Ahead of today's Non-Farm-Payrolls print, Atlanta Fed GDPNow is forecasting just 2.1% US GDP growth for Q3
.
BREAKING: August private payrolls in the US rose by 99,000, well below expectations of 144,000.
This marks the smallest gain since 2021. Source: The Kobeissi Letter, ADP
Increase in CapEx spending over the last year...
-Google $GOOGL: +91% -Amazon $AMZN: +55% -Microsoft $MSFT: +54% -Meta $META: +33% Source: Charlie Bilello
Is the VIX preparing for another pop?
$VIX During an election year, it is the norm for volatility to pick up in September. Source: Trend Spider
US ELECTION UPDATE >>> Donald Trump is now leading Kamala Harris by 5 percentage points in 2024 election odds, according to Polymarket's prediction markets.
Just one month ago, Harris was leading Trump by 10 percentage points on the same platform. The election is 2 months out. Source: The Kobeissi Letter
Yesterday's rout is right on schedule: in presidential election years, markets peak right around Labor Day then trap door all the way until the election.
September and October tend to be weak in election years. This doesn't mean the world will fall apart, but just be aware the calendar over the next 8 weeks isn't doing anyone any favours. "Plans are useless, but planning is everything." Eisenhower Source: Goldman Sachs, www.zerohedge.com, Ryan Detrick
September is historically the worst month of the year for stocks:
The S&P 500 has fallen -2.3% on average in September over the last 10 years, marking the only month with negative returns. Since World War II, the average September return has been negative, at -0.8%. Moreover, the Volatility Index, $VIX, has seen an average spike of ~10% in September over the last 33 years. Subsequently, in October and November, the S&P 500 has seen a +1.6% and +3.8% rally on average. Markets are entering their most volatile period of the year. Source: The Motley Fool, The Kobeissi Letter
Is it sustainable?
Interest Expense, Social Security, and Health are set to account for 87% of the US government spending growth over the next 10 years. Government spending is estimated to grow from $6.8 trillion in Fiscal Year 2024 to $10.3 trillion in 2034, according to the CBO. $3.0 trillion of the $3.5 trillion increase come from Social Security, federal health care programs, and interest costs on the public debt. Interest costs are projected to be the fastest growing part of the budget, DOUBLING from $892 billion in 2024 to $1.7 trillion by 2034. The net interest share of spending growth could hit as high as 23%. Source: The Kobeissi Letter, CBO
