Copyright caymancompass
The September Consumer Price Index (CPI) report provided a calmer outlook on inflation, and gave investors confidence the Federal Reserve can lower interest rates at this week’s Federal Open Market Committee (FOMC) meeting. For the week, the S&P 500 Index was +1.9%, the Dow Jones Industrials +2.2%, and the NASDAQ +2.2%. The technology, energy, and industrial sectors led the S&P 500 Index, while the consumer staples, utilities, and materials sectors lagged. The 10-year US Treasury note yield decreased to 3.995% at Friday’s close versus 4.001% the previous week. During a void of economic data, September CPI was reported with prices +0.3% month-over-month and +3.0% year-over-year. Core CPI, which excludes food and energy prices, was +0.2% month-over-month and +3.0% year-over-year. This was modestly lower than expected and gave investors confidence the Federal Reserve would remain on track for a rate cut at the FOMC meeting this week. CME Fed funds futures are also projecting additional interest rate reductions in December and March. A potential cooldown in US–China trade rhetoric ahead of a meeting between President Trump and President Xi this week also eased investor fears. We hit the midpoint of the quarterly earnings reports this week with 175 companies in the S&P 500 Index scheduled to report results. Third quarter S&P 500 Index earnings growth is forecast at 9.2% with revenue growth of 7%. Full-year 2025 earnings are expected to grow by 11%, with revenue growth of 6.3%. In our ‘Dissecting headlines’ section, we look at consumer spending for Halloween. Dissecting headlines: Halloween spending Based on a survey from the National Retail Federation, Halloween spending for 2025 is expected to reach a record high of $13.1 billion, which is $1.5 billion (+12.9%) more than last year. Of this total, $4.3 billion is expected to be spent on costumes, $4.2 billion on decorations, $3.9 billion on candy, and $700 million on greeting cards. There is expected to be an average planned spending of $114 per person. The increased spending on decorations is mostly concentrated on 49% buying hanging decorations, 46% on pumpkins and gourds, 44% on indoor décor, and 38% on door decorations. Despite nearly 80% of American consumers anticipating higher prices due to tariffs, this has not spooked most from spending anyway. The survey indicated 73% of Americans plan to celebrate this year ,with 66% planning to hand out candy, 51% to dress in a costume, 51% to decorate, 46% to carve a pumpkin, and 32% to throw or attend a party. Halloween weather can also pay tricks on retailers and consumers. With the recent cooler weather, researchers found that more consumers started their Halloween shopping early due to already ‘feeling’ autumn weather. This year 49% of Americans surveyed said they started shopping for Halloween before October, compared to 10 years ago when only 34% said they started before October. Weather may play a factor as rainy conditions are expected in several parts of the country. Wicked rain or bone-chilling temperatures can discourage last-minute shopping, or cause many activities to be moved indoors or cancelled outright. BIAS Investors (Cayman) Ltd. Grand Pavilion (Hibiscus Way) 802 West Bay Road Grand Cayman, Cayman Islands W: biasinvestors.com E: info@biasinvestors.com T: 345-943-0003
