Key Data Reports in Jeopardy Amid Government Shutdown

Let's get to the big story breakdown.

While the Labor Department says the BLS will haul all economic reports during the government shutdown, that means no jobs report this Friday for non-farm payroll, leaving markets without key data on September hiring and unemployment.

Now a prolonged shutdown could also delay the next consumer price index report due out on October 15th, a crucial.

Inflation measure for Wall Street and the Fed.

Well, joining me to weigh in on the latest data as well as the shutdown is Tim Anderson, managing director at TJM Investments.

Good morning, Tim.

Thank you so much for joining me.

It's great to be with you on the first day of the 4th quarter.

Yes, well, we are heading into Q4 and what a 2025 it has been so far, but as widely expected, here we are.

October 1st, the government has shut down and we got that ADP figure.

So what does all of this mean?

Well, I think the ADP number will get a little bit more attention than usual.

It always comes out a couple of days before the employment report.

Now it looks like the employment report will be delayed because of the government shutdown and also the ADP is, as you mentioned a little bit of a mess.

And it certainly adds fuel to the fire for the Fed to justify additional rate cuts before the end of the year.

And of course now that we have backwards looking figures for the labor market in terms of ADP as well as jolts, as well as the performance for the major equity averages, where are we right now when it comes to equities?

Well, we got through September, which is historically a very difficult month in very good fashion, as you mentioned it was for the S&P and Nasdaq.

It was their best September in 15 years, and the Dow closed the quarter at an all-time high.

Now October has seen some volatility, but it's typically a month where you get very sharp volatility and then a sharp rebound later in the month.

I just think that with the big correction we had in April when we had the The 20-25% decline from the tariff tantrum market reaction and then we had another sell off at some point in time in reaction to Deep seek or some news from China on their AI platforms that all of that volatility kind of got moved way up in the calendar and we're going to have earnings start to come out in obviously in a couple of weeks.

A will pay very close attention to guidance from companies that had been holding back guidance for the last couple of quarters because of uncertainty over tariffs.

There's a lot less uncertainty over that right now, and it certainly feels like we're on a glide path to have a very constructive 4th quarter topping off what's what will be a better year than many had anticipated.

Yeah, and Tim, while I have you here, I do want to get your take on the different sectors and the performance that we've been seeing so far this year in 2025.

So the usual suspects, especially when it comes to AI, continue to outperform, but we're also seeing other sectors including financials, services, IT outperform when we're looking at the S&P 500.

Do you expect more of the same?

Well, I do, and I think it's worth mentioning that a lot of the technology names and some of the high flying AI driven tech names were a little soft during the last couple of weeks of September and I think what happens is a lot of professional money managers and hedge funds or investment advisors, they have um they have things in their charter that Say that they can't be overweighted in certain sectors or they don't want certain sectors to be to be an outsized percentage of their entire portfolio and with a very strong price appreciation that we saw in AI driven tech names and actually in some financials, I think that that caused a lot of portfolio adjustments during the last week to 10 days of the quarter where they had to.

Peel back on some of the names where they had the biggest gains because they didn't want to show outsized exposure in those sectors.

Now that's kind of a good thing because those stocks had acted very, very well, but it also caused a little bit of weakness, although not necessarily for fundamental reasons, more for some portfolios adjusting and keeping everything within the constructs of what they're.

Investment charters show.

So I think you've still got to watch.

Look, you've still got to watch these financials.

They've acted very, very well.

We're entering a rate cutting cycle.

I mean, we're one cut into it.

We're going to have more cuts.

The financials should continue to do better, although they gave back a little bit on the last day of the quarter, and tech should also continue to do well as we're, you know, still in early innings of this AI revolution.

And of course we'll look for other sectors that show some significant traction if the market continues to move higher on an overall basis, maybe some select retailers, maybe some infrastructure stocks, you know, maybe some some other.

Heavy cyclical names or names that will benefit from what looks like just the hundreds of billions if not trillions of dollars of investment that's going to be happening in the country over the next 3 to 5 years.

OK, Tim, always great talking to you.

Thank you so much for joining me as we kick off the final quarter of 2025.

It's always a pleasure to talk to you.

Thank you, Tim.