An unexpected comment from President Trump on Friday highlighted a shift in market sentiment, reminding investors of the inherent risks and uncertainties that still lurk beneath the surface. Despite prior perceptions of stability, the remark reignited fears of potential panic in the financial landscape.
The breakeven employment level in the US — the monthly job growth needed to maintain a balanced labor market — has seen a significant decline following changes in immigration policies, according to a researcher at the Dallas Fed. They suggest: “A recent, high-frequency estimate of break-even employment reveals that a dramatic shift in immigration trends, combined with cyclical adjustments in labor force participation, has resulted in the monthly requirement dropping from approximately 250,000 in 2023 to around 30,000 by mid-2025.”
● The Art of Spending Money: Simple Choices for a Richer Life
Morgan Housel
Q&A with author via Kiplinger
Q: How is spending money considered an art?
A: It’s an art because it’s not a science. I wish I could deliver a straightforward formula that works for everyone, but that doesn’t exist. What brings me joy in spending may not resonate with you, and vice versa. Some might find it discouraging that I’m primarily outlining the psychology of spending money. Ultimately, you must navigate this on your own because I don’t know your life experiences. I’m still in the process of figuring this out myself.
The ongoing government shutdown is postponing the release of economic reports. Nevertheless, the latest available data continues to point towards solid growth in the upcoming third-quarter GDP report, according to median estimates compiled by CapitalSpectator.com. However, as the shutdown extends, uncertainty will grow as the nowcast inputs degrade and fail to reflect recent economic fluctuations.
According to analysis from Moody’s Analytics, one-third of US state economies are contracting, while another thirteen states are stagnating. Two major states influencing US GDP, California and New York, are on the brink of recession. “These two states are struggling. Their economic decline could potentially drag the national economy into recession,” predicts Moody’s chief economist, Mark Zandi.
While the recent stock market rally has mainly focused on AI-driven growth in major tech companies, a notable trend has emerged among micro-cap stocks. These smaller firms have been consistently outperforming their larger counterparts in the past few weeks, quietly standing out in contrast to the prevalent Wall Street enthusiasm surrounding tech giants.
Recent Federal Reserve minutes indicate that officials are considering further interest rate cuts this year, citing weaknesses in the labor market. “In the context of monetary policy, nearly all participants highlighted the Committee’s readiness to respond promptly to evolving economic conditions with a reduction in the federal funds rate target range,” the minutes revealed. Notably, the US 2-year Treasury yield is currently trading near its lowest level for the year.
This year has seen a remarkable rally lifting all major asset classes, yet beneath this surface positivity lies a diverse range of underperforming assets. Contrarians and value investors can uncover potential opportunities by examining certain ETFs that have struggled, despite the overall positive market trend noted by closing prices as of October 7.
Global trade is set to grow more than earlier projections indicated in 2025, yet the forecast for next year suggests a modest 0.8% rise, according to the World Trade Organization. The organization warns that trade growth is likely to slow in 2026 due to the cooling global economy and the introduction of new tariffs.
The technology sector’s dominance remains a powerful force in the stock market, particularly as we transition into the fourth quarter. A variety of ETFs demonstrate that leading tech firms continue to propel market momentum, based on trading data through October 6.
