The short answer: Yes, it appears to be. The somewhat longer answer: Yes, but (you knew this was coming) a number of indicators have been advising no less over the summer, and yet the market has continued to climb. Short-term timing decisions, in other words, remain as fraught as ever. But let’s press on anyway and consider some of the clues that imply the market is toppy.
Author Archives: James Picerno
Macro Briefing: 5 September 2025
Hiring at US companies slowed to 73,000 in August, below expectations. “The year started with strong job growth, but that momentum has been whipsawed by uncertainty,” said Dr. Nela Richardson, chief economist, ADP. “A variety of things could explain the hiring slowdown, including labor shortages, skittish consumers, and AI disruptions.”
Softer US Economic Growth Expected For Q3 GDP Report
The US economy remains on track to post a moderate downshift in growth in next month’s third-quarter GDP report, based on the median estimate for a set of nowcasts compiled by CapitalSpectator.com.
Macro Briefing: 4 September 2025
US job openings fell in July, dropping to a level that’s close to a 4-1/2 year low and fueling expectations that the labor market is cooling. The report strengthened forecasts that the Federal Reserve would cut interest rates at its upcoming policy meeting on Sep. 17. “This is a turning point for the labor market,” said Heather Long, chief economist at Navy Federal Credit Union. “It’s yet another crack.”
Total Return Forecasts: Major Asset Classes | 03 September 2025
The long-run expected total return for the Global Market Index (GMI) continued to hold in the low-7% range in August, based on the average for three models (defined below). The expected performance remains well below the trailing 10-year return for GMI, a market-value weighted mix of the major asset classes (excluding cash).
Macro Briefing: 3 September 2025
US manufacturing activity contracted for sixth straight month in August, based on the ISM Manufacturing Index. One bright spot: the new orders component improved to 51.4 last month, reflecting a modest growth rate. “I continue to see the broad economy generally and the manufacturing sector in particular as in a holding pattern until tariff-related uncertainty recedes,” said Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets.
Major Asset Classes | August 2025 | Performance Review
Global equities in developed markets ex-US led continued to lead the major asset classes in August, based on a set of ETFs. Last month’s rally strengthened the year-to-date leadership for these stocks, which continue outperform the rest of the field by a wide margin.
Macro Briefing: 2 September 2025
US PCE inflation was steady in July at a 2.6% year-over-year pace as core PCE ticked up to 2.9%, the highest since February. “The Fed opened the door to rate cuts, but the size of that opening is going to depend on whether labor-market weakness continues to look like a bigger risk than rising inflation,” said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management. “Today’s in-line PCE Price Index will keep the focus on the jobs market. For now, the odds still favor a September cut.”
Labor Day Weekend 2025
The Capital Spectator will honor the long Labor Day weekend by refraining from anything even remotely resembling work. The production line fires up anew on Tuesday, Sep. 2. Cheers!
Markets Continue To Expect Fed Will Cut Rates Next Month
Is it because of President Trump’s pressure campaign on the central bank to lower rates? Or perhaps it’s all about concerns that economic growth is slowing and receding expectations that tariff will raise inflation. Maybe it’s a combination of all of the above. Whatever the reasoning, markets are confident that the Federal Reserve will trim its target rate at the Sep. 17 policy meeting.