Morning News: September 26, 2025
Posted by Eddy Elfenbein on September 26th, 2025 at 7:03 am

The UN Shows How Trump Is Pretty Much on His Own Now

Ukraine Is Now The Strongest Ally Europe Can Rely On

Europeans Privately Tell Russia They’re Ready to Shoot Down Jets

Tokyo’s Price Growth Steady But Rate Increase Still in Play

Bank of Mexico Makes 10th Straight Interest-Rate Cut

Trump Wades Into Bailout Politics in Offering a Lifeline to Argentina

Bessent Puts US Money at Risk in $20 Billion Argentina Backstop

Why Javier Milei’s Chainsaw Suddenly Jammed

Stock Futures Waver After Trump Unveils New Tariffs

New Tariffs Shock Countries Reeling From Trump’s Chaotic Trade War

The Trump FTC Was Right To Reverse the Non-Compete Ban

The Global Payments System Is a Miracle…But It’s Not Cheap

The Courts Strike a Blow Against the Administrative State

Fed Independence Reaches Its Moment of Truth as Supreme Court Weighs Cook’s Fate

Trump to Impose New Tariffs on Pharma, Big Trucks

Trump Takes Aim at Chip Makers With New Plan to Throttle Imports

Why Corporate America Is Caving to Trump

David Einhorn Sounds Warning on the AI Spending Splurge

The $100 Billion Nvidia-OpenAI Virtuous Circle Has an Ugly Side

TikTok’s $14 Billion Price Tag in Trump Deal Stuns Investors

Bot Networks Are Helping Drag Consumer Brands Into the Culture Wars

How Zillow Got On Track for First Profitable Year Since 2012

Six Flags Is Under Activist Pressure to Sell Its Real Estate

The TV Boss Who Kicked Kimmel Off His Stations and Started a Firestorm

Marketing Movies Is Harder Than Ever. And Here Comes ‘One Battle After Another.’

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Morning News: September 25, 2025
Posted by Eddy Elfenbein on September 25th, 2025 at 7:04 am

EU Aims to Lock in Three More Trade Deals in Asia by 2027, Top Official Says

Asian Investors Turn to European and MidEast Hedge Funds, BofA Survey Shows

Milei Fixed Half of Argentina’s Inflation Problem. He Needs Help With the Rest.

Germans Feel a Little Less Gloomy Despite Economic Clouds

Swiss Central Bank on Hold as Tariffs Threaten Slowdown

The Federal Trade Commission Takes On the 2nd Amendment

Faith-Based Investing Makes It To the Indexes

Stablecoins Should Be for Moving Money, Not Saving It

Cryptoasset Drop Deepens Ahead of $22 Billion Options Expiry

Tether Is Dancing While the Crypto Music Still Plays

$100,000 Per Employee: How the H-1B Visa Fee Could Reshape Work Forces

Senators Want Answers From Big Tech on H-1B Workers, Layoffs

Germany Woos Indian Workers Spooked by U.S. Visa Changes

White House Tells Agencies to Prepare for Job Cuts in Shutdown

A Diminished Social Security Work Force, and Its Customers, Feel the Strain

Princess Awesome vs. the United States of America

Calpers Is Discarding the Familiar Pension Fund Playbook

Trump, Orban Talk Energy as US Bears Down on Russian Oil Buyers

China’s Remarkable Green Transition Is About to Get Tougher

Nature Loss Threatens 25% Profit Hit for Mining, Power Firms, Barclays Finds

HSBC Says Quantum Computing Trial Beat Wall Street Rivals

Intel Is Seeking an Investment From Apple as Part of Its Comeback Bid

How Intel’s $28 Billion Pledge Left an Ohio Town in Limbo

Instagram’s Mosseri Sees Challenge in Coming Wave of AI Images

The Space Economy Cannot Succeed Without Private Ownership

Autonomous Truck Startup Kodiak Set to Go Public After $2.5 Billion Deal

Starbucks to Cut Hundreds More Corporate Jobs, Close Stores

Giant Brand Bikes Made in Taiwan Barred by Trump Administration

Pharma Is Pushing $200,000 Cancer Drugs When Cheaper Doses May Work

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Morning News: September 24, 2025
Posted by Eddy Elfenbein on September 24th, 2025 at 7:09 am

China to Stop Seeking Special WTO Treatment in Future Talks

The US Assault on the UN Rests on a Tragic Misunderstanding

EU Makes Fresh Push With US to Revive Talks on Metals Tariffs

German Companies Turn Gloomier as Economy Flounders

Why UK Inflation Is So High and What It Means for Interest Rates

The Trillion-Dollar Race for European Money Management’s Future

US Stocks Resist S&P 500 Drops of 2% or More in Best Run in Over a Year

Markets Are Selling Off After Powell Said Six Words Investors Don’t Want to Hear: ‘Equity Prices are Fairly Highly Valued’

Stephen Miran’s Rate-Cut Arguments Don’t Add Up

The Fed’s Rate Path Is Too Cautious to Fix Housing

Searching for the Bull’s End? Don’t Chase False Alarms

Morgan Stanley to Offer Crypto Trading on E*Trade Platform Through Zerohash Tie-Up

Financial Firms to Feel Outsized Impact from Trump’s H-1B Overhaul

Questionable Assumptions Underlay Calls for a Wealth Tax

This Labor Market Isn’t Great for Women, Either

Top US Business Schools Are Shutting Down DEI Initiatives

OpenAI Unveils Plans for Seemingly Limitless Expansion of Computing Power

Alibaba Shares Soar After Hiking AI Budget Past $50 Billion

AI “Workslop” Is Crushing Workplace Efficiency, Study Finds

The ‘Dark Patterns’ at the Center of FTC’s Lawsuit Against Amazon

195 Million Prime Members Wrecks the FTC’s Case Against Amazon

Taking Apple’s Property In the Name of ‘Freedom’

Ford Courts Riskier Borrowers With Lower Rates for F-150 Pickups

Why Obamacare Bills May Double Next Year

F.D.A.’s Approval of a Drug for Autism Upends Review Process

Philanthropies Strike a Promising Deal to Turn Back H.I.V.

Disney Raises Prices for Streaming Plans in the U.S.

Kimmel Makes Emotional Return to ABC With Trump Barbs, Comments on Kirk Controversy

Angola Bids for Minority Stake in De Beers to Fend Off Botswana

NFL Wants to Accelerate TV Rights Renegotiations to as Early as Next Year, Commissioner Goodell Says

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CWS Market Review – September 23, 2025
Posted by Eddy Elfenbein on September 23rd, 2025 at 10:08 pm

(This is the free version of CWS Market Review. If you like what you see, then please sign up for the premium newsletter for $20 per month or $200 for the whole year. If you sign up today, you can see our two reports, “Your Handy Guide to Stock Orders” and “How Not to Get Screwed on Your Mortgage.”)

Normally I’m not in the bubble-calling game, and I’m not going to start now, but I have to concede that the current stock market is getting pricey.

Very pricey. Even Jerome Powell admitted today that “equity prices are fairly highly valued.”

It seems stocks have gone up every day. Over the last 20 trading sessions, the S&P 500 has closed lower only seven times. The market has gone 36 days in a row without a drop of more than 0.7%, which really isn’t a big drop. Since August 1, the market is up more than 6.7%, and since April 8, it’s up over 33%.

Don’t get me wrong — I’ll take it — but I understand that it’s not normal.

Let’s look at some valuation numbers. The S&P 500 is expected to have earnings this year of $258.30 per share, and $302.90 per share for 2026. (Those are index-adjusted numbers.) That means the market is going for 25.9 times this year’s earnings, and 22.0 times next year’s earnings. That’s quite high.

Tobias Carlisle points out that the forward P/E of the S&P 400 Mid-Cap is at 16.2 and the S&P 600 Small-Cap is at 15.9, which is right in line with their long-term averages.

Not only are stocks up, but gold is at a new all-time high. In fact, gold has finally surpassed its 1980 peak adjusted for inflation. There’s nothing gold loves more than lower real interest rates, and that’s what it’s going to get. And if Jerome Powell is to be believed, then more rate cuts are coming (more on that in a bit).

In a roaring bull market, the best move is to sit back and let it run. One of my favorite Peter Lynch quotes is, “Far more money has been lost by investors trying to anticipate corrections than lost in the corrections themselves.”

Here’s a chart of the S&P 500 (in black) along with its earnings (in blue). I scaled the two lines at a ratio of 20 to 1. That means whenever the lines cross, the S&P 500’s P/E Ratio is exactly 20.

But there’s a key difference with the current rally. As I’ve stressed many times, it’s not so much that the entire market is going higher, but it’s the kinds of stocks that are rallying.

Lately, that’s been the High Beta sector. In fact, ever since I’ve been highlighting the tremendous outperformance of High Beta, the market has only grown more lopsided.

Over the last 23 trading sessions, High Beta has beaten Low Vol 17 times. Since Augst 21, High Beta has gained 10.2% while Low Vol is -2.7%. Over the last five months, High Beta is up about 50% while Low Vol is flat. Sure, Wall Street is having a party, but it has a very exclusive guest list.

The big market news today was that Fed Chairman Jerome Powell gave a speech at the Greater Providence Chamber of Commerce luncheon in Warwick, Rhode Island.

This was a chance for Powell to explain what the Fed has been doing and why. I often make fun of “Fedspeak” because it’s unnecessarily complex and filled with useless jargon.

I’m glad to say that Powell was more plain spoken today. In his remarks, Powell noted that the economy has slowed down, and unemployment has edged up. He also said that inflation has ticked higher and remains “somewhat elevated.” Powell said that at the FOMC’s last meeting, it was time to move policy closer to neutral. In other words, it was time to cut rates.

Powell said:

GDP rose at a pace of around one and a half percent in the first half of the year, down from 2.5 percent growth last year. The moderation in growth largely reflects a slowdown in consumer spending. Activity in the housing sector remains weak, but business investment in equipment and intangibles has picked up from last year’s pace. As noted in the September Beige Book, a report that gathers qualitative information from across the Fed System, businesses continue to say that uncertainty is weighing on their outlook. Measures of consumer and business sentiment declined sharply in the spring; they have since moved up but remain low relative to the start of the year.

That’s a pretty good summary. The question mark is the labor market. There’s been a drop off in both the supply and demand for workers (i.e., immigration) which, in Powell’s words, has made for an “unusual and challenging development.”

Payroll job gains slowed sharply over the summer months, as employers added an average of just 29,000 per month over the past three months. The recent pace of job creation appears to be running below the “breakeven” rate needed to hold the unemployment rate constant. But a number of other labor market indicators remain broadly stable. For example, the ratio of job openings to unemployment remains near 1. And multiple measures of job openings have been moving roughly sideways, as have initial claims for unemployment insurance.

Powell said that since 2022, the Fed has made significant gains with inflation but it’s still above the Fed’s target for 2%. Over the last year, the core PCE is running at 2.9%.

What’s behind the recent increase in inflation? It appears that prices for goods are the chief culprit. This comes after goods prices fell much of last year. Also, the available evidence suggests that tariffs are causing the higher prices rather than broader pricing pressures.

For services, the rate of inflation has been falling, and it looks to continue to fall. (Mind you, this is the rate of increase that’s falling.) Powell said that beyond the next year, most inflation points toward the Fed’s 2% goal.

There’s also the issue of the tariffs. Powell said that the best-case scenario will be a one-time shift in prices. Powell stressed that “one-time” doesn’t means “all at once.” It’s simply a matter of time. Tariffs will have to work their way through supply chains. That means the one-time may even take several quarters.

Personally, I’m baffled by the Fed’s strong commitment to 2% inflation. There’s nothing magical about it. As an investor, the important thing is that they got inflation down from 9% to 2.9%. Getting the extra 0.9% doesn’t seem like that big a deal, especially if it means hurting an already damaged labor market.

Powell said that with the dual threat of fewer jobs and higher prices, there’s no risk-free path. There’s a danger of moving too aggressively, and there’s danger if they stand still for too long. One detail that caught my eye is that Powell said that he still sees the current policy as “modestly restrictive.” In other words, he’s opening the door for more rate cuts.

Wall Street currently expects another interest-rate cut at the Fed’s next meeting in October, and another cut in December. After that, traders see three more cuts in 2026.

On Monday, new Federal Reserve Governor Stephen Miran made the case for aggressively lower interest rates. The current target range for the Fed funds rate is 4.0% to 4.25%. Miran thinks it should be in the low 2% area.

In the Summary of Economic Projections, Miran wants to cut rates by 1.25% this year. Miran was the sole dissenting voice at last week’s FOMC meeting.

Miran makes an interesting case. Miran believes that “changes in tax and immigration policy along with easing rental costs, deregulation and incoming revenue for tariffs” are changing the economic landscape and as a result will allow for much lower interest rates.

Miran contends that the “neutral interest rate” has fallen. By neutral rate, we mean the level at which the Fed is neither pushing nor pulling. The problem with the neutral rate is that we never know exactly where it is. It’s a big guessing game. Right now, the Fed thinks the neutral rate is around 1% to 2%, but Miran thinks it’s near 0%.

Miran’s term is a short one. It ends in January. Later this year, he could return to the Fed as its new chairman.

There are a few important economic reports coming this week. On Thursday, we’re going to get reports for durable goods and existing home sales. Also on Thursday, the government will update its report on Q2 GDP growth.

Of course, Q2 is starting to be far away from us. It started six months ago and ended three months ago. Still, the GDP report is a biggie. The last report said that the U.S. economy grew at a real annualized rate of 3.3% during Q2. That’s quite good.

But what about Q3? Wall Street is starting to parse the numbers for this report. The Atlanta Fed’s GDPNow model currently pegs Q3 GDP growth at 3.3%. If that’s right, it would be back-to-back quarters of 3.3% growth.

That’s all for now. I’ll have more for you in the next issue of CWS Market Review.

– Eddy

Morning News: September 23, 2025
Posted by Eddy Elfenbein on September 23rd, 2025 at 7:06 am

Swedish Riksbank Cuts Key Rate and Signals Further Easing Is Unlikely

EU, Indonesia Ink Trade Deal After Years of Talks

European Business Activity Inches Up But Impetus Remains Elusive

Chainsaw Politics Are Not Cutting It in Argentina

China Floods the World With Cheap Exports After Trump’s Tariffs

Tariffs Will Hit Slowing U.S. Economy Hard in 2026, OECD Says

Dow Futures Steady Ahead of Powell Comments

Miran Is Contradicting Himself on the Case for Big Rate Cuts

$37 Trillion Debt Vivifies the Perils of Future Budgetary Balance

Ignore ‘Open Letters’ From Economists

CFPB Ends Monitoring of Apple, U.S. Bank Years Ahead of Schedule

Some PE Firms Doomed to Fail as High-Flying Industry Loses Its Way

Eurozone Faces Inflation, Growth Threat From China’s Rare Earths Dominance, ECB Warns

How Norway Adopted New Tech in Its Hunt for ‘Missing’ Oil

Spiraling Power Costs Are Now a Major Political Issue in the US

Pricing Water Risk Takes On Growing Urgency Amid Scarcity Fears

An $800 Billion Revenue Shortfall Threatens AI Future, Bain Says

Nintendo’s Switch 2 Sales Boom Fails to Ease Game Developers’ Gloom

Jaguar Faces Prolonged Shutdown After a Cyberattack

Tech’s H-1B Debate: Is Trump’s New Fee a Solution or a Setback?

Trump’s $100,000 Visa Fee Knocks Down Bridge Between India and the U.S.

Who Uses H-1B Visas the Most, in Charts

USDA Puts Food Researchers on Leave

The FDA’s Vinay Prasad Is a Potentially Fatal Barrier to the Right to Try

Trump’s Tylenol Briefing Peddled Junk Science

Scientists Rebuke Trump’s Tylenol-Autism Claim, Stress Fever Is Bigger Danger in Pregnancy

This Hated Stock Suddenly Looks Like an Obesity Bargain

A Charlie Kirk Poster Reignites Debate Over When Businesses Can Refuse Service

Kimmel’s Late-Night Show to Return to ABC Tuesday

The Kimmel Saga Reveals a MAGA Strategy — and Its Defense

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Morning News: September 22, 2025
Posted by Eddy Elfenbein on September 22nd, 2025 at 7:06 am

France to Join Calls for Palestinian State in Gamble for Macron

The U.S. Is Forfeiting the Clean-Energy Race to China

China’s Labor Market Distress Spreads at Worst Time for Deflation Fight

Europe’s China Dream Is Over, With Poland Now a Bigger Customer

Setting Up a Business in India Is Hard. Leaving Is Even Harder.

Trump’s $100,000 Visa Targets a $280 Billion India Success Story

Trump’s $100,000 H-1B Visa Fee Sets Off Scramble Across Corporate America

Will the $100,000 Visa Fee Help U.S. Workers? Economists Aren’t So Sure

Do ‘The Markets’ Really Want The Federal Reserve To Lower Rates?

Sen. Richard Durbin’s Long-Term Love Affair With Price Controls

Cryptocurrencies Sink as $1.5 Billion in Bullish Bets Wiped Out

Hedge Funds Pile Into Banks, Insurance, Consumer Finance, Goldman Sachs says

Inflation Is the Lesser Evil

Inflation Is Worse Than the CPI Shows, Says Ex US Comptroller

What Will U.S. Capitalism Look Like in 50 Years? Seven Experts Weigh In

How Universal Child Care Could Change the Economy

A 50-Pound Book Holds the Keys to Citadel Securities

Democrats Can’t Win Another Shutdown Fight

Pam Bondi Isn’t the President’s Enforcer

Trump’s Tariffs Are Damaging America’s Biggest Foreign Source of Screws

If the Swiss Army Knife Is Made in America, Is It Still Swiss?

What Venture Capitalists Learned in China

As the Need for Data Centers Grows, We Must Choose Building Over Process

Nvidia Tie-Up Leaves Intel Short of a Crucial Piece

TikTok’s Algorithm to Be Secured by Oracle in Trump-Backed Deal

How FCC Chairman Carr Took EchoStar From Skid Row to Yellow Brick Road

T-Mobile Names Telecom Veteran as Next CEO

Novo Nordisk’s Woes Are Slimming Denmark’s Economic Growth

Saks in Talks to Sell 49% of Bergdorf Goodman for About $1 Billion

MrBeast on His Quest to Turn YouTube Fame Into an Entertainment Empire

The Broadway Musical Is In Trouble

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Morning News: September 19, 2025
Posted by Eddy Elfenbein on September 19th, 2025 at 7:05 am

Japan Consumer Prices Continue to Rise, But at Slower Pace

Bank of Japan to Start Offloading More Assets

Jefferies Deepens Ties With Japan’s Sumitomo Mitsui

Why the Fed Rate Cut Won’t Ease the Government’s Debt Problem

Why the Fed’s Rate Cut May Be Its Last of 2025

Fed’s Kashkari Sees Two More 2025 Cuts Given Hiring Slowdown

‘No One Should Be Very Confident’: Four Economists Dissect Trump and the Economy

All the Reasons Trump Would Be Wrong to Ditch Quarterly Earnings

What Reliving the 1929 Crash Tells Us About Today’s Stock Market

‘Hedge America’ Trade Fuels Global Rush Into Short-Dollar Wagers

The GENIUS Act Ties Stablecoin Risk to Banking Risk

Schumer Finally Has a Plan for a Government Shutdown

How Trump Broke Corporate America’s Most Valuable Consultant

The Power of Venture Debt To Turbocharge Tech

Startups Lean on Once-Rare Share Sales to Keep Talent Happy

Nvidia’s CEO Walks an AI Tightrope Between the U.S. and China

Nvidia, Wayve in Talks Over $500 Million Investment in Self-Driving Car Startup

Since Leaving Washington, Elon Musk Has Been All In on His A.I. Company

Sam Altman Has a Lot of Things Keeping Him Awake at Night

Solar-Powered Cars and Trucks Are Almost Here

The Race Is on to Make Rare Earth Magnets Outside China

EU Proposes Full Ban on Russian LNG From 2027, a Year Early

Farm Aid Turns 40 and Returns to Crisis Mode

Trump and Xi Set to Finalize TikTok Deal

‘Peak SF’ on a Friday Night Is a Robot Fight

Trump Administration Wields Its Full Toolbox to Bring Media to Heel

Inside Disney’s Abrupt Decision to Suspend Jimmy Kimmel’s Show

What Pam Bondi Gets Wrong About ‘Hate Speech’

New Owners Plot Comeback for Tween Retailer Claire’s

It’s Never Been Harder to Get a Job in Hollywood

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Morning News: September 18, 2025
Posted by Eddy Elfenbein on September 18th, 2025 at 7:07 am

Taiwan Central Bank Leaves Key Interest Rates Unchanged

Norges Bank Cuts Key Rate But Hints at Very Gradual Easing Going Forward

Bank of England Leaves Key Rate on Hold, Slows Quantitative Tightening

The Fed Rolls Back Recession Risk

Rate Cuts After Long Pauses Have Been a Boon for Stocks

Amex Boosts Platinum Fee to $895, Adds Resy and Lululemon Perks

How an Enron Parody Turned Into a Financial Mess of Its Own

What Decides Where Mortgage Rates Go From Here

Home Insurance as You Know It Is Doomed. You’re Not Ready.

Labubus Might Be the Perfect Avatar of 2025

Russia, China and Iran Use Kirk’s Murder to Stoke Conspiracy Theories and Division

Disney Pulls Jimmy Kimmel’s Show After Kirk Remarks

Blaming Violence on Free Speech Is a Very Old Trick

After ICE Raids, Canada Sees Surge in Migrants Crossing Border Through New York

To Keep Us Safe From China, Trump Must Allow Chinese Goods In

From Skechers to Foot Locker: Tariff Chaos Spurs Record-High Footwear, Apparel Deals

Trump’s UK State Visit Shifts From Pomp to Politics and Investment

Congress Has No Good Excuse to Keep Trading Stocks

Inside the Room Where CEOs Say What They Really Think of Trump’s Policies

American Farmers Are Feeling the Pain of Trump’s Policies

The TikTok Deal Doesn’t Seem to Do What It Was Supposed To

In the EU Antitrust Case, AI Disrupts the Market

Nvidia Invests $5 Billion in Intel, Plans to Co-Design Chips

Meta Unveils New Smartglasses With Display and AI Abilities

Meta Approaches Media Companies About AI Content-Licensing Deals

Executives at xAI Clashed With Musk Advisers Before Departing

Tesla Is Redesigning Door Handles That Drew Safety Scrutiny

A Cyberattack Crippled Range Rover Production. The Reboot Is Proving Tough.

How More Rail Could Take Trucks Off the Road

India May Finally Be Ready for Its Atomic Age

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Morning News: September 17, 2025
Posted by Eddy Elfenbein on September 17th, 2025 at 7:08 am

EU Wraps Up Trade Deal With Indonesia in Push for New Markets

Indonesia’s Central Bank Delivers Surprise Rate Cut Amid Political Uncertainty

Incoming ECB Rate-Setter Pereira Says He’s ‘Definitely’ No Dove

Japan’s Exports Struggle Under Weight of Tariffs

U.S. Importers and Exporters Fret Over Port Fees on Chinese Ships

Import Prices Rose Unexpectedly in August

G.O.P. Again Cedes Power on Tariffs to Avoid Crossing Trump

Fed Divisions Thrust Powell Into Uncharted Territory

Investors Are Bullish as a Pivotal Fed Decision Looms

Bessent, Like Fed Governor, Made Contradictory Mortgage Pledges

We’ll FOM See How Long the Risks Can Be Ignored

The ‘Smart Money’ Is Flashing a Warning for Stocks

The Two-Speed Economy Is Back as Low-Income Americans Give Up Gains

Fired BLS Chief Breaks Silence, Calls Her Dismissal a ‘Dangerous Step’

US Wins Release of Wells Fargo Banker Barred from Leaving China

BofA Raises US Minimum Hourly Wage to $25, Delivering on 2021 Commitment

Ray Dalio Embraces Family Office Life as CIO: ‘I’m the Guy’ Now

Trump’s $15 Billion NY Times Suit Also Has a Serious Intent

Texas Oil Boom Spawns a Toxic Crisis of the Industry’s Own Making

China Orders Firms to Stop Buying Nvidia AI Chip, FT Says

How China Is Dominating the Global EV Market

Rivian Is Building a Georgia Factory in the Face of an EV Slump

Japanese Brand Automakers Power U.S. Workforce Development

South Korea Reels From Shocking ICE Expulsions of Battery Engineers

LG Battery Unit Continues U.S. Projects After Raid

Set America’s Railroads – and Small Businesses – Free

Lilly’s Obesity Pill Will Have Far-Reaching Effect, Doctors Say

Jerry of Ben & Jerry’s Resigns, Saying Company Has Been ‘Silenced’

General Mills Profit Beats as Shoppers Dine In to Save Cash

Infamous Fyre Festival Sells for Fire-Sale Price of $245,000

Why Elon Musk Will One Day Open a Candy Company

Let’s Not Trivialize a Tragedy With Internet, Trans and Videogame Banalities

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CWS Market Review – September 16, 2025
Posted by Eddy Elfenbein on September 16th, 2025 at 7:14 pm

(This is the free version of CWS Market Review. If you like what you see, then please sign up for the premium newsletter for $20 per month or $200 for the whole year. If you sign up today, you can see our two reports, “Your Handy Guide to Stock Orders” and “How Not to Get Screwed on Your Mortgage.”)

This week is Fed Week. We finally made to the big interest rate decision. The Federal Reserve started its two-day meeting today, and tomorrow afternoon, the Fed is widely expected to cut interest rates by 0.25%. This will be the first rate cut this year.

We’ll learn more details tomorrow, but it looks like this will only be the start of interest rate cuts. Traders expect two more cuts this year, and a fourth cut within six months. The Fed’s policy statement will be released tomorrow at 2 p.m. ET. That will be followed shortly after by a press conference from Federal Reserve chairman Jerome Powell.

Frankly, I think the Fed was behind the curve on this. We’ve already seen some deteriorating economic data. One year’s worth of jobs data was revised lower. While the unemployment rate is still low, it’s at a four-year high. The initial jobless claims also came in high. Historically, once the jobs data starts to move a little, it soon moves a lot.

Coincidentally, the Fed got a new board member today. Yesterday, the Senate voted to confirm Stephen Miran as a member of the Federal Reserve Board. The vote was 48 to 47. He was sworn in earlier today. President Trump has been very critical of the Fed, but he’ll get his wish for at least one rate cut. In May, the president will be able to nominate his own Fed chairman.

The stock market has been incredibly strong in recent weeks. If there are any problems with the labor market, it’s not showing up in share prices. Before the market’s modest drop today, the S&P 500 closed higher ten times in the last 14 sessions. The market has led a charmed life since the April 8 low. Not only has the market climbed steadily, but it’s done so very smoothly. The S&P 500 hasn’t had a daily drop of more than 0.7% in 31 trading days.

This gets us to the central paradox of this market. The overall market has been steady and calm, yet within the market, the Low Volatility stocks have done the worst, while the High Beta stocks have gobbled up all the profits.

I’ve talked a lot about this trend over the past several weeks, but it’s only grown more pronounced.

Here’s a small chart that explains a lot. This is the S&P 500 High Beta ETF (SPHB) along with the S&P 500 Low Vol ETF (SPLV). Since early April, the Low Vol stocks are down slightly (-1.64%) while the High Beta stocks are up nearly 50%.

During the short-lived bear market we had earlier this year, low volatility stocks did much better than the overall market. The High Beta sector has stormed back. I generally shy away from predicting market tops or bottoms, but I feel confident in saying that the High Beta outperformance will not continue indefinitely. Stein’s Law: “If a trend cannot continue, it will stop.”

This morning, we got the retail sales report, and it was a decent one. I don’t want to overstate the strength of the report but it’s good to see signs of a resilient consumer in the face of weaker jobs data. Oftentimes, economic data is contradictory. This is only the initial report. We’ll get a more detailed report in about two weeks.

Here’s what the report had to say. For August, retail sales rose by 0.6%. That’s the highest since June. Expectations were for 0.2%.

The month’s strength was fairly widespread, with sales rising at nine of the 13 categories the Census Bureau tracks. Retailers may have reaped the benefit of a strong back-to-school season. Sales at nonstore retailers—a proxy for e-commerce—jumped 2% in August from July, while clothing and accessories sales increased 1%, and sales at sporting goods and hobby stores gained 0.8%.

Miscellaneous store retailers, furniture stores, general merchandise stores, and health and personal care stores all notched monthly declines, but still grew year over year.

If we exclude autos, then retail sales were up 0.7% last month. That’s also the best since June. If we strip out autos and gasoline, then retail sales were again up by 0.7%. The retail sales number for June was also revised slightly higher. The original report came in at 0.5%. That was revised up to 0.6%.

We also got the report on import prices. Month over month import prices rose by 0.3%. Wall Street had been expecting a drop of 0.2%. Over the last year, import prices are unchanged. Over the last year, export prices are up by 3.4%.

Stock Focus: Colgate-Palmolive

As an investor, I’ve learned that one of the best places to find great opportunities is in the regular and the ordinary. Too often, investors think that being a great investor involves finding the “next great” company that’s going to discover and market some revolutionary breakthrough.

I have nothing against that concept except that it’s very hard to do. Let’s remember how often the winner is not the company that was first. Instead, it’s the company that was best able to exploit what others have done.

On the other hand, we have the non-revolutionary companies. This week’s featured stock is Colgate-Palmolive (CL), which is about as non-revolutionary as they come.

I know what you’re thinking. Colgate? You’re talking about investing in toothpaste?

Well, yes, but Colgate is a whole lot more than toothpaste. Today’s Colgate-Palmolive is a household products powerhouse. In just about every home in America, you can probably find something made by Colgate.

Colgate employs more than 34,000 people in dozens of countries all over the world. Last year, Colgate registered sales of more than $20 billion. On average, people buy over $55 million worth of Colgate’s products every day.

Here’s another fact you may not know. Since 1990, shares of Colgate are up more than 5,600%. Colgate has been a massive winner for investors. Shares of Colgate-Palmolive have far outpaced the rest of the stock market. What’s more is that the company has increased its dividend every year for the last 62 years.

Here’s how the stock has done since 1990. For context, the blue line is the S&P 500.

Not bad for a toothpaste company!

Of course, Colgate is a lot more than toothpaste. There’s also Palmolive dishwashing soap. Colgate also makes Irish Spring. They own a good part of Tom’s of Maine, Ajax and Speed Stick. Colgate also makes Skin Bracer, Fresh Start and Cold Power. Colgate owns dozens of well-known brand names. (You can see a list of their brands here.)

The current quarterly dividend is 52 cents per share, and I expect Colgate will keep their dividend-hiking streak alive. On August 1, the company reported Q3 earnings of 92 cents per share which beat the Street by three cents per share.

Colgate is a classic defensive play. The consensus on Wall Street now expects CL to earn $3.94 per share in 2026. I think that’s very doable. The stock has not performed well lately, and I think it’s a decent buy right now. The stock is going for about 20 times next year’s earnings. That’s a bit high but I think it’s reasonable for a long-term position. Also, the dividend yield works out to a little over 2.5%.

Wall Street Was Bombed 105 Years ago Today

One hundred and five years ago today, at one minute past noon, a bomb exploded in Wall Street which killed 38 people and seriously wounded 143. Windows were shattered up to a half-mile away.

A horse-drawn wagon loaded with dynamite had been parked in front of the headquarters of J.P. Morgan. The dynamite was packed with 500 pounds of cast-iron slugs.

For the first time ever, trading was halted on the floor of the New York Stock Exchange because of violence. The previous day, anarchists Sacco and Vanzetti had been indicted for bank robbery and murder. At the time, it was the deadliest terrorist attack on U.S. soil.

No one knows who carried out the attack, but it was assumed to have been orchestrated by an Italian anarchist group. They had carried out a series of bombings in June 1919.

Damage from the blast is still visible on 23 Wall Street. J.P. Morgan refused to have it repaired. This is a picture I took of the damage. The perpetrators were never caught.

That’s all for now. I’ll have more for you in the next issue of CWS Market Review.

– Eddy

P.S. This Sunday our ETF, the AdvisorShares Focused Equity Fund (CWS), will celebrate its ninth birthday. I want to thank everyone for your support. Every year, hundreds of funds close up shop but ours is as strong as ever. You can get more info on the fund here.