Blog
The Markets
Like walking on cobblestones…
If you’ve ever walked down a road paved with cobblestones, you know the uneven surface can be challenging. Today, financial markets are paved with a variety of challenges and concerns. A recent survey from Charles Schwab found that its clients remain bullish; however, they have concerns about how the political landscape, market valuations, and geopolitical and macroeconomic issues will affect markets over the next three months. They also are considering the possibility of stagflation.1 (Stagflation is a rare confluence of slow economic growth, high inflation, and high unemployment.)2
Last week, markets were volatile. Rising and falling in response to a variety of different events, including:
U.S.- China trade negotiations. President Donald Trump and President Xi Jinping met last week and “Both sides agreed to delay restrictions that formed the center of an escalating tit-for-tat in recent weeks. That de-escalation…took a worst-case scenario off the table for markets, though much of what was agreed upon still has to be worked out in detail,” reported Reshma Kapadia of Barron’s.3
A cautionary statement from the Federal Reserve (Fed). Investors were not surprised when the Fed lowered the federal funds rate last week. However, the market wobbled when Fed Chair Jerome Powell emphasized that a December rate cut was not a certainty, reported Joe Weisenthal of Bloomberg.4 In the post-meeting statement, Chair Powell said:
“Available indicators suggest that economic activity has been expanding at a moderate pace. GDP rose at a 1.6 percent pace in the first half of the year, down from 2.4 percent last year…In the near term, risks to inflation are tilted to the upside and risks to employment to the downside – a challenging situation. There is no risk-free path for policy as we navigate this tension between our employment and inflation goals.”5
Third quarter company performance. It’s earnings season, the time when companies tell investors how profitable they were in the previous quarter. In general, companies performed well. “In fact, this quarter marks the 6th consecutive quarter that the S&P 500 is reporting a net profit margin above the 5-year average (12.1%),” reported John Butters of FactSet.6
The caveat is that many stock prices are at levels that require excellent performance. As a result, companies with earnings that were not perfect saw their share prices drop “What is more, companies aren’t getting rewarded as much for good news…FactSet said that the average price increase following a positive earnings surprise so far this quarter is just 0.3%, compared with the five-year average of 0.9%,” reported Paul La Monica of Barron’s. 7
Just as the right footwear can make walking on cobblestones easier, having a well-allocated and diversified portfolio can make navigating uncertain markets less stressful. Diversification won’t prevent losses, but it can help investors manage portfolio risk.
Amid significant volatility, major U.S. stock indexes moved higher over the week.8 Broadly speaking, U.S. Treasuries gained value as yields on many maturities ended the week lower than they started it.9
Data as of 10/31/25 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | 0.7% | 16.3% | 19.9% | 20.9% | 15.6% | 12.5% |
| Dow Jones Global ex-U.S. Index | 0.0 | 25.0 | 21.3 | 17.0 | 8.0 | 5.1 |
| 10-year Treasury Note (yield only) | 4.1 | N/A | 4.3 | 4.1 | 0.9 | 2.2 |
| Gold (per ounce) | -2.3 | 53.7 | 46.7 | 34.8 | 16.2 | 13.5 |
| Bloomberg Commodity Index | -0.1 | 8.7 | 9.4 | -1.8 | 8.3 | 2.2 |
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
WHAT IS AI GOOD FOR? Americans have mixed feelings about artificial intelligence (AI). In September, Brian Kennedy, Eileen Yam, Emma Kikuchi, Isabelle Pula, and Javier Fuentes of Pew Research reported on a September 2025 survey that asked about the risks and benefits of AI for society. The survey found:10
- 50 percent of respondents were more concerned than excited about AI being used more frequently in daily life,
- 38 percent were both concerned and excited,
- 10 percent were more excited than concerned, and
- 2 percent did not respond to the question.
Regardless, many Americans are using AI to make informed decisions when buying goods and services. For example, Americans have been turning to AI for help when:
Negotiating a better price for a car. Younger generations are using AI to identify the best times to buy cars (with a focus on price fluctuations, deals, or incentives), reported Eileen Falkenberg-Hull of Newsweek.11 They’re also using AI to review contracts and negotiate better deals, according to The Economist.12
Identifying the best value on a wine menu. Unless you are very knowledgeable about a wide range of wines, it can be challenging to know which bottle on arestaurant menu is well-priced. Now, you can upload a photo of the menu’s wine list and ask AI.12
Understanding plumbing and household repair issues. AI may be able to diagnose a problem and suggest a low-cost solution or negotiate a better price with the plumber. A recent survey found that “homeowners who followed AI’s guidance…reported an average 47% reduction in repair or maintenance costs and 29% felt less stressed about managing home repairs,” reported Anna Baluch on Realtor.com. She emphasized that it is important to double-check the advice offered by AI before taking action.13
“As AI goes mainstream, it will remove one of the most enduring distortions in modern capitalism: the information advantages that sellers, service providers and intermediaries enjoy over consumers. When everyone has a genius in their pocket, they will be less vulnerable to mis-selling—benefiting them and improving overall economic efficiency. The ‘rip-off economy’, in which firms profit from opacity, confusion or inertia, is meeting its match,” reported The Economist.12
WEEKLY FOCUS – THINK ABOUT IT
“…an adversarial mindset not only prevents us from understanding and responding to the other party, but also makes us feel like we’ve lost when we don’t get our way.”14 –Daniel Goleman, Psychologist and author
* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.
* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
Sources:
2 https://www.fidelity.com/learning-center/smart-money/stagflation
3 https://www.barrons.com/articles/xi-trump-china-us-cut-tariffs-chips-pause-restrictions-04bd3a99 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/11-03-25-Barrons-XI-Trump-De-Escalate-Tensions-3.pdf
4 https://www.bloomberg.com/news/newsletters/2025-10-29/some-thoughts-on-today-s-fed-decision or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/11-03-25-Bloomberg-Some-Thoughts-On-Todays-4.pdf
5 https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20251029.pdf
7 https://www.barrons.com/articles/earnings-stocks-price-reactions-3a5432e6?mod=hp_LEDE_C_1 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/11-03-25-Barrons-Wall-Street-Is-Punishing-Stocks-7.pdf
8 https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/11-03-25-Barrons-DJIA-SP-NASDAQ-8.pdf
11 https://www.newsweek.com/nw-ai/gen-z-using-artificial-intelligence-ai-car-buying-timing-2047326
12 https://www.economist.com/finance-and-economics/2025/10/27/the-end-of-the-rip-off-economy or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/11-03-25-The-Economist-The-End-Of-The-Rip-Off-12.pdf
13 https://www.realtor.com/advice/home-improvement/homeowners-cut-repair-costs-using-ai/
The Markets
Stock markets celebrated, but bond markets were cautious.
Last week, the Consumer Price Index (CPI) showed that inflation for September was lower than economists had anticipated. Both headline and core inflation (the latter excludes volatile food and energy prices) rose 3.0 percent year over year.1
“While the September figure is still a full percentage point above the Fed’s 2% target—and the highest level of inflation seen since January—it signals that the path of price growth is modest enough to allow for additional rate cuts,” reported Megan Leonhardt of Barron’s.2
Investors had been concerned that a jump in inflation might cause the Federal Reserve (Fed) to stop lowering the federal funds rate. The better-than-expected inflation report gave markets confidence the Fed will continue to lower the fed funds rate this year.2,3
Stock markets hit new records
Markets rose after the CPI was released. “The Dow Jones Industrial Average closed north of 47,000 for the first time on Friday…The Dow hit its second thousand-point milestone of 2025 after crossing the 46,000 threshold 31 trading days ago, according to Dow Jones Market Data. The S&P also notched its best week since Aug. 8,” reported Connor Smith of Barron’s.3
United States Treasuries rallied following the inflation news, too, but retreated after S&P Global released the Flash US Composite PMI® Output Index, reported Ye Xie of Bloomberg.4 The Index provides information about the state of U.S. manufacturing and services. A reading above 50 signals economic expansion, while a number below 50 suggests contraction.5
In October, the preliminary composite reading was 54.8, a three-month high and well above September’s 53.9 reading. Indexes measuring activity in the manufacturing and services sectors both accelerated from September to October.5
Faster growth is good news; however, bond investors recognized that it could affect the Fed’s rate-cut decisions. The Fed lowers the federal funds rate to stimulate the economy. If the business activity is growing, stimulus may be unnecessary.6
Social Security benefits will be higher in 2026
CPI data was calculated, despite the government shutdown, because it is required to determine the cost-of-living increase for Social Security. In 2026, benefits will be 2.8 percent higher, the equivalent of about $56 per month on average, according to the Social Security Administration blog.7
By the end of the week, major U.S. stock indexes were higher.8 Yields on many U.S. Treasuries with longer maturities moved higher over the week.9
Data as of 10/24/25 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | 1.9% | 15.5% | 16.9% | 21.4% | 14.8% | 12.6% |
| Dow Jones Global ex-U.S. Index | 1.5 | 25.1 | 20.1 | 17.8 | 7.5 | 5.0 |
| 10-year Treasury Note (yield only) | 4.0 | N/A | 4.2 | 4.2 | 0.8 | 2.1 |
| Gold (per ounce) | -2.9 | 57.2 | 50.2 | 35.5 | 16.7 | 13.4 |
| Bloomberg Commodity Index | 1.7 | 8.7 | 7.6 | -1.3 | 8.0 | 2.1 |
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
RECORD-SETTING WEATHER. For more than a decade, the National Oceanic and Atmospheric Administration kept a database that tracked weather and climate-related events that caused more than one billion dollars of damage. When the government discontinued the database in May of this year, a non-profit organization continued the work, reported Lauren Rosenthal of Bloomberg.10
From 1980 through June 2025, the U.S. experienced 417 severe weather events that cost a billion dollars or more. The total cost of all these events combined was about $3.1 trillion, according to the data. (In human terms, the cost was more than 17,000 deaths.)11
Over the first six months of this year, there were 14 events that did more than $101 billion worth of damage.11 It was a new record. The weather events included:12
| Event | Cost | |
| January | Wildfires in Los Angeles | $61.2 billion |
| February | Storms and tornadoes across the Southeast | 1.6 billion |
| March | Severe storms across Southern and Central U.S. | 1.4 billion |
| More than 180 tornadoes across many states in the Central, Southeastern, and Eastern U.S. | 10.6 billion | |
| Severe hailstorms in north Texas followed by extreme rainfall and flooding in south Texas. | 1.2 billion | |
| Tornadoes, damaging winds, and large hail across the North Central U.S. | 1.9 billion | |
| April | Severe storms, tornadoes, and flooding from the mid-Mississippi Valley into the Ohio Valley | 4.3 billion |
| Severe storms and tornadoes across portions of Nebraska, Kansas, Oklahoma, Texas, Iowa, and Missouri | 2.4 billion | |
| Severe storms, high winds, damaging hail, and tornadoes from Texas to New England | 1.9 billion | |
| May | 60 confirmed tornadoes across the Central and Eastern U.S. | 5.9 billion |
| A tornado outbreak across the Central and Southeastern U.S. | 2.6 billion | |
| Severe storms across southern states, including Texas, Oklahoma, Louisiana, and Mississippi | 1.2 billion | |
| June | Severe storms and tornadoes in the Southeastern and Central U.S. | 2.4 billion |
| High winds, hail, and isolated tornadoes in North Central and Northeastern states | 2.8 billion |
These events are causing homeowners insurance costs to increase. “Extreme weather events such as hurricanes, wildfires, and floods are becoming more frequent and more destructive, causing more property losses than home insurance providers can afford to cover… Insured property losses caused by weather catastrophes now routinely approach $100 billion per year, according to data from the Insurance Information Institute,” reported Catriona Kendall of U.S. News & World Report.13
WEEKLY FOCUS – THINK ABOUT IT
“A change in the weather is sufficient to recreate the world and ourselves.”14
–Marcel Proust, Novelist
* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.
* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss. * Consult your financial professional before making any investment decision.
Sources:
1 https://www.bls.gov/news.release/cpi.nr0.htm
2 https://www.barrons.com/livecoverage/inflation-september-cpi-report?mod=hp_LEDE_C_2 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-27-25-Barrons-September-Inflation-Was-Softer-2.pdf
3 https://www.barrons.com/livecoverage/stock-market-news-today-102425?mod=hp_LEDE_C_3 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-27-25-Barrons-DOW-Cracks-47000-3.pdf
4 https://www.bloomberg.com/news/articles/2025-10-24/us-treasuries-jump-as-inflation-report-reinforces-rate-cut-bets or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-27-25-Bloomberg-Bonds-Erase-Post-CPI-Gains-4.pdf
5 https://www.pmi.spglobal.com/Public/Home/PressRelease/eb6ffb6222214cbfbb42d44541c5ebbe
6 https://www.federalreserve.gov/faqs/why-do-interest-rates-matter.htm
7 https://blog.ssa.gov/social-security-announces-benefit-increase-for-2026/
8 https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-27-25-Barrons-DJIA-SP-NASDAQ-8.pdf
10 https://www.bloomberg.com/news/articles/2025-10-22/wildfires-and-severe-weather-drive-record-us-disaster-losses or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-27-25-Bloomberg-The-US-Saw-Record-10.pdf
11 https://www.climatecentral.org/climate-services/billion-dollar-disasters
13 https://www.usnews.com/insurance/homeowners-insurance/climate-change-and-rates
The Markets
Emotions were running high in financial markets.
You may recall the week before last ended with the Standard & Poor’s (S&P) 500 Index falling more than two percent after a flare-up in the trade war between the United States and China. It marked the end of the longest streak of trading days without a move of one percent or more since 2020, wrote Connor Smith of Barron’s.1
“On Monday, [stocks] bounced much of the way back after President Donald Trump said over the weekend, ‘Don’t worry about China.’” reported Teresa Rivas of Barron’s. “As indexes climbed, Wall Street’s fear gauge came back down from Friday’s spike: The CBOE Volatility Index, or VIX, closed Monday at 19.03, down 12% on the day.”2
From there, it was a bumpy week. When investors worried, the VIX rose. When they calmed, the VIX fell. The VIX rose above 20 – the baseline for normal volatility in the market – and fell below 20 multiple times over five days. It topped out at 28 on Friday before finishing the week just above 20.3 Here are a few of the factors that affected investors last week:
- Regional banks and bad credit. The head of a large global bank “raised a red flag—he used the word ‘cockroach’—about the bad credit that a handful of banks face. Bank stocks fell hard. The selloff came just after all of the big banks had posted solid earnings and confirmed that everything was under control, which underpins the case for buying the stocks,” reported Jacob Sonenshine of Barron’s.4
- An AI bubble. There was uncertainty about the prospects for artificial intelligence (AI), too. “…a growing group of analysts and investors say that the numbers simply don’t add up—that tech companies will never be able to generate the revenue necessary to recoup their spending, reported Christopher Beam of Bloomberg.5
- Tariffs and trade. It was a contentious week for trade. On Friday, the administration expressed “optimism that talks with Chinese officials could yield an agreement to defuse the tariff spat between the world’s two biggest economies,” reported Rita Nazareth of Bloomberg. Markets celebrated.6
Despite the tumult, major U.S. stock indexes finished the week higher.7 Yields on U.S. Treasuries ended the week near where they started.8
Data as of 10/17/25 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | 1.7% | 13.3% | 14.1% | 21.9% | 13.8% | 12.6% |
| Dow Jones Global ex-U.S. Index | 0.2 | 23.2 | 18.9 | 17.2 | 6.9 | 5.0 |
| 10-year Treasury Note (yield only) | 4.0 | N/A | 4.1 | 4.0 | 0.8 | 2.0 |
| Gold (per ounce) | 6.3 | 61.8 | 57.1 | 36.4 | 17.3 | 13.7 |
| Bloomberg Commodity Index | 1.5 | 7.0 | 7.4 | -2.3 | 7.5 | 1.8 |
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
THE STORIES THAT SHAPE THE ECONOMY. There is a branch of economic study called Narrative Economics. It’s the brainchild of Nobel Prize–winning economist Robert Shiller who believes that viral stories (narratives) influence human behavior and move the economy.9
Ernie Tedeschi, Director of Economics at the Budget Lab at Yale, talked about narratives in a Bloomberg opinion piece recently. He said three stories are influencing our perceptions about the economy and he believes these narratives should be treated with some skepticism.10
Narrative #1: Artificial intelligence (AI) is behind the surge in U.S. economic growth. Tedeschi says AI may be getting too much credit.Investment in AI surged by 40 percent – to $1.4 trillion – from 2021 to 2025. What people forget is that a lot of that investment came from outside the United States.10
During the first half of this year, “AI-related commodities — software, information processing equipment and data centers — accounted for 1.3 percentage points of the 1.6% annualized real GDP growth…a staggering amount.” However, once AI-related imports are subtracted, AI contributed 0.5 percentage points to GDP. AI still a played a significant role in growth, but other factors are also having a sizeable effect.10
Narrative #2: AI is weakening the labor market. There is a lot of talk about how AI is replacing, or will replace, workers. This idea should be taken with a grain of salt because, “The biggest increase in unemployment over the last two years is in occupations with both the highest and lowest exposure to AI.”10 In other words, other factors are contributing to unemployment.
Narrative #3: Wealthy consumers are driving economic growth. Tedeschi said that it’s possible the United States is in a K-shaped recovery where the wealthy are doing well, while people with less wealth are not. However, he cautioned that “reliable spending data, with the necessary detail to track different households and validate private data, is often lagged by years.”10
The Economist recently offered a new narrative that may influence our outlook: The stock market is responsible.11 Here’s what they said:
“But does the stockmarket power the economy? At most points in time, it would be a ridiculous question. In recent months, though, the rise in American share prices has coincided with, and been fed by, a rush of popular enthusiasm for investing. And as people see the [markets] go up, they become more likely to spend. Now the answer to the question has important implications for the path of America’s stockmarket boom and its economy.”11
It’s something to think about.
WEEKLY FOCUS – THINK ABOUT IT
“Happiness is when what you think, what you say, and what you do are in harmony.”12 –Mahatma Gandhi, Spiritual and political leader
* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.
* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
Sources:
1 https://www.barrons.com/livecoverage/stock-market-news-today-101425/card/the-vix-is-spiking-the-market-now-sits-at-an-inflection-point–VsmDYuAtmJ56PfEycSLX?mod=Searchresults or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-20-25-Barrons-The-VIX-Is-Spiking-1.pdf
2 https://www.barrons.com/articles/stocks-rebound-bank-earnings-bull-market-596bf65d?mod=Searchresults or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-20-25-Barrons-Review-and-Preview-A-Quick-Recovery-2.pdf
3 https://www.cboe.com/tradable-products/vix/ or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-20-25-Yahoo-Finance-VIX-Data-Chart-3.pdf
4 https://www.barrons.com/articles/bank-stocks-buy-jamie-dimon-cockroach-f2374ee1?mod=hp_LEDE_C_1_B_1 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-20-25-Barrons-Bank-Stocks-Get-Hit-By-Dimons-4.pdf
5 https://www.bloomberg.com/news/newsletters/2025-10-16/is-this-an-ai-bubble-then-where-are-the-short-sellers or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-20-25-Bloomberg-If-This-Is-An-AI-Bubble-5.pdf
6 https://www.bloomberg.com/news/articles/2025-10-16/stock-market-today-dow-s-p-live-updates?srnd=homepage-americas or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-20-25-Bloomberg-Stocks-Climb-As-Trump-Soothes-6.pdf
7 https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-20-25-Barrons-DJIA-SP-NASDAQ-7.pdf
10 https://www.bloomberg.com/opinion/articles/2025-10-15/ai-effect-on-us-economy-is-exaggerated or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-20-25-Bloomberg-Three-Exaggerations-About-The-US-Economy-10.pdf
11 https://www.economist.com/finance-and-economics/2025/10/09/the-stockmarket-is-fuelling-americas-economy or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-20-25-The-Economist-The-Stock-Market-Is-Fueling-11.pdf
The Markets
Filling the data void.
Ancient Greek Philosopher Aristotle theorized that nature abhors a void and fills it.1 Anyone who has ever cleared a garden patch and delayed planting understands the idea. Before long, the empty ground is teeming with opportunistic plants.
The government shutdown created a data void. Usually, the government delivers robust economic data that analysts and investors rely on to better understand where the American economy has been, where it is now, and where it may be going. It’s information the United States Federal Reserve (Fed) relies on to determine whether a rate cut or increase is necessary, reported Megan Leonhardt of Barron’s.2
One critical piece of data that has been delayed because of the shutdown is the September 2025 unemployment report. With government data unavailable, Wall Street is turning to alternative sources of information—and those sources are telling different stories.2 For example, we’ve read that in September U.S. employment:
- Rebounded. A top financial firm reported “that the economy added about 80,000 jobs in September, showing a rebound from sluggish labor-market growth during the four preceding months,” according to Matt Grossman of Dow Jones via Barron’s.3
- Remained steady. The Chicago Federal Reserve’s Real-Time Unemployment Rate Forecast indicated that the unemployment rate remained unchanged at 4.3 percent for September.4
- Slowed. A global investment company reported, “…data from our portfolio suggest that the collapse in U.S. payroll employment growth continued in September, with monthly gains falling from an average of over 200,000 at the start of the year to just 15,000 over the past three months.”5
- Shrank. A top payroll processor found that “private employers shed 32,000 jobs in September.”6 It’s a finding that would be at odds with economists’ pre-shutdown forecasts, reported Leonhardt.2
The breakeven employment rate, which is the number of new jobs that must be created to keep the employment rate steady, is 32,000 to 82,000, according to the calculations of St. Louis Fed economists Alexander Bick and Victoria Gregory.7
Another critical piece of data is the Consumer Price Index (CPI), which measures how prices change from month to month. The October CPI is particularly important because it is used to calculate cost-of-living increases for Social Security recipients. The Social Security Administration is legally required to publish its annual cost-of-living increase for 2026 before November 1, reported Emily Peck of Axios. That’s why the Bureau of Labor Statistics began recalling employees last week The September CPI will be late, but it will be available in October.8
Last Friday, major U.S. stock indexes pulled back sharply after trade tensions reignited between the United States and China, reported Connor Smith of Barron’s.9 Yields on most maturities of U.S. Treasuries moved lower on Friday.10
Data as of 10/10/25 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | -2.4% | 11.4% | 13.4% | 22.0% | 13.1% | 12.5% |
| Dow Jones Global ex-U.S. Index | -1.5 | 22.9 | 15.8 | 17.2 | 6.6 | 5.0 |
| 10-year Treasury Note (yield only) | 4.1 | N/A | 4.1 | 3.9 | 0.8 | 2.1 |
| Gold (per ounce) | 2.3 | 52.2 | 51.2 | 33.33 | 15.6 | 13.1 |
| Bloomberg Commodity Index | -1.2 | 5.4 | 3.5 | -3.6 | 7.4 | 1.5 |
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
A ROOM OF ONE’S OWN. Housing is expensive. Buying a home is out of reach for many Americans because “home prices are historically high relative to incomes”, reported Peyton Whitney of the Joint Center for Housing Studies at Harvard. In 2024, the price of a median single-family home was five times the median household income. (Affordability of homes varies by region.)11
Renting isn’t cheap either. The Economist analyzed the affordability of American cities for renters who prefer to live alone. They used “…the rule that a tenant should spend no more than 30% of their gross income on rent. Using rental prices gathered by…an online property platform, we calculated the salary needed to afford a typical studio apartment in each city.”12
Based on median rental prices for August 2025, the publication found the most affordable cities in the United States included: 12
- Wichita, Kansas
- Baton Rouge, Louisiana
- Lincoln, Nebraska
The report found that some previously unaffordable cities have become affordable, including Knoxville, Tennessee; Denver, Colorado; Madison, Wisconsin; and Norfolk, Virginia.12
Then, there are the cities that are affordable only if a renter earns a well-above-average income. The least affordable cities for renters hoping to live alone included:12
- New York City, New York
- Miami, Florida
- Jersey City, New Jersey
In addition, “Several of the newly prohibitive cities are in Texas…Last year, both Houston and Dallas were deemed affordable…This year, they fell below that threshold. In Austin, monthly studio rents are now $1,580, a 25% jump from 2024. This requires a salary of $63,200, more than $10,000 higher than the city’s median wage…Texas has experienced an influx of people in recent years. Many tech firms and other big companies have moved their offices to the state, drawn by low taxes and favorable regulation. Salaries have increased, but rents are rising faster,” reported The Economist.12
WEEKLY FOCUS – THINK ABOUT IT
“The ache for home lives in all of us. The safe place where we can go as we are and not be questioned.”13
–Maya Angelou, Memoirist and poet
* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.
* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
Sources:
1 https://en.wikipedia.org/wiki/Horror_vacui_(philosophy)
2 https://www.barrons.com/articles/shutdown-muddles-the-jobs-picture-for-economists-fed-48f547ce or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-13-25-Barrons-Shutdown-Muddles-The-Job-2.pdf
3 https://www.barrons.com/livecoverage/stock-market-news-today-100625/card/missing-september-economy-stats-seen-as-benign-4WjOev2GisJEdq7U5R3Z?mod=Searchresults or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-13-25-Barrons-Missing-September-Economy-3.pdf
4 https://www.chicagofed.org/research/data/chicago-fed-labor-market-indicators/latest-release
5 https://www.carlyle.com/carlyle-compass/out-left-field-labor-market
6 https://adpemploymentreport.com
8 https://www.axios.com/2025/10/10/shutdown-monthly-inflation-report-social-security or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-13-25-Axios-Why-The-Shutdown-Isnt-Stopping-8.pdf
9 https://www.barrons.com/livecoverage/stock-market-news-today-101025?modCode=hp_LEDE_C_LC or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-13-25-Barrons-NASDAQ-Sinks-3.6%25-9.pdf
11 https://www.jchs.harvard.edu/blog/home-prices-surge-five-times-median-income-nearing-historic-highs
12 https://www.economist.com/graphic-detail/2025/09/30/where-can-americans-afford-to-live-solo-in-2025 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-13-25-The-Economist-Where-Can-Americans-Afford-12.pdf