Good morning,
Last Friday’s market action did little to change the broader narrative for the week. A steady stream of market-moving catalysts—Fed commentary, tariff headlines, and 5 Mag-7 earnings—brought some mild volatility, but the week ultimately ended with modest gains across all major indices. Those small gains were enough to push every major index except the Russell 2000 (small caps) to new all-time highs.
Meanwhile, the government shutdown reached 31 days on Friday and, by Wednesday, will officially become the longest on record. If the equity market is worried, it certainly has a funny way of showing it.
This would normally be an employment-data week, capped by Friday’s all-important nonfarm payrolls report. Given the shutdown, that release seems unlikely, leaving investors to rely on higher-frequency and private data—such as Wednesday’s ADP report—to barely keep a finger on the pulse of the U.S. labor market. Many economists, and even the Fed, are concerned about slowing growth without a clear line of sight into any slowdown.
Earnings season also rolls on. So far, 317 of the S&P 500 companies have reported, with 67% beating on revenue and 82% on earnings. Revenue growth is tracking at +8.44%, while earnings per share are up +10.34% year-over-year.
While several notable reports are still ahead this week, none come from the Magnificent Seven. Combined with the lack of government data, the result may be a quieter stretch—perhaps even a setup for a modest market pullback.
As we begin the final chapter of the year, the bull market still appears intact, though clearly in its later stages. The primary trend remains upward, and both seasonality (historically positive into year-end) and not-yet-euphoric sentiment suggest there’s still room for equities to run.
Be well,
Mike
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