To The Moon

🌟🌟🌟The US markets fell today with the S&P500 dropping the first time in 8 days.  The US government shutdown and delayed economic data added the pressure.  Spot Gold surged past USD 4,000 as a safe haven refuge.

Will the Fed cut interest rate in October?

Investors are pricing in a 95% chance of a 25 bps rate cut at the Fed's October 28 to 29 meeting.  This is according to the CME Fed Watch tool.  That is up from just 52% probability in September.  The markets also see an 85% probability of another cut in December.  This will bring the rates to 3.5% to 3.75% by the end of 2025.

The Fed cut its rate by 25 bps to 4.00% - 4.25% at its September meeting.  However policymakers were narrowly split on the rest of the year with 10 officials projecting 2 more rate cuts while 9 officials are seeing 1 or no additional reductions.

The US government shutdown has closed the Bureau of Labor Statistics and delayed the release of the September jobs report.   With 750, 000 federal workers furloughed, the Bureau of Labor Statistics is offline.  No jobs data.  No CPI.  The Fed is flying blind. 

Without the official jobs report, the economic picture has become unclear. 

However a recent report from ADP payroll processor has reported that private employers shed 32,000 jobs in September.  This has painted a weaker picture of the labour market than what economists expected. 

This abrupt slowdown in the private  sector is a warning flag and may indicate to the Fed that it needs to continue to cut interest rate.

Yet inflation remains sticky.  The personal consumption expenditures Index or PCE (the Ged' preferred measure) rose 2.7% year over year in August.  Core inflation was 2.9% over the same period.  Both figures remain above the Fed's 2% target.

Trump's tariffs is not helping.

How To Invest in This Market of Uncertainty :

Anchor to Conviction, Not Headlines : 

Avoid reactive trades.  Volatility tempts action but often the wisest move is to pause and reflect. 

Build Resilience :

Diversify across asset classes : Blend good quality ETFs and stocks with gold, bonds and cash equivalents.

Defensive sectors : Healthcare, utilities and consumer staples tend to weather volatility better.

Use Volatility as Opportunity :

Accumulate great quality stocks  such as $NVIDIA(NVDA)$  $Microsoft(MSFT)$  and $Alphabet(GOOG)$  to build your position during dips.

Spot Gold Shines in the Fog :

With Spot Gold Prices hitting USD 4000/oz, buy $SPDR Gold Shares(GLD)$  to use as a hedge.

Concluding Thoughts 

The Fed may cut rates this October.  Gold is glowing.  Tariffs are tightening.  The Fed Shutdown has silenced the data. 

But I am not chasing headlines because I invest for the long term.   I let the power of compounding work its quiet magic.

Investing is after all a marathon, not a sprint. 

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