As explained in Thursday's post, the declines are larger when measured after the spikes higher on Monday on the S&P and NASDAQ and Tuesday on the Dow.
Why aren't stocks going up? Does Wall Street not believe the numbers being presented by the government? Maybe they shouldn't. After all, the jobs numbers have been revised down massively the last two years, lower by more than 1.7 million than originally reported, so there's reason to believe that somebody's lying.
And how about the 2.8% increase in August Durable Goods Orders? Well, that figure got explained away pretty quickly by stripping out aircraft (Boeing), inflation and the Big Beautiful Bill's re-introduction of 100% bonus depreciation.
Friday morning's release of the PCE by the Commerce Department may change things, though it's confounding to understand why. Stock futures soared on data that showed PCE in August up 0.3% as expected, and up 2.7% on an annualized basis. Core PCE was measured as up 2.9% over the last 12 months. Apparently, three percent inflation is the new standard.
Worried about a government shutdown?
Don't be. There's a reason that the House and Senate are on recess just as the federal government faces a funding issue as the 2025 fiscal year ends (9/30) and the 2026 fiscal year begins (10/1). It's the same reason that October is usually when stock market crashes happen. When the government Fs up, Wall Street reacts. It's as common as clockwork, albeit, with a bit of a lag.
The government and Wall Street have been joined at the hip for a very long time. That's not changing and isn't changing because Donald J. Trump is president, or Charlie Kirk got shot and killed, or Israeli President Benjamin Netanyahu is speaking at the United Nations on Friday, or that Secretary of Defense (or War, as President Trump likes to call it) has summoned roughly 800 top military commanders to Quantico, Virginia early next week.
While that last one is a bit of a puzzler as no details have been provided, it still shouldn't alarm anybody.
Nonetheless, people of varying stripes and cultures will get triggered over these events and conditions. Go ahead and vent if you must, but don't lose your mind over things that are just stitches in the tapestry that's been woven since the days of Vietnam, LBJ, and the peace movement of the 1960s. The people who control things in the United States, and by proxy, in the rest of the world, don't like peace, and don't want peace, because they don't profit from peace. They thrive on and profit from war, struggle, destruction, and devastation. If your life is in tatters, the folks at the very top of the economic and social structure will be smiling. There's no doubt that the wealthiest, most connected people in the world see regular citizens as less than pawns in a larger game. They have reasons to think that way. They have billions. The rest of the world has almost nothing.
That may come as a surprise to those who are actually doing well, who mostly ignore scary headlines, pay no attention to the news of the day and simply carry on with their lives as if nothing much is happening. Most people remain unaffected to a large degree in the grand scheme of things because the system has been fully integrated into their beliefs. They trust the government. They trust the news. They're blissfully ignorant, which is how the control freaks at the top want everyone to be.
It makes perfect sense to play along with whatever the big money interests are doing. It's largely profitable, especially if one is ale to discern the motives and sense the timing and it may not be all that difficult to predict when its time to plant seeds, when to nurture nature and when to reap the harvest. Patterns of agriculture have endured the centuries and are engrained into the fabric of economic life. Spring is time to plant. Summer is time to tend. Fall is time to reap the harvest and that's exactly what's about to occur.
The federal government isn't going to stop functioning and trying to control everybody's life even if the congress engineers a shutdown. Any shutdown that happens - and it looks like this one is going to happen - will hardly be noticed by the general public. Social Security checks will still go out. SNAP benefits will still be delivered. Rents will get paid, kids will go to school and football will be played on weekends. Only the media will actually be concerned about it. The government, which cold have averted a shutdown if they so pleased, will act as if the world might end without them running things. It won't and they know it.
But...
Wall Street may take the opportunity to make your life a little more miserable by running down stocks like they did in April... or during COVID, or in 2008, or in 2000, or 1984. Happens all the time.
If you were a fund manager and your career depended on beating the S&P and making profits for your clients, wouldn't you be inclined to sell when the S&P is up 12% year-to-date and 32% from the April lows? Yes, you would, especially if your stocks have done as well or better. You could moe largely to cash, keep some core positions, and spend the rest of the year lounging in the Bahamas or Morocco, or Southeast Asia enjoying the sweet life.
After whatever systemic shock has been planned and executed, things will return to normal, or, whatever normal looks like these days. There will be protests and demonstrations, mean tweets from president orange, the wars in Gaza and Ukraine will continue. Big Wall Street firms will have made oodles of money. People who thought they could outsmart the market will be poorer, and guess what? The U.S. government will be back in business, like nothing actually happened because nothing did happen. It just looked that way.
A few days ago, Marty Bent and Ed Dowd had a pretty wide-ranging discussion. It's an hour long, but the real meat is near the end, after about the 57-minute mark. If one is so inclined and has the time (Hey, you're going to watch football and baseball for hours this weekend, you can probably squeeze this in.), it's worth viewing.
At the Close, Thursday, September 25, 2025:
Dow: 45,947.32, -173.96 (-0.38%)
NASDAQ: 22,384.70, -113.16 (-0.50%)
S&P 500: 6,604.72, -33.25 (-0.50%)
NYSE Composite: 21,336.99, -146.49 (-0.68%)
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