially getting walloped again as traders anticipated turbulence linked to the upcoming dubious-quality economic data dump in the coming weeks.

But then the cavalry arrived in the form of aggressive bargain-hunting dip-buyers who emerged to offset the worst of the declines and even carry the bruised and battered NASDAQ fractionally into the green by the close, with the S&P 500 little changed on the day.

Prices and vibes seemed to be shaping the narrative rather than the other way around with no tangible single catalysts for this week’s tech-fueled decline beyond a sense of excess froth and a growing number of unanswered questions about AI and its long term return-on-investment potential. Oh, and by the way, this week we get the Nvidia Q3 earnings report as well as those of the major retailers.

Fasten your seat belts.

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ARTICLE OF THE WEEK ..

I could not believe that I heard this as even a semi-serious suggestion last week. The utterly bonkers idea of a 50 year mortgage.

The Wall Street Journal was also unimpressed.

.. AND I QUOTE ..

“Definition of an ideal level of wealth: You can wake up every morning realizing that you are able to spend your time doing what you want, with whom you want, for as long as you want.”

Morgan Housel, author and co-founder of Collaborative Fund

LAST WEEK BY THE NUMBERS:

Last week’s market color courtesy of finviz.com

Last week’s best performing US sector: Healthcare (two biggest holdings: Eli Lilly and Johnson & Johnson) ⬆︎ 3.9% for the week

Last week’s worst performing US sector: Consumer Cyclical (two biggest holdings: Amazon, Tesla) ⬇︎ 2.1% for the week

* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price rose 0.1% last week, is up 14.6% so far this year and ended the week 2.6% below its all-time record closing high (10/29/2025).

* IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price fell 1.7% last week, is up 7.5% so far this year and ended the week 6.1% below its all-time record closing high (10/15/2025).

* VXUS, a Global Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price rose 1.0% last week, is up 27.2% so far this year and ended the week 1.3% below its all-time record closing high (11/12/2025).

INTEREST RATES:

* FED FUNDS * ⬌ 3.875% (unchanged from a week ago)

* PRIME RATE ** ⬌ 7.00% (unchanged from a week ago)

* 3 MONTH TREASURY ⬆︎ 3.95% (3.92% a week ago)

* 2 YEAR TREASURY ⬆︎ 3.62% (3.55% a week ago)

* 5 YEAR TREASURY ⬆︎ 3.74% (3.67% a week ago)

* 10 YEAR TREASURY *** ⬆︎ 4.14% (4.11% a week ago)

* 20 YEAR TREASURY ⬆︎ 4.73% (4.65% a week ago)

* 30 YEAR TREASURY ⬆︎ 4.74% (4.70% a week ago)

Data courtesy of the Federal Reserve and the Department of the Treasury as of the market close on Friday

* Decided upon by the Federal Reserve Open Market Committee at periodic meetings 8x a year. Used as a basis for overnight interbank loans and for determining high yield savings interest rates.

** Wall Street Journal Prime Rate as of Friday’s close. Used as a basis for determining many consumer loan interest rates such as credit cards, personal loans, home equity loans/lines of credit, securities-based lending and auto loans.

*** Used as a basis for determining mortgage interest rates and some business loans

AVERAGE 30-YEAR FIXED MORTGAGE RATE:

* ⬆︎ 6.24%

One week ago: 6.22%, one month ago: 6.28%, one year ago: 6.78%

Data courtesy of Freddie Mac Primary Mortgage Market Survey

INTEREST RATE EXPEC…

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It was a light weekend for disruptive news which included no progress whatsoever in a resolution of the government shutdown, now in its second month and set to become the longest in US history. It is starting to be acutely felt by millions of Americans with more missed paychecks, food aid broken, cuts to child care kicking in, turmoil at airports and health insurance premiums spiking. Every week that passes with Congress deadlocked is costing the US economy an estimated $10-$30 billion.

Amazon became the latest tech giant to hop on the OpenAI gravy train with a $38 billion cloud deal announcement as US markets opened on Monday and there were small green arrows for the indexes over the course of what was a rather dull first session of November, which is historically the best month of the year for stock prices.

As electors went to the polls to ultimately give Democrats thumping wins in “off-year” elections in New York, New Jersey, Virginia and elsewhere on Tuesday in something of a referendum on the Trump administration, Wall Street got a sudden AI nosebleed.

Traders’ bear market memory banks have been mostly erased lately but sentiment took an abrupt risk-off turn and stocks dumped decisively as sky-high AI valuations seemed to matter all of a sudden. The fact is that if you strip out the Big Tech/AI names that dominate the indexes, the broad stock market had been falling for a week or more. That safety net dramatically fell away on Tuesday.

A collapse in those recently high-flying AI names trashed the NASDAQ by more than 2% and Nvidia by over 4%. Bitcoin saw its entire summer rally wiped out in a matter of hours with a nearly 7% nosedive back to below $100k. Bonds were the main beneficiaries of the outflows and interest rates fell back.

Asian stocks took their lead from Wall Street’s tumble and took a drubbing of their own, but things had stabilized by the time the baton was passed back to New York on Wednesday with a sense of “Wait, was that it?” in relation to Tuesday’s setback.

The question for traders at the open was; are the dip buyers ready to pounce? The answer seemed to be yes, to a degree, as the indexes came back to recover about a quarter of Tuesday’s losses and the previous day’s sharp drop in interest rates reversed.

But Thursday saw a resumption of the sell-off as state-level data showed plans for the most monthly layoffs by US employers since 2003. The extent of air travel chaos resulting from the shutdown became evident with a report from the FAA detailing massive and rapidly growing levels of cancellations and delays. The Supreme Court appeared to be leaning towards declaring most of Trump’s tariffs to be illegal and possibly worthy of refunds to US businesses, which would cause pandemonium.

AI jitters crept back again following some rather cynical statements from a number of business leaders and the stock prices of the tech big dogs got whacked again. This pile-on of headaches killed off the brief recovery rally and pushed the indexes substantially lower for the second time in three days.

Fueled by another plunge in consumer sentiment to its lowest level in years, momentum from Thursday’s decline knocked stocks down again on Friday morning on what should have been a Jobs Report day.

The swoon continued into the early afternoon until Senate Minority Leader Schumer offered a glimmer of hope with a shutdown-ending proposal which turned markets around and the S&P 500 even managed to close slightly in the green for the day. Markets moving on the back of political negotiations could mean that we are entering a new phase, where the shutdown is beginning to finally really matter to financial markets.

It was a pretty miserable week for stocks in general, and this new concept of possible AI fatigue resulted in a 3% weekly drop in the NASDAQ index, its worst week since the tariff tantrums that accompanied so-called “Liberation Day” back in April.

Bigger-picture bullish momentum seems to be broadly still intact however and the earnings season is generally affirming the positive setup. But this market is clearly being increasingly driven by AI exuberance and, given the relentless nature of the advance over the last two or three years, it doesn’t take much to get traders to take some cash off the table, as last week reminded us.

Check out the Angles homepage for my new explainers for workplace benefits, new 401k/IRA contribution limits and tax brackets, HSAs, FSAs, backdoor and Mega BackDoor contributions - all freshly updated for 2026.

If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.

ARTICLE OF THE WEEK ..

Callie Cox is the best! How to invest without going insane including building a process and why the first investments that you make matter the most in your portfolio.

.. AND I QUOTE ..

“The crucial question is whether this rally has already gotten ahead of itself and if it can continue in the final months of the year. Just one unexpected event could knock stocks down from their highs amid poor market breadth, but that may be tough to do, given that traders are usually optimistic around the holidays.”

Ed Yardeni, founder, Yardeni Research (on Monday of last week)

LAST WEEK BY THE NUMBERS:

Last week’s market color courtesy of finviz.com

Last week’s best performing US sector: Energy (two biggest holdings: Exxon Mobil, Chevron) ⬆︎ 1.6% for the week

Last week’s worst performing US sector: Technology (two biggest holdings: Nvidia, Microsoft) ⬇︎ 4.2% for the week

* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price fell 1.6% last week, is up 14.5% so far this year and ended the week 2.7% below its all-time record closing high (10/29/2025).

* IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price fell 1.9% last week, is up 9.4% so far this year and ended the week 4.4% below its all-time record closing high (10/15/2025).

* VXUS, a Global Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price fell 0.6% last week, is up 25.9% so far this year and ended the week 2.1% below its all-time record closing high (10/27/2025).

INTEREST RATES:

* FED FUNDS * ⬌ 3.875% (unchanged from a week ago)

* PRIME RATE ** ⬌ 7.00% (unchanged from a week ago)

* 3 MONTH TREASURY ⬆︎ 3.92% (3.89% a week ago)

* 2 YEAR TREASURY ⬇︎ 3.55% (3.60% a week ago)

* 5 YEAR TREASURY ⬇︎ 3.67% (3.71% a week ago)

* 10 YEAR TREASURY *** ⬌ 4.11% (4.11% a week ago)

* 20 YEAR TREASURY ⬆︎ 4.68% (4.65% a week ago)

* 30 YEAR TREASURY ⬆︎ 4.70% (4.67% a week ago)

Data courtesy of the Federal Reserve and the Department of the Treasury as of the market close on Friday

* Decided upon by the Federal Reserve Open Market Committee at periodic meetings 8x a year. Used as a basis for overnight interbank loans and for determining high yield savings interest rates.

** Wall Street Journal Prime Rate as of Friday’s close. Used as a basis for determining many consumer loan interest rates such as credit cards, personal loans, home equity loans/lines of credit, securities-based lending and auto loans.

*** Used as a basis for determining mortgage interest rates and some business loans

AVERAGE 30-YEAR FIXED MORTGAGE RATE:

* ⬆︎ 6.22%

One week ago: 6.17%, one month ago: 6.32%, one year ago: 6.79%

Data courtesy of Freddie Mac Primary Mortgage Market Survey

INTEREST RATE EXPECTATIONS:

Where will the Fed Funds interest rate be after the final rate-setting meeting of the year on December 10th?

* Unchanged from now .. ⬇︎ 33% probability (37% a week ago)

* 0.25% lower than now .. ⬆︎ 67% probability (63% a week ago)

Data courtesy of CME FedWatch …

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit simonbrady.substack.com

China and the US may have reached a “substantial framework” of some kind of trade agreement, according to breadcrumbs laid over the weekend by Trump, who was scheduled to meet with Chinese premier Xi in Seoul later in the week. He teased a flurry of other Asian trade deals too and local stocks rocketed with more new all-time record highs for markets in Japan and South Korea.

The devil will be in the details of all these trade deals if they even pan out and those are notably lacking right now, but Wall Street still got swept up in the exuberance with the bulls taking complete charge as an event risk-laden week kicked off on Monday, partly bolstered by the stock price of Qualcomm which soared after the firm unveiled new AI chips to challenge Nvidia’s.

Of course, new all-time record highs in US stocks inevitably ensued but the gold price continued to crumble from its recent highs. Oil prices steadied.

A Japan trade deal, check. Trump offered new prime minister Takaichi “anything you want” on Tuesday and moved on to South Korea and a Thursday meeting with Xi. Apple CEO Tim Cook and Nvidia’s Jensen Huang were both wheeled out as performative arm candy.

Back home in the US, Wall Street mostly held its breath ahead of Big Wednesday (a Fed Funds Rate announcement and three Mag 7 earnings reports after the closing bell) but continued concentrated momentum in Tech/AI stocks caused a slow drift upwards and yet more new record highs for the S&P 500, despite the fact that 400 of the 500 stocks in the index were lower on the day.

We got the expected quarter point cut in the Fed Funds Rate on Wednesday, but there was dissent from both sides of the spectrum as Trump’s glove puppet, governor Stephen Miran, called for a bigger cut (shocker!) but governor Jeff Schmid counter-balanced that by voting for no cut at all, exposing widening divisions on the rate-setting committee.

In his dance with the financial press pack, a cautious chairman Powell seemed to cast doubt on the general assumption that a third consecutive rate cut on December 10th is already in the bag (“What do you do when you are driving in the fog? You slow down,”). Market expectations for a December cut were at 92% going into the press conference, but in the space of an hour had collapsed to 55% (see INTEREST RATE EXPECTATIONS below). Essentially a coin flip.

Wall Street reacted accordingly in real time with a drop-off in stock prices and a jump in interest rates and the indexes shifted from deep in the green to slightly in the red for the session.

Having said that, the fact is that the Fed is gaslighting markets by cutting interest rates while inflation is 3% and rising but still insisting that it has a 2% target (which hasn’t been hit in five years). Wall Street seems to have decided that it’s not going to fall for this nonsense any more and that 3% is very much the new 2% whatever the Fed may claim, anticipating at least three more cuts by July almost regardless of what happens with inflation.

Attention shifted to the post-market earnings reports. Alphabet/Google’s numbers were absolutely outstanding, blasting through estimates for revenue, earnings and any other metric you can think of. Microsoft’s were just meh and Meta’s were negatively impacted by a surprise one-time big tax charge and cash burn concerns. All three are maintaining enormous AI spending, $78 billion between them in Q3 alone (a 90% increase on the same period last year).

While Trump described his meeting with Xi on Thursday as a “12 out of 10” , all we really got was a tariff truce extension which was not enough for Wall Street to hang on to and stocks retreated, with Microsoft and especially Meta dampening index performance.

Two more Mag 7 names, Apple and Amazon, reported after the close. Apple came in pretty solid but without much of a wow factor and its Chinese revenue was problematic again. On the other hand, Amazon stock ripped higher in the after-market following spectacular numbers, particularly for its cloud unit, Amazon Web Services.

An early Friday rebound was heavily fueled by Amazon, which added $300 billion to its market value in the first minute of trading and reached its own all-time new record high and stocks comfortably completed a sixth straight month of gains, the first time that has happened since the V-shaped COVID recovery over five years ago.

Assuming it is still in place on Wednesday this government shutdown will become the longest in American history, but otherwise the US stock market is currently enjoying the best of all worlds.

It’s getting remarkable earnings (a high 80s percent of reports are beating estimates, many by a lot) and the Fed is choosing to react to something (the labor market) that Wall Street cares a lot less about by lowering interest rates and all the time the bond market is generally behaving itself by not freaking out. This is why stock indexes are scoring new high after new high. The question is, of course, how long can this sweet spot last?

Check out the Angles homepage for my new explainers for workplace benefits, new 401k/IRA contribution limits and tax brackets, HSAs, FSAs, backdoor and Mega BackDoor contributions - all freshly updated for 2026.

If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.

ARTICLE OF THE WEEK ..

There’s a lot of chatter out there about bubbles. But what exactly is a bubble?

.. AND I QUOTE ..

“More fiction has been written in Excel than Word.”

Anon.

LAST WEEK BY THE NUMBERS:

Last week’s market color courtesy of finviz.com

Last week’s best performing US sector: Technology (two biggest holdings: Nvidia, Microsoft) ⬆︎ 2.4% for the week

Last week’s worst performing US sector: Real Estate (two biggest holdings: Welltower, Prologis) ⬇︎ 4.1% for the week

* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price rose 1.5% last week, is up 16.4% so far this year and ended the week 0.8% below its all-time record closing high (10/29/2025).

* IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price fell 0.1% last week, is up 11.4% so far this year and ended the week 1.6% below its all-time record closing high (10/15/2025).

* VXUS, a Global Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price fell 1.2% last week, is up 28.6% so far this year and ended the week 1.2% below its all-time record closing high (10/27/2025).

INTEREST RATES:

* FED FUNDS * ⬇︎ 3.875% (4.125% a week ago)

* PRIME RATE ** ⬇︎ 7.00% (7.25% a week ago)

* 3 MONTH TREASURY ⬇︎ 3.89% (3.93% a week ago)

* 2 YEAR TREASURY ⬆︎ 3.60% (3.48% a week ago)

* 5 YEAR TREASURY ⬆︎ 3.71% (3.61% a week ago)

* 10 YEAR TREASURY *** ⬆︎ 4.11% (4.02% a week ago)

* 20 YEAR TREASURY ⬆︎ 4.65% (4.56% a week ago)

* 30 YEAR TREASURY ⬆︎ 4.67% (4.59% a week ago)

Data courtesy of the Federal Reserve and the Department of the Treasury as of the market close on Friday

* Decided upon by the Federal Reserve Open Market Committee at periodic meetings 8x a year. Used as a basis for overnight interbank loans and for determining high yield savings interest rates.

** Wall Street Journal Prime Rate as of Friday’s close. Used as a basis for determining many consumer loan interest rates such as credit cards, personal loans, home equity loans/lines of credit, securities-based lending and auto loans.

*** Used as a basis for determining mortgage interest rates and some business loans

AVERAGE 30-YEAR FIXED MORTGAGE RATE:

* ⬇︎ 6.17%

One week ago: 6.19%, one month ago: 6.32%, one year ago: 6.72%

Data courtesy of Freddie Mac Primary Mortgage Market Survey

INTEREST RATE EXPEC…

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There was nothing but tumbleweed over the weekend in regards to any resolution of the government shutdown. Israel resumed its deadly bombing of Gaza with the supposed peace agreement barely a week old. Statements out of Kiev and Moscow highlighted entrenched positions that appeared to make the prospect of any kind of viable deal seem rather fanciful.

Coming off their best week since August, stocks moved higher again at the open on Monday (hours after Japanese equities reached fresh all-time record highs) with a strong risk-on mindset ahead of important earnings reports later in the week, particularly from highly-weighted index components Netflix, Tesla and Intel.

Another index heavyweight, Apple, is hurtling towards a $4 trillion valuation and the stock price reached its own new all-time record high for the first time in 2025 on Monday following the release of solid iPhone 17 sales data. This helped push the NASDAQ up to another new record.

Stocks started the session on Tuesday with all the energy of a mandatory driver awareness course. The indexes spent the day hugging the flatline to close unchanged. Gold’s recent spectacular rally came to a screeching halt as the price suffered its worst daily decline in over a decade (see my timely ARTICLE OF THE WEEK in last week’s recap).

Netflix beat Wall Street estimates on earnings and revenue and gave an upbeat forecast after the close, but there was a major caveat. A one-time legal settlement of over $620m with the Brazilian tax authorities was reported and that turned the results into a disappointment versus the estimates. The stock price fell sharply in after-hours trading.

When the real market opened on Wednesday morning, Netflix’s significant decline was confirmed and this, along with developing doubts about the prospects of any imminent Trump/Xi or Trump/Putin meetings and open warfare breaking out among Republican lawmakers about where to go with the shutdown (now the second longest in American history), slammed the indexes substantially lower on the back of some heavy profit-taking.

Indeed, the broad momentum unwind intensified across the board as the gold rout continued into a second day and crypto prices also fell hard. Oil prices spiked 5% on the back of the US imposition of deeper sanctions on Russia that specifically blacklisted two major oil companies.

After the close, Tesla reported miserable net income and a plunge in profits in Q3, in spite of consumers reportedly rushing to buy EVs ahead of the tax credit expiry. The stock price fell in the after-market and the decline only accelerated as Musk tried to explain it all away in a chaotic analyst call during which he seemed more focused on pleading the case to shareholders for his proposed trillion dollar pay package.

Stocks got off to a snoozy start on Thursday but picked up steam as the session wore on with the Trump/Xi meeting seemingly back on, Tesla clawing back some of its initial losses, energy names benefitting from the continuing oil price jump and more positive earnings reports. After a higher close for the indexes, Intel’s numbers, sprinkled as they were with a generous helping of AI pixie dust, comfortably beat estimates.

All seemed to be getting back on track, until a late night out-of-left-field announcement from Trump that he was terminating trade negotiations with Canada because he had been a bit irked by some TV ad aired in Ontario that poked holes in the idea of tariffs. Assuming yet more TACO, Wall Street just rolled its eyes and got on with its day on Friday.

An oasis in the shutdown data desert finally showed up with the delayed pre-market CPI report for September. It showed a small increase to a 3.0% annualized inflation rate that is still a long way from the Fed’s 2.0% target and slowly drifting in the wrong direction.

Nevertheless, the fact that there was no horror show inflation number confirmed to markets that a lowering of the Fed Funds Interest Rate this week is fully locked in with a green light for another cut in December (see INTEREST RATE EXPECTATIONS below). Stocks surged to end the week at yet more new all-time record highs with the S&P 500 closing in on the 6800 level.

This is a massive upcoming week and I am not being hyperbolic when I say that. Not only is the Fed issuing its interest rate decision on Wednesday but we also get to see Q3 earnings from three Mag 7 names (Microsoft, Meta and Alphabet/Google) as well as ~35% of S&P 500 companies in the busiest week of the earnings season.

The government shutdown pressure will ratchet up further with not far off a million workers set to miss a paycheck on Thursday. Trump and Xi will (maybe) meet this week in Malaysia while the US and Canada will try to repair a currently-broken trading relationship.

Throw in critical elections in Argentina and a military escalation off the coast of Venezuela and Wall Street will be on high alert. And who knows what else could suddenly crop up? Happy Halloween.

If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.

ARTICLE OF THE WEEK ..

A framework for dealing with a highly-appreciated stock position with huge gains. There are no easy answers.

.. AND I QUOTE ..

“When it comes to investing a lot of things are interesting without being meaningful”.

David Booth, Co-founder Dimensional Fund Advisors

LAST WEEK BY THE NUMBERS:

Last week’s market color courtesy of finviz.com

Last week’s best performing US sector: Technology (two biggest holdings: Nvidia, Microsoft) ⬆︎ 3.0% for the week

Last week’s worst performing US sector: Consumer Defensive (two biggest holdings: Walmart, Costco) ⬇︎ 0.8 for the week

* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price rose 1.9% last week, is up 15.6% so far this year and ended the week at a new all-time record closing high.

* IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price rose 2.5% last week, is up 12.9% so far this year and ended the week 1.3% below its all-time record closing high (10/15/2025).

* VXUS, a Global Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price rose 1.0% last week, is up 27.2% so far this year and ended the week at a new all-time record closing high.

INTEREST RATES:

* FED FUNDS * ⬌ 4.125% (unchanged)

* PRIME RATE ** ⬌ 7.25% (unchanged)

* 3 MONTH TREASURY ⬇︎ 3.93% (4.00% a week ago)

* 2 YEAR TREASURY ⬆︎ 3.48% (3.46% a week ago)

* 5 YEAR TREASURY ⬆︎ 3.61% (3.59% a week ago)

* 10 YEAR TREASURY *** ⬌ 4.02% (4.02% a week ago)

* 20 YEAR TREASURY ⬇︎ 4.56% (4.58% a week ago)

* 30 YEAR TREASURY ⬇︎ 4.59% (4.60% a week ago)

Data courtesy of the Federal Reserve and the Department of the Treasury as of the market close on Friday

* Decided upon by the Federal Reserve Open Market Committee at periodic meetings 8x a year. Used as a basis for overnight interbank loans and for determining high yield savings interest rates.

** Wall Street Journal Prime Rate as of Friday’s close. Used as a basis for determining many consumer loan interest rates such as credit cards, personal loans, home equity loans/lines of credit, securities-based lending and auto loans.

*** Used as a basis for determining mortgage interest rates and some business loans

AVERAGE 30-YEAR FIXED MORTGAGE RATE:

* ⬇︎ 6.19%

One week ago: 6.27%, one month ago: 6.32%, one year ago: 6.54%

Data courtesy of Freddie Mac Primary Mortgage Market Survey

INTEREST RATE EXPECTATIONS:

Where will the Fed Funds interest rate be after the next rate-setting meeting on October 29th?

* Unchanged from now .. ⬌ 1% probability (1% a week ago)

* 0.25% lower than now .. …

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit simonbrady.substack.com

As speculated in last week’s recap, the narrative changed abruptly over the weekend as Trump climbed down from his hostile rhetoric of the previous Friday, posting on social media “Don’t worry about China, it will all be fine!” Going full TACO, he referred to an “eternity” of time for discussions to make progress between now and his proposed 100% tariff imposition date of November 1st.

On the shutdown front and the data desert in particular, we learned that the CPI inflation report may be released on October 24th, but there was still no sign of the postponed Jobs Report for last month or even confirmation of any data-gathering taking place for the next one. As we entered the third week of this debacle, most federal workers went unpaid on Wednesday and chaos began to build at airports. The stakes are unquestionably getting higher by the day but betting markets continue to foresee a lengthy standoff.

Bond markets were closed for the holiday on Monday, but stocks were up and running and breathed a huge sigh of relief at Trump’s China flip-flop. After all, this is a $700 billion trading relationship. The indexes rebounded hard in New York to take a big bite out of Friday’s collapse. Further momentum was provided by Broadcom who became the latest firm to see their stock price jump on the announcement that they were leaping into bed with OpenAI.

Solid Q3 earnings reports and positive outlooks across the board from some of the big box banks on Tuesday were overwhelmed by China’s spiky response to Trump’s unstable and painfully obvious negotiating tactics. Wall Street didn’t like what it saw and stocks resumed their steep decline when markets opened, quickly giving back all of Monday’s gains.

In a major speech/Q&A, Fed chairman Powell skillfully walked the line between expressing inflation and employment concerns but the markets’ spirits were lifted by his perceived emphasis on a weakening labor market, which would imply further Fed Funds Interest Rate cuts in 2025 and stock prices roared back into the green before finally losing a bit of steam right at the end to finish slightly negative for what was a wildly volatile session.

Despite more US/China bickering (soybean and recycled cooking oil this time) including Treasury Secretary Bessent describing China as an untrustworthy partner and its chief negotiator as “unhinged”, stocks moved higher on Wednesday as more banks reported robust Q3 earnings and the announcement of a massive $40 billion+ data center deal involving multiple Big Tech/AI and financial firms.

The AI mega-trend seems to be alive and well according to Taiwan Semi Conductor (TSMC)’s sensational earnings report and forecast on Thursday. This helped juice a brief tech-driven spike in stocks to levels above where we were before Trump had his “100% China tariff” hissy fit the previous Friday and back to within spitting distance of more all-time record highs.

Enthusiasm swiftly waned, however, as we finally got a few earnings reports that failed to beat estimates and concerns grew about what JP Morgan’s Jamie Dimon called “cockroaches” in the private credit market and some rather disturbing real estate fraud revelations at regional banks Western Alliance (WA) and Zions. The indexes closed sharply lower, as did interest rates across the curve (see INTEREST RATES below).

Fears of any contagion in the banking sector seem somewhat misplaced right now as these incidents at WA and Zions look (for the moment at least) to be isolated and idiosyncratic, but Dimon’s “cockroaches” comment was hanging in the air as were other recent high-profile collapses (First Brands and Tricolor) and, as I have been banging on about for a while, with the indexes at these lofty levels it doesn’t take much in the way of potentially troubling news to cause Wall Street some agita and stocks stumbled out of the gate on Friday following down-sessions in Asia and Europe.

The anxiety didn’t last long however and the indexes recovered to close the day and the week higher as Trump called his own China tariffs “unsustainable”, his on-again/off-again meeting with premier Xi now looks like it might happen and Treasury Secretary Bessent will meet with his supposedly unhinged counterpart. Interest rates and the US Dollar continued to slide with the highly influential 10 year Treasury rate fleetingly dropping below 4.00%.

There were lots of news-driven big price swings last week but the background drumbeats are exactly the same. The US government remains shut down with no sign of any resolution, tariff chaos is alive and well, a Fed rate cut is still fully expected this month despite a lack of economic data visibility and AI exuberance remains intact. Absolutely nothing changed with any of these factors.

Indeed, if anything, AI enthusiasm is becoming a larger and larger reason that the market can afford to mostly ignore tariffs, labor markets, inflation, the shutdown and all the rest of it.

As long as the colossal level of AI capital expenditure endures, stocks can hold on. But AI is evolving into the lynchpin that is holding up markets and if doubts start to emerge about the stimulative power of AI for the entire economy, then investors may have to confront this less than ideal reality and sharp declines in stocks could result.

If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.

ARTICLE(S) OF THE WEEK ..

Two great articles this week, I couldn’t decide which one was better, so here are both ..

Ritholtz’s Callie Cox: It’s the bull market’s birthday! But all everyone seems to be wondering about is if “the grim reaper is sitting at the door of the nursing home waiting for his next victim”.

“We are currently in the stage of the cycle where many people conjure up reasons for why gold is so attractive because they cannot bring themselves to admit that they mainly like it because its price has gone up a lot.” Always ask yourself with any investment, why do I own this?

.. AND I QUOTE ..

“Few things are as valuable in personal finance as a good b******t detector.”

Morgan Housel

LAST WEEK BY THE NUMBERS:

Last week’s market color courtesy of finviz.com

Last week’s best performing US sector: Real Estate (two biggest holdings: Welltower, Prologis) ⬆︎ 3.3% for the week

Last week’s worst performing US sector: Financials (two biggest holdings: Berkshire Hathaway, JP Morgan) ⬌ flat for the week

* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price rose 1.7% last week, is up 13.4% so far this year and ended the week 1.4% below its all-time record closing high (10/08/2025).

* IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price rose 2.4% last week, is up 10.2% so far this year and ended the week 3.7% below its all-time record closing high (10/15/2025).

* VXUS, a Global Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price rose 2.8% last week, is up 25.9% so far this year and ended the week 1.1% below its all-time record closing high (10/06/2025).

INTEREST RATES:

* FED FUNDS * ⬌ 4.125% (unchanged)

* PRIME RATE ** ⬌ 7.25% (unchanged)

* 3 MONTH TREASURY ⬇︎ 4.00% (4.02% a week ago)

* 2 YEAR TREASURY ⬇︎ 3.46% (3.52% a week ago)

* 5 YEAR TREASURY ⬇︎ 3.59% (3.65% a week ago)

* 10 YEAR TREASURY *** ⬇︎ 4.02% (4.05% a week ago)

* 20 YEAR TREASURY ⬇︎ 4.58% (4.60% a week ago)

* 30 YEAR TREASURY ⬇︎ 4.60% (4.63% a week ago)

Data courtesy of the Federal Reserve and the Department of the Treasury as of the market close on Friday

* Decided upon by the Federal Reserve Open Market Committee at periodic meetings 8x a year. Used as…

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit simonbrady.substack.com

Fourth quarters have traditionally been very kind to stock markets, with half of the past decade’s returns typically coming in Q4s. Having said that, there was precisely zero progress towards ending the US government shutdown over the weekend. It still appears to be more of an annoyance than a crisis to politicians (and to Wall Street) but the feeling was that this was likely to change if this shambles goes on for an extended period.

Unlike in the US, there were plenty of political developments overseas. Asian stocks surged on Monday morning on the back of the appointment of a new Japanese prime minister but European markets dropped as the French lost theirs.

Wall Street was more excited about AMD inking a multi-billion dollar deal with OpenAI, with the former’s stock price rocketing by over 35% at the open before cooling off a bit later in the session. The indexes shifted higher again because, well why not? That’s what they do. Obviously, new record highs all round.

Dell became the latest tech firm to see its stock price spike on the back of cloaking itself in increased AI adoption on Tuesday, but the broad indexes finally showed signs of fatigue and even a touch of vertigo, finishing lower on the day and snapping the winning streak.

Whisper it softly, but there is a slowly growing anxiety among traders that the market may have been excessively rewarding the more speculative trades in AI-world which may be at risk of suddenly reversing in the case of even lightly disappointing news and it might make sense to take at least some chips off the table, particularly given that the start of the Q3 earnings season is upon us.

Trump used the threat of refusing to back-pay furloughed federal workers or actually firing many of them as a bargaining chip in the so-called shutdown “negotiations”, but the sense remained that the two sides are just shouting past each other and the betting markets continue to see no chance of any imminent resolution.

Stocks rebounded nicely on Wednesday morning with the US government taking more stakes in private companies, this time in the rare earth minerals space, as the move in the direction of an almost Soviet-style central planning via a taxpayer-funded sovereign wealth fund continued with Wall Street wondering; who’s next?

The minutes from the Fed’s last policy meeting released on Wednesday indicated that most officials still believe further interest rate cuts will be necessary throughout the rest of 2025. Nvidia boss Jensen Huang gave an upbeat AI “State of the Union” speech (shocker!).

The outcome was a return to new record closing highs for the S&P 500 for an astonishing 33rd time so far in 2025, a year that also includes a 19% fall in the index over a stretch of less than two months back in the spring. Interest rates dipped.

Exhaustion and vertigo kicked back in on Thursday and the indexes closed lower, even as the heavily-weighted Nvidia stock price reached its own new record high and Delta Airlines and Pepsi kicked off the Q3 earnings season with healthy reports.

Trump apparently got out of the wrong side of the bed on Friday. In addition to saying tough luck, there’s not enough money for food stamps for Americans (within hours of setting up a $20 billion bailout for Argentina) and starting to follow through on his threat of laying off federal workers, he also appeared to suddenly lose patience with the glacial pace of the China trade talks and lashed out by unleashing a 100% tariff, effective November 1st. He also called off his planned meeting with Chinese premier Xi.

Markets, already wavering, were severely rattled by the flare-up and and stocks tanked hard, having their worst day since their original tariff tantrum back in April.

I was attending a conference at the New York Stock Exchange on Friday and was on the floor watching stocks have their worst session in ages - coincidence? :-)

It seems entirely possible that these concerns could well spill into the coming week, but weekend events and news flow often have the habit these days of abruptly changing narratives by Monday morning, so who knows?

The past twenty government shutdowns have averaged a length of eight days. We’re well past that already this time. Indeed, the betting odds are already closing in on a 50% probability that this shutdown will be the longest in the nation’s history (the current record is 35 days).

We are entering a zone whereby we will have to begin to question the quality of October’s critically important economic data, even if it becomes available at all, thereby impacting the Fed’s ability to correctly read the tealeaves at its October 28th/29th Fed Funds interest rate-setting meeting.

While there’s still a background rumbling of worry that things are frothy and that trees don’t grow to the sky, fighting the upward momentum by selling (or even pausing buying) longer term holdings due to fears of a market fall has ended up being a disastrous strategy for three years now.

Timing the market doesn’t work because you simply can’t do it.

If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.

ARTICLE OF THE WEEK ..

It appears that Congress seems to think that hiding fund fees is good for you.

.. AND I QUOTE ..

“The timing [of buying gold] has to be almost perfect because the times in between gains are long and painful. A dollar invested in gold in 1928 would have grown to less than $13k by 2025; a dollar in the S&P 500 with dividends reinvested would have grown to nearly $1 million and Small Cap stocks to almost $5 million. Even corporate bonds would have done 4X as well as gold.”

Spencer Jakab, Wall Street Journal

LAST WEEK BY THE NUMBERS:

Last week’s market color courtesy of finviz.com

Last week’s best performing US sector: Utilities (two biggest holdings: NextEra Energy, Constellation Energy) ⬆︎ 1.5% for the week

Last week’s worst performing US sector: Energy for the second week in a row (two biggest holdings: Exxon-Mobil, Chevron) ⬇︎ 4.1% for the week

* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price fell 2.4% last week, is up 11.4% so far this year and ended the week 3.1% below its all-time record closing high (10/08/2025).

* IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price fell 3.3% last week, is up 7.6% so far this year and ended the week 4.3% below its all-time record closing high (10/06/2025).

* VXUS, a Global Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price fell 3.3% last week, is up 22.5% so far this year and ended the week 3.8% below its all-time record closing high (10/06/2025).

INTEREST RATES:

* FED FUNDS * ⬌ 4.125% (unchanged)

* PRIME RATE ** ⬌ 7.25% (unchanged)

* 3 MONTH TREASURY ⬇︎ 4.02% (4.03% a week ago)

* 2 YEAR TREASURY ⬇︎ 3.52% (3.58% a week ago)

* 5 YEAR TREASURY ⬇︎ 3.65% (3.72% a week ago)

* 10 YEAR TREASURY *** ⬇︎ 4.05% (4.13% a week ago)

* 20 YEAR TREASURY ⬇︎ 4.60% (4.69% a week ago)

* 30 YEAR TREASURY ⬇︎ 4.63% (4.71% a week ago)

Data courtesy of the Federal Reserve and the Department of the Treasury as of the market close on Friday

* Decided upon by the Federal Reserve Open Market Committee at periodic meetings 8x a year. Used as a basis for overnight interbank loans and for determining high yield savings interest rates.

** Wall Street Journal Prime Rate as of Friday’s close. Used as a basis for determining many consumer loan interest rates such as credit cards, personal loans, home equity loans/lines of credit, securities-based lending and auto loans.

*** Used as a basis for determining mortgage interest rates …

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit simonbrady.substack.com

As the end of the month and the quarter approached, Wall Street prepped over the weekend for a narrative likely to be dominated by tiresome government shutdown-related brinkmanship in Washington DC. Investors have generally been well-served by ignoring domestic politics. That was always going to be a difficult task last week.

The countdown to 12:01am ET on Wednesday began on Monday with stocks still hanging on to seemingly endless AI exuberance and the effects of mutual fund end-of-quarter window dressing, pushed tech and tech-adjacent prices higher to extend the previous Friday’s gains in the indexes.

Congressional leaders from both sides met with Trump and Vance on Monday in an attempt to find an off-ramp for the looming shutdown. Given the cast of characters involved, it was no surprise that the meeting was a complete fail and the nasty partisan blame game intensified (including an appalling social media deep-fake video). Betting markets immediately raised the odds of a shutdown from 75% to 89%.

Wall Street woke up to more new tariffs on Tuesday, the final day of the month and the quarter and Shutdown Eve. Timber, lumber and furniture were the latest victims and, by extension, the American homebuilding industry and Canada.

Stocks sank moderately to start the session with a shutdown assumption now firmly baked in. Some late dip-buying squeaked the indexes into the green by the close and complete a fifth straight month of gains and their best-performing September since 2010. Traders pulled up their lawn chairs to watch the pitiful, shabby events unfold in Congress.

The most powerful nation on earth had no fully-functioning government in place when financial markets opened on Wednesday. With the regular Jobs Report looking unlikely to be published as scheduled on Friday, the normally B-list ADP payrolls report took on greater importance and came in very soft, showing negative private sector job growth.

As institutional traders began to reconstitute their portfolios for what is historically a favorable final quarter, stocks finished higher and interest rates fell on the back of the Fed-rate-cut-friendly ADP data. Much to the relief of financial markets, Trump withdrew his nomination of unqualified Jan 6th rioter EJ Antoni, who once called social security “a Ponzi scheme”, for the role of head of the Bureau of Labor Statistics (BLS).

Wall Street continued to dance to the beat of its own music on Thursday while chaos reigned in the nation’s capital, with the S&P 500 and the NASDAQ breezing to more new all-time record highs based on the same old cheerfulness brought about by falling interest rate expectations and AI optimism, the gift that just keeps on giving. Healthcare stocks had a rare boost as Pfizer and Eli Lilly appeared to be coming to pricing agreements with the administration.

Jobs Report Day arrived on Friday with the stock indexes on a five-day winning streak but no Jobs Report. The data had already been collected, all that remained to be done was for someone at the BLS to hit the send button, but that didn’t happen and Trump refused to deem the agency as essential and thereby release the report as he had discretion to do. This led of course to conspiracy theories about whether he had had a sneak peek of the numbers and didn’t like what he saw.

Stocks shrugged it all off though and the indexes strolled pretty aimlessly along the flatline all day. The S&P 500 eked out the most miniscule of gains at the close but it was enough to technically record a sixth straight up-day and another all-time record high to cap a solid week.

The betting markets are confidently predicting the shutdown lasting until at least October 15th. One date to keep in mind is this coming Friday, October 10th, the next scheduled pay-day for federal workers. The heat could crank up considerably if that is missed and initial polling suggests that the country is already blaming Trump and his minions in Congress for this mess. The motivation to end the standoff might start to pick up at that point.

Bottom line, the shutdown isn’t going to alter the economic outlook or cause any sustainable market volatility unless we get into multi-month territory and it won’t, of itself, undermine the core bullish drivers of i) solid growth, ii) falling interest rates, iii) AI enthusiasm and iv) stable inflation.

It has already, however, started causing delays in the data and may impact further releases, such as the planned CPI inflation number on October 15th. Such an outcome would inject uncertainty into the Fed’s decision-making process, forcing it to fly blind in foggy skies at the rate-setting meeting on October 29th and that could potentially trigger unnecessary short-term market volatility.

If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.

ARTICLE OF THE WEEK ..

What actually happens in a government shutdown?

.. AND I QUOTE ..

With the shutdown in mind .. “Never put off until tomorrow what may be done the day after tomorrow” .

Mark Twain

LAST WEEK BY THE NUMBERS:

Last week’s market color courtesy of finviz.com

Last week’s best performing US sector: Healthcare (two biggest holdings: Eli Lilly, Johnson and Johnson) ⬆︎ 6.9% for the week

Last week’s worst performing US sector: Energy (two biggest holdings: Exxon-Mobil, Chevron) ⬇︎ 3.4% for the week

* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price rose 1.1% last week, is up 14.2% so far this year and ended the week at a new all-time record closing high.

* IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price rose 1.9% last week, is up 11.3% so far this year and ended the week at a new all-time record closing high.

* VXUS, a Global Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price rose 2.6% last week, is up 26.7% so far this year and ended the week at a new all-time record closing high.

INTEREST RATES:

* FED FUNDS * ⬌ 4.125% (unchanged)

* PRIME RATE ** ⬌ 7.25% (unchanged)

* 3 MONTH TREASURY ⬆︎ 4.03% (4.02% a week ago)

* 2 YEAR TREASURY ⬇︎ 3.58% (3.63% a week ago)

* 5 YEAR TREASURY ⬇︎ 3.72% (3.76% a week ago)

* 10 YEAR TREASURY *** ⬇︎ 4.13% (4.20% a week ago)

* 20 YEAR TREASURY ⬇︎ 4.69% (4.74% a week ago)

* 30 YEAR TREASURY ⬇︎ 4.71% (4.77% a week ago)

Data courtesy of the Federal Reserve and the Department of the Treasury as of the market close on Friday

* Decided upon by the Federal Reserve Open Market Committee. Used as a basis for overnight interbank loans and for determining high yield savings interest rates.

** Wall Street Journal Prime Rate as of Friday’s close. Used as a basis for determining many consumer loan interest rates such as credit cards, personal loans, home equity loans/lines of credit, securities-based lending and auto loans.

*** Used as a basis for determining mortgage interest rates and some business loans

AVERAGE 30-YEAR FIXED MORTGAGE RATE:

* ⬆︎ 6.34%

One week ago: 6.30%, one month ago: 6.45%, one year ago: 6.12%

Data courtesy of Freddie Mac Primary Mortgage Market Survey

INTEREST RATE EXPECTATIONS:

Where will the Fed Funds interest rate be after the next rate-setting meeting on October 29th?

* Unchanged from now .. ⬇︎ 4% probability (8% a week ago)

* 0.25% lower than now .. ⬆︎ 96% probability (92% a week ago)

With two more Fed rate-setting meetings left in 2025, what is the most commonly-expected number of remaining 0.25% Fed Funds interest rate cuts this year?

* ⬌ Two (unchanged from a week ago)

Data courtesy of CME FedWatch Tool

All data based on the Fed Funds interest rate (currently 4.125%). Calculated from Federal Funds futures…

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Following a mostly meaningful news-free weekend, markets headed into the last full week of September, historically the worst week of the year for stock prices, with lots of Fed governor speeches lined up including from the president’s manservant Stephen Miran and chairman Powell along with a potentially spicy UN General Assembly (UNGA) in New York and developing concerns about an imminent US government shutdown.

Even so, the S&P 500 and the NASDAQ still managed to push deeper into all-time high territory for a third session in a row on Monday after Nvidia, the indexes’ largest component stock, touched its own new record high price after announcing a $100 billion investment in OpenAI.

Miran parroted all of the president’s talking points about implementing a series of jumbo Fed Funds Interest Rate cuts while implausibly denying that the administration was exercising any influence on him. Trump drew a totally unfounded causal link between child autism and pregnant women’s use of Tylenol and some healthcare stocks wavered in response to the absurd claim that was quickly refuted by medical experts from the US and around the world.

Markets paused for breath on Tuesday morning, awaiting any signals from Powell’s lunchtime speech. As a warm up act, Trump gave his UN audience the big middle finger in a meandering, largely fact-free rant at the UNGA.

More importantly for financial markets, Powell reiterated in his address that there was no risk-free path forward when it comes to interest rate policy and seemed to place equal weight on both inflation and unemployment risk. He also called the stock market “highly valued” and gave no firm assurances of continued rate cuts. Disappointed traders took the indexes substantially lower, driving down tech stocks in particular.

A generally quiet day on the news front on Wednesday provided the opportunity for more profit-taking in the tech sector after the recent run-up. Although a government shutdown would still be more of a political stunt than a market-impacting event, the ever-increasing prospect was starting to unnerve Wall Street, particularly the possibility that the Jobs Report may not even be released this week as a result and the indexes all closed in the red.

Stocks continued their retreat from all-time highs on Thursday after GDP growth was confirmed to be at its highest level for two years, a scorching hot 3.8% for Q2 and jobless claims remained tame, both undermining the case for giant Fed rate cuts to rescue the country from a seemingly non-existent imminent economic disaster.

After the close, Trump - who just weeks ago promised to bring down consumer healthcare costs - decreed a 100% tariff on all imported branded pharmaceutical products beginning on October 1st along with additional levies on another batch of goods from trucks to high national security-risk items such as kitchen cabinets and bathroom vanities.

Wall Street, always a TACO believer, mostly shrugged off the announcement on Friday and was focused more on the PCE inflation reading which came in hovering close to 3.0% as expected and another decline in consumer sentiment. The absence of a nasty upside surprise in the inflation data cheered the stock market and the indexes snapped their three day losing streak but still experienced a small weekly loss for the first time this month.

Market-driven interest rates have only moved upwards since the Fed rate cut on September 17th and this phenomenon persisted last week (see INTEREST RATES below) and mortgage rates have now turned back higher after weeks of consistently dropping (see below).

Last week’s moderate pullback notwithstanding, why have stocks been sizzling while economic conditions feel so depressed for many? There is a powerful three-way tailwind that has sent the indexes to new highs, favoring certain sectors and confirming the accurate old adage that the stock market is not the economy.

* Monetary stimulus through ongoing Fed overnight interest rate cuts and hopes that market-driven rates will follow suit further out on the curve

* Fiscal stimulus that was solidified and boosted by the tax and spending bill but which only works if there is strong and persistent economic growth

* Private stimulus from continued AI enthusiasm and massive related capital expenditure from a handful of companies that are showing consistently strong earnings

As long as this trinity of stimuli remains in place (not guaranteed by any means), there is currently little reason to fear the imminent death of the rally.

However, if growing tariff-fed inflation starts to cramp the Fed’s style when it comes to rate cuts and/or if growth starts to slow and/or if doubts emerge about AI adoption and the associated cap-ex and earnings start to tail off, then the stock market will suddenly be very vulnerable to a pullback or worse and that should not be ignored amidst the currently highly bullish sentiment.

If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.

ARTICLE OF THE WEEK ..

150 years of the 60/40 stock/bond portfolio. “The point isn’t how much the 60/40 grew, it’s how much it didn’t lose during downturns”.

.. AND I QUOTE ..

“I want for AI to do my laundry and dishes so that I can do art and writing, not for AI to do my art and writing so that I can do my laundry and dishes.”

Joanna Maciejewska, author

LAST WEEK BY THE NUMBERS:

Last week’s market color courtesy of finviz.com

Last week’s best performing US sector: Energy (two biggest holdings: Exxon-Mobil, Chevron) ⬆︎ 3.9% for the week

Last week’s worst performing US sector: Materials (two biggest holdings: Linde, Newmont) ⬇︎ 2.2% for the week

* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price fell 0.3% last week, is up 12.9% so far this year and ended the week 0.8% below its all-time record closing high (09/22/2025).

* IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price fell 0.7% last week, is up 9.2% so far this year and ended the week 2.4% below its all-time record closing high (09/18/2025).

* VXUS, a Global Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price fell 0.5% last week, is up 23.5% so far this year and ended the week 2.0% below its all-time record closing high (09/22/2025).

INTEREST RATES:

* FED FUNDS * ⬌ 4.125% (unchanged)

* PRIME RATE ** ⬌ 7.25% (unchanged)

* 3 MONTH TREASURY ⬇︎ 4.02% (4.03% a week ago)

* 2 YEAR TREASURY ⬆︎ 3.63% (3.57% a week ago)

* 5 YEAR TREASURY ⬆︎ 3.76% (3.68% a week ago)

* 10 YEAR TREASURY *** ⬆︎ 4.20% (4.14% a week ago)

* 20 YEAR TREASURY ⬆︎ 4.74% (4.71% a week ago)

* 30 YEAR TREASURY ⬆︎ 4.77% (4.75% a week ago)

Data courtesy of the Federal Reserve and the Department of the Treasury as of the market close on Friday

* Decided upon by the Federal Reserve Open Market Committee. Used as a basis for overnight interbank loans and for determining high yield savings interest rates.

** Wall Street Journal Prime Rate as of Friday’s close. Used as a basis for determining many consumer loan interest rates such as credit cards, personal loans, home equity loans/lines of credit, securities-based lending and auto loans.

*** Used as a basis for determining mortgage interest rates and some business loans

AVERAGE 30-YEAR FIXED MORTGAGE RATE:

* ⬆︎ 6.30%

One week ago: 6.26%, one month ago: 6.57%, one year ago: 6.08%

Data courtesy of Freddie Mac Primary Mortgage Market Survey

INTEREST RATE EXPECTATIONS:

Where will the Fed Funds interest rate be after the next rate-setting meeting on October 29th?

* Unchanged from now .. ⬆︎ 12% probability (8% a week ago)

* 0.25% lower tha…

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit simonbrady.substack.com

Trump piled the pressure on the Fed over the weekend, barking that he expected a “big cut” from the central bank after their meeting on Wednesday. Market-driven expectations remained above 90% that the Fed Funds Interest Rate would be lowered by a quarter of a point, as the committee prioritizes addressing a cooling labor market even while sticky inflation complicates the picture. Traders were also prepping to take a close look at the quarterly “Dot Plot” update of economic and interest rate forecasts.

Once markets opened on Monday, Alphabet/Google joined juggernauts Nvidia, Microsoft and Apple in the $3 trillion+ valuation club and the tech giants pulled the indexes higher with the S&P 500 and NASDAQ reaching their 25th and 26th (respectively) new all-time record highs of the year.

To the surprise of absolutely no-one, Senate Republicans obediently fell in line behind their chief on Monday night, merrily waving through Trump’s controversial pick for “on-loan” Fed governor Stephen Miran just in time for the White House advisor to take a seat on the central bank interest rate-setting committee the very next day as the president’s personal fox in the henhouse.

Also in attendance was governor Lisa Cook after the administration’s frantic attempt to have her forcibly removed from the meeting for supposed mortgage fraud was tossed out in court. The cause was not helped by the revelation that Trump loyalist, Treasury Secretary Scott Bessent, appears to have an identical situation with his own mortgage applications, which were for about 30x the amount of Cook’s.

Pre-market on Tuesday, Wall Street got the latest Retail Sales figures to chew on which showed much more resilience than expected from the US consumer. As the old saying goes; “don’t stand between an American and a cash register”. A few chips were taken off the table right ahead of Fed Day and the indexes quietly went nowhere.

The date that’s been circled on many calendars for a long time finally arrived on Wednesday. As anticipated, ​officials cut the Fed Funds interest rate by a quarter of a percent to a 4.125% mid-point. Parachuted-in governor Miran was a lonely “Billy-No-Mates” in the room as literally no-one joined him in dissenting from the “only” quarter-point cut decision. Powell’s press conference failed to produce any fireworks.

The Dot Plot showed that the median assumption on the committee was for two more quarter point reductions over the course of the two remaining meetings this year, although there was a lot of dispersion of opinion with seven of the nineteen members predicting no more cuts at all in 2025. The Fed is essentially sending two credible messages at the same time. Yes, the median dot implies two more cuts this year, but the dot distribution says those cuts need to be earned by the data, especially upcoming jobs and inflation numbers.

It was all a bit of a yawn for stock markets, which lost a little ground with some rate cut-hungry traders slightly disappointed by the fact that the only support for anything more than a quarter-point reduction came from the president’s own hand-picked man on the inside.

The announcement that Nvidia will join the US government in taking a stake in Intel sparked another steep AI-driven rally on Thursday, although the deal was largely viewed as having Trump’s fingerprints all over it. Intel’s stock price jumped 30% at the open and the S&P 500 and the NASDAQ comfortably reclaimed more new all-time record highs by the close where they were finally joined by the Russell 2000 Small Cap Index which, after years in the wilderness, reached its first new record close since November 2021.

It was more of the same on Friday with stocks moving onwards and upwards to close out a very solid week in spite of a third Russian incursion into NATO territory (Estonia this time) and the US lurching closer to an October 1st government shutdown after nonsensical Congressional petty bickering scuppered a deal.

Even though last week’s Fed decision on its overnight rate had no direct effect on mortgage rates (which pivot off the market-driven 10-year Treasury rate, which actually moved higher last week - see INTEREST RATES below), it did result in an immediate cut in the interest rate paid by most cash instruments like money market accounts, CDs and high yield savings accounts (see my newly-updated post CASH IS STILL INTERESTING) as well as a 0.25% reduction in the Prime Rate.

The fact that the US central bank was prepared to cut rates (thereby potentially stimulating inflation) even while CPI is running at basically 3% casts some doubt on how seriously the Fed is going to take its self-imposed 2% inflation target level (which hasn’t been accomplished in over five years) going forward.

The likelihood now seems to be that, over the next several months and quarters, we will find ourselves in a run-hot economy characterized by elevated economic growth, continued AI enthusiasm but potentially lively inflation and of course an endless supply of bonkers out-of-left-field surprises.

If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me.

ARTICLE OF THE WEEK ..

“Investing and reinvesting can be hard, it’s confusing, it’s uncomfortable. But you need to do it for your future well-being.” Ritholtz’s Callie Cox on why you likely can’t just W2 your way to wealth.

.. AND I QUOTE ..

"The stock market is a device for transferring money from the impatient to the patient."

Warren Buffett

LAST WEEK BY THE NUMBERS:

Last week’s market color courtesy of finviz.com

Last week’s best performing US sector: Technology for the second week in a row (two biggest holdings: Nvidia, Microsoft) ⬆︎ 3.0% for the week

Last week’s worst performing US sector: Real Estate (two biggest holdings: Prologis, Welltower) ⬇︎ 1.2% for the week

* SPY, a US Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. Its price rose 1.0% last week, is up 13.2% so far this year and ended the week at a new all-time record closing high.

* IWM, a US Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. Its price rose 2.0% last week, is up 10.0% so far this year and ended the week 1.0% below its all-time record closing high (09/18/2025).

* VXUS, a Global Non-US ETF, tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. Its price was unchanged last week, is up 24.1% so far this year and ended the week 1.5% below its all-time record closing high (09/18/2025).

INTEREST RATES:

* FED FUNDS * ⬇︎ 4.125% (4.375% a week ago)

* PRIME RATE ** ⬇︎ 7.25% (7.50% a week ago)

* 3 MONTH TREASURY ⬇︎ 4.03% (4.08% a week ago)

* 2 YEAR TREASURY ⬆︎ 3.57% (3.56% a week ago)

* 5 YEAR TREASURY ⬆︎ 3.68% (3.63% a week ago)

* 10 YEAR TREASURY *** ⬆︎ 4.14% (4.06% a week ago)

* 20 YEAR TREASURY ⬆︎ 4.71% (4.65% a week ago)

* 30 YEAR TREASURY ⬆︎ 4.75% (4.68% a week ago)

Data courtesy of the Federal Reserve and the Department of the Treasury as of the market close on Friday

* Decided upon by the Federal Reserve Open Market Committee. Used as a basis for overnight interbank loans and for determining high yield savings interest rates.

** Wall Street Journal Prime Rate as of Friday’s close. Used as a basis for determining many consumer loan interest rates such as credit cards, personal loans, home equity loans/lines of credit, securities-based lending and auto loans.

*** Used as a basis for determining mortgage interest rates and some business loans

AVERAGE 30-YEAR FIXED MORTGAGE RATE:

* ⬇︎ 6.26%

One week ago: 6.35%, one month ago: 6.58%, one year ago: 6.09%

Data courtesy of Freddie Mac Primary Mortgage Market Survey

INTEREST RATE EXPECTATION…

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit simonbrady.substack.com