To The Moon

Last week, a few US ‘important’ economic reports were released together with Fed’s most referenced, the Personal consumption expenditure (PCE) report . Over all, they provided glimpses of a slowing US economy but not necessary recession or stagflation yet. Last Week’s Reports. (1) US Flash S&P Services PMI. On 23 Sep 2025, preliminary S&P US Services PMI report (for September 2025) fell to 53.9 from August 2025’s 54.5; marking the softest expansion since June. Slowdown was driven by weaker domestic demand despite some rebound in export business, while firms continued to add to payrolls but faced challenges filling vacancies. Inflation pressures remained elevated, nearing a 27-month high, but businesses moderated price hikes due to weaker demand expectations, with sentiment improving to its highest since May. (2) US Flash S&P Manufacturing PMI. S&P US Flash Manufacturing PMI “preliminary’ report for September 2025, was also released on the same day. It fell to 52.0 from August’s 53.0, signaling an improvement of factory business conditions for the 8th time in the past 9 months. Average manufacturing PMI reading for Q3 2025 was slightly below that of Q2 2025. Production rose for a 4th consecutive month, albeit to a lesser degree. While new orders rose for a 9th straight month with marginal increase only. (3) US New Home Sales. Sales of new single-family homes in US for August 2025, surged by +20.5% to a seasonally adjusted annual rate of 800,000 units. This was the fastest pace since January 2022. This sharp increase was driven primarily by (a) builders offering significant discounts and (b) promotional incentives to attract buyers amid an excess supply of new homes. Despite the rise, broader housing market activity remains restrained due to affordability challenges and a weakening labour market. Given that interest rate (in August 2025) had not been cut yet, it’s curious that August sales jumped so high. Part of the answer may be in the survey itself. Therefore, may need to wait for revisions next month and the September data point to see if this is smoothed out. (4) US Gross Domestic Product (GDP). On 25 Sep 2025 - the 3rd & final report on US economy was released. For Q2 2025, gross domestic product (GDP) grew at an annualized rate of 3.8% . This marked the fastest pace since late 2023. This upward revision from previous estimate of 3.3% was largely driven by (1) stronger consumer spending and (2) reduction in imports. Despite robust growth, ongoing uncertainties including tariffs and slowing labour market momentum suggest cautious optimism for the quarters ahead. (5) Jobless Claims. Jobless claims also present an improved outlook on US labour market. (a) Weekly. For week ended 20 Sep 2025, US weekly jobless claims fell by 14,000 to 218,000 vs market estimates of 233,000 vs 13 Sep 2025’s claims of 232,000. This is the lowest level since mid-July. Drop signals continued resilience in the labour market despite growing concerns over slower hiring and workforce reductions. Meanwhile, claims by federal government workers rose slightly, reflecting targeted adjustments within government employment. (b) Continuing. For week ended 13 Sep 2025, US continuing claims that gauge the size of total unemployed population, came in at 1.93 million. This is down slightly (less 2,000 claims) from a week earlier. It also marked the lowest level since late May 2025, signaling that fewer individuals remain on unemployment benefits after their initial claims. The insured unemployment rate held steady at 1.3%, indicating relative stability in ongoing joblessness. US Labour Market - Summary. Overall, above numbers suggest some easing in US labour market slack, even as hiring momentum moderates. In retrospect, job creation has slowed sharply since the start 2025, yet the unemployment rate has climbed only modestly, a situation Fed Chair Jerome Powell has called "a curious kind of balance." Economists have attributed the weakening in payroll growth both to cooler demand for workers and to a smaller pool of available hands as the White House cracks down on immigration. So far, weaker hiring hasn't meant a big rise in layoffs. Still many economists worry that as hiring sputters, further economic softening could prompt more layoffs quickly. (6) Personal Consumption Expenditure. Last report of the week was US Fed’s reference personal consumption expenditure (PCE) inflation report. For the month of August 2025, US inflation under different categories were: Headline PCE: Monthly: 0.3% vs estimates of 0.3% vs July 2025’s 0.2%. Annual: 2.7% vs estimates of 2.7% vs July 2025’s 2.6%. Core PCE: Monthly: 0.2% vs estimates of 0.2% vs July 2025’s revised 0.2%. Annual: 2.9% vs estimates of 2.9% vs July 2025’s 2.9%. 3 of 4 readings were aligned with market consensus except for headline annual inflation rate (2.7%) that has a slight increase (+0.01%) from July’s reading of 2.6%. As a result all 3 US composite indexes staged a mini-recovery of sort on Friday, recovering grounds lost over the past 3 days. What’s Next ? As we head into a new trading week where September tails off into October 2025, focus returns to US Job market again. Tue, 30 Sep 2025 - Jobs opening and labour turnover surveys (JOLTs). Tue, 30 Sep 2025 - Consumer confidence index. Wed, 01 Oct 2025 - ADP non-farm payroll. Wed, 01 Oct 2025 - S&P final US manufacturing PMI. ** Report will show if US domestic manufacturing will continue to pick up speed or remains flat for September 2025. Thu, 02 Oct 2025 - Jobless claims [weekly & continuing]. Fri, 03 Oct 2025 - US non-farm payroll. **Report’s outcome will determine if another interest cut will be on the card when FOMC convenes on Oct 28-29. Market Catalyst. If there is any event that will affect US market in the new week, it will be the possibility of US government shutdown due to lack of funds to keep it going. (see below) Congressional deadlock between US 2 political parties (Republicans & Democrats) over bipartisan spending agreement; has raised a strong risk of a partial or full government shutdown. The Trump administration threatens significant federal layoffs and a new approach to reducing funded programs. Lawmakers face pressure but show little sign of compromise, keeping political risk elevated. This shutdown could (a) delay key economic data releases, (b) disrupt federal services, and (c) create market uncertainty. Everything hinges on Mon, 29 Sep 2025 as the top 4 congressional leaders (Mike Johnson, John Thune, Hakeem Jeffries and Chuck Schumer) will meet with Trump at the White House. Market Behaviour During Shutdown For Trump, a government shutdown is not the end of the world. Instead, it will be a case of déjà vu for him. This is because he has allowed it to take place during his first presidential term. It started on 22 Dec 2018 and ended on 25 Jan 2019, lasting 35 days - the longest government shutdown in US history. (see below) The shutdown contributed to increased investor anxiety and market decline in December 2018. Fortunately, US market managed to stage a partial recovery during the shutdown period. Reflecting a pattern where shutdowns tend to cause short-term volatility rather than prolonged downturns unless compounded by other factors. Will US market endure the same volatility again on 01 Oct 2025 ? All shall be revealed after Mon, 29 Sep 2025 meeting at the White House. Do you have a Plan B ready for execution. just in case ? Remember to check out my other posts. (See below). Help to Repost ok, Thanks. Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks. VRT is still a "Cool" Buy, Citibank says ! Wed, 24 September. Pick post. BBAI Breakout with Goldman Sachs' Buy ? Tue, 23 September. Pick post. Fed's Cut Started, Here's 3 Stocks to Buy ! Tue, 23 September. Pick post. Do you think history will repeat itself in a 2nd govt shutdown under Trump? Do you think US market will be able to remain strong & table during this turbulent time? If you find this post interesting, give it wings! ️ Repost and share the insights ? Do consider “Follow me” and get firsthand read of my daily new post. Thank you. @Daily_Discussion @TigerPM @TigerStars @Tiger_SG @TigerEvents