September ADP & August PCE +3

09:59 30-Sep-26

The ADP report for September headlined at +90K jobs, easily topping expectations in the high sixties.  Pay gains continued to lag inflation at +3.2%, but that will also be seen as positive for the market in that it helps the Fed argument for standing pat in less than a month.  Fedwatch has swung wildly back to just over a 1 in 3 chance for a hike after topping out over 70%

That argument is further aided by the PCE numbers for August, with headline and Core at +0.3% and +0.2%, both a tenth below expectations.  Income was +0.2%, which is two tenths below, but Spending was a tenth or two higher at +0.9%.

This service refers to commentary from CrowdWisers when considering whether or not today's bounce will be medium or short term:

I think the midterms also matter to the broader market as a leak of the Anthropic prospectus shows a loss of $42b on $4.6b of revenue for last year.  3Q26 numbers are likely better, but including them would put the IPO after the election.  This chart from the Fed implies just how much equities have been supporting spending.  That's not a sure prediction that it will all fall apart, but I would be remiss not to note the possibility.

The ten-year T-Note yield had touched 5.3% and is hovering just below 5.25% currently.  Thirty-year T-bonds have barely come off their recent 5.6% highs. 

Topics:

• none