U.S. Indexes closed the final session of the week mixed, with the tech-heavy Nasdaq 100 (-0.4%) lagging, and the small-cap Russell 2000 (+0.7%) outperforming. The former was weighed on by weakness in NVDA, AMZN, META, TSLA, and PLTR, which saw large-cap sectors Consumer Discretionary, Communication Services, and Technology as the only sectors in the red. Utilities and Health were the clear outperformers. Newsflow was very thin on Friday, with ISM Services and Fed speak the highlights given the postponement of the US payrolls report due to the US government shutdown. ISM Services disappointed on the headline and fell to 50.0 (exp. 51.7, prev. 52.0) and beneath the bottom end of the forecast range. Business activity and new orders tumbled, with the latter into contractionary territory, while employment and prices paid both ticked incrementally higher. The Dollar was lower with NZD and GDP the G10 outperformers, while the Japanese Yen lagged amid Ueda comments overnight. Treasuries were weaker across the curve as newsflow/data failed to have a lasting impact on direction. The crude complex saw gains, but still ended the week notably in the red ahead of the OPEC meeting yesterday, whereby the latest source reports noted OPEC+ is set for a further oil output increase, although the size is still unclear. Spot gold firmed but could not breach $3900/oz to the upside. The ISM Services PMI was soft, the headline fell to 50.0 – the line between contraction and growth – from the 52.0 reading in August, and below the 5.17 consensus, and also beneath the most pessimistic analyst forecast. The drop in the headline was led by a hit to new orders, falling to 50.4 from 56.0, while business activity fell to 49.9 from 55.0. The prices paid remained elevated at 69.4 while employment remained in contractionary territory at 47.2, above the prior 46.5. Within the report, it noted “Commentary in general indicated moderate or weak growth, with more isolated observations of supplier delivery challenges. Employment continues to be in contraction territory, thanks to a combination of delayed hiring efforts and difficulty finding qualified staff.” Due to the Government agency-produced data being on pause at the moment due to the shutdown, Federal Reserve officials will have to rely on private market data to get a temperature check on the economy. As such, Oxford Economics adds that neither the ISM nor ADP reports this week paint a particularly robust picture of the labour market; With all measures of employment pointing to contraction, an October rate cut seems locked in. Fed Governor Miran said access to data is important to making policy and is hopeful Fed will have the needed data by next FOMC; Fed policy should be forward-looking. Re. inflation expects serious disinflation in services inflation due to housing and population shifts and adds that inflation expectations are reasonably well anchored; does not expect broad-based inflation increase after tariffs. On rates, the real neutral rate is about 0.5% and does not think the position on the neutral rate is extreme, just wants to get there faster. The method of using backwards-looking data is misguided, and financial conditions may not give a good read for Fed policy. Fed Member Goolsbee when asked about the lack of data, said the Chicago Fed employment measure (released 2nd Oct) tracks unemployment at 4.3%, which was unchanged M/M and in line with analyst expectations for the delayed official BLS report. Chicago Fed President said market expects cuts, Fed will act on data; uptick in services inflation is probably not from tariffs and reiterated he is wary about front-loading rate cuts. On the potential lack of data given the Government shutdown, he remarked that there are a lot of private sector gauges on the labour market, but not so much for inflation. Finally, Fed Member Logan is worried about non-housing services inflation that has been elevated and stuck there. She acknowledged that there are also upside risks to good prices even after the tariff effect fades. The 2026 voter described policy as likely just modestly restrictive. Risks that tariff effects are more prolonged raise the risk of a rise in long-term inflation expectations. Elsewhere, Oil closed higher by 0.66% while Gold ended Friday’s session with a gain of 0.5%.
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For anyone following my Platinum Service it made 140 points yesterday and is now ahead by 630 points for October after closing September with a gain of 3774 points after ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
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