Oct 5 Update

Got through end of the 3rd quarter, Micron’s earnings report, and September job data. 

A softer inflation report and weak jobs numbers took some pressure off of the bond market.  Reduced expectations of a Federal Reserve rate hike in October.

Earnings for the S&P 500 are currently expected to rise more than 25% in the fourth quarter, and 2027 earnings are forecast to increase 15% from 2026 levels, a slowdown from this year’s estimates of more than 30% profit growth, but still impressive.

The US Bond Market (Bloomberg Agg) was down 2.6% in September.

In the past 30 years, only 5 months had a worse return:

1) September 2022: -4.3%

2) April 2022: -3.8%

3) July 2003: -3.4%

4) August 2022: -2.8%

5) March 2022: -2.8%

For the stock market, losing 2.6% in a month is a nonevent. But for the bond market, this is akin to a crash.