Recent decreases in interest rates have led to a 9.2% increase in US mortgage applications compared to the same time last year, according to the latest data from the Mortgage Bankers Association (MBA). This trend suggests a stronger mortgage market this year compared to 2024. “The drop in rates has ignited the highest week of borrower interest since 2022, with both purchase and refinance applications on the rise,” stated Joel Kan, the MBA’s vice president and deputy chief economist.
Shifting investment portfolios toward global equities outside the US has yielded impressive results this year, based on a selection of ETFs as of September 9. Although US stocks have regained some leadership in recent months, foreign stocks are still outperforming their American counterparts on a year-to-date basis.
US employers added 911,000 fewer jobs over the 12 months leading up to March, based on preliminary data from the Labor Department. This annual revision indicates that job growth has been slower than previously thought. “The decelerated pace of job creation suggests that income growth may have also diminished even before recent rises in policy uncertainty and economic slowdown since spring,” noted Oren Klachkin, market economist at Nationwide Financial. “This may provide the Federal Reserve with more reason to resume its cutting cycle.”
The Federal Reserve is widely anticipated to lower interest rates during its policy meeting scheduled for September 17. The question remains: will Thursday’s report on consumer inflation for August influence this decision?
The NFIB Small Business Optimism Index increased in August, surpassing the 52-year average. “Optimism rose modestly in August, with more owners anticipating stronger sales and improved profitability,” commented NFIB Chief Economist Bill Dunkelberg. “While owners report an overall improvement in business conditions, labor quality continues to be the primary concern on Main Street.”
If global markets were to maintain their current prices through New Year’s Eve, the year would be recorded as a significant and broad bull market for 2025. The key question is whether this state of near-perfection can be sustained throughout the fourth quarter.
The US non-farm payrolls experienced a disappointing increase in August, falling short of projections. This lackluster growth has raised concerns about a slowing economy, leading many to anticipate that the Federal Reserve will cut interest rates during its upcoming monetary policy meeting on September 17. “The job market is faltering before it takes off,” said Daniel Zhao, chief economist at job platform Glassdoor. “The labor market lacks momentum, and the August report, along with downward revisions, indicates we are facing challenges ahead without achieving a soft landing.”
● The Fractured Age: How the Return of Geopolitics Will Splinter the Global Economy
Neil Shearing
Interview with the author via Financial Times
Contrary to popular belief, US President Donald Trump’s policies are symptoms rather than causes of the disintegration of globalization. In a discussion with Peter Foster, the Financial Times’ world trade editor, Neil Shearing, group chief economist at Capital Economics and author of *The Fractured Age*, examines how the economic rivalry between the US and China is reshaping global trade dynamics.
Is the stock market exhibiting signs of being overbought? The concise answer is yes. However, it is worth noting that several indicators have suggested this throughout the summer, yet the market has continued to ascend. Therefore, short-term timing decisions remain tricky. Nevertheless, let’s explore the indicators suggesting that the market may be approaching its peak.
In August, hiring at US companies slowed to 73,000 jobs added, missing expectations. “The year began with strong job creation, yet that momentum has been disrupted by various factors,” said Dr. Nela Richardson, chief economist at ADP. “The slowdown in hiring can be attributed to labor shortages, hesitance among consumers, and disruptions caused by AI.”
