The Markets
It was a stellar quarter for investors.
The last three months have delivered stock market gains amid signs the economy might not be doing as well as previously thought. Here’s what we saw:
Stock markets advanced
Solid corporate earnings growth, enthusiasm for artificial intelligence (AI), and expectations for a Federal Reserve (Fed) rate cut helped drive stock markets in the United States higher during the third quarter of 2025.1
“The broad U.S. equity indices were higher across the board in both September and Q3. For the S&P [Standard & Poor’s] 500 and Nasdaq-100, September marked their 5th and 6th consecutive monthly gains, respectively. And for the S&P 500, this was its 2nd best September…in 27 years,” reported the Nasdaq Market Intelligence Desk Team.2
Stock valuations moved higher
The downside of recent stock market performance is that valuations have reached lofty levels. As a result, investors are paying “the most for future earnings in more than two decades, adding a new element of risk to the market’s rally,” reported Martin Baccardax of Barron’s.3 The risk is that earnings may not meet investors’ expectations, which could lead to lower stock prices.
Questions rose about the strength of the economy
Economic data is usually revised several times before the final numbers arrive. In September, the employment report revision showed 911,000 fewer jobs may have been created over the past twelve months than previously thought.4 The change raised questions about the strength of the economy – and the quality and collection of data for the report, reported Jeff Cox of CNBC.5
“The revisions were more than 50% higher than last year’s adjustment and the largest on record going back to 2002. On a monthly basis, they suggest average job growth of 76,000 less than initially reported.”5
The Fed lowered the federal funds rate
Investors have been anticipating a Fed rate cut for some time. In September, the Fed’s concerns about inflation were offset by data suggesting the U.S. labor market is softening rapidly, and the Fed lowered the federal funds rate by one-quarter percentage point.6
While investors expect more rate cuts this year, it’s unclear whether that will happen. “At the center of the tension are rising prices. While inflation has slowed from its pandemic highs, it remains above the Fed’s 2% target. Several regional Fed presidents cautioned on Monday that policymakers shouldn’t move too quickly to ease policy, even as investors and Wall Street analysts bet on more cuts,” reported Nicole Goodkind of Barron’s.7
Consumer sentiment moved lower, too
While investors had a lot to celebrate in the third quarter, consumers’ optimism faded in August and September. The University of Michigan’s Consumer Sentiment Index showed that sentiment was down about five percent month over month in September, and more than 21 percent year over year.8
“Although September’s decline was relatively modest, it was still seen across a broad swath of the population, across groups by age, income, and education, and all five index components. A key exception: sentiment for consumers with larger stock holdings held steady in September, while for those with smaller or no holdings, sentiment decreased,” reported Surveys of Consumers Director Joanne Hsu.8
The fourth quarter began with a government shutdown. The closure had little effect on market optimism, and major U.S. stock indexes moved higher last week.1 Yields on U.S. Treasuries generally dipped lower or remained steady over the week.9
Data as of 10/3/25 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | 1.1% | 14.2% | 17.8% | 23.4% | 14.5% | 13.0% |
| Dow Jones Global ex-U.S. Index | 2.7 | 24.8 | 16.7 | 17.7 | 7.5 | 5.5 |
| 10-year Treasury Note (yield only) | 4.1 | N/A | 3.9 | 3.7 | 0.8 | 2.1 |
| Gold (per ounce) | 3.1 | 48.8 | 46.8 | 32.6 | 15.3 | 13.1 |
| Bloomberg Commodity Index | 0.2 | 6.7 | 3.0 | -2.2 | 8.2 | 1.7 |
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 DOES A GOVERNMENT SHUTDOWN MEAN FOR INVESTORS? Last week, the U.S. government closed after Congress failed to pass a temporary funding measure to keep it open. The sticking point appeared to be whether the government should continue to provide tax credits to offset the cost of healthcare premiums under the Affordable Care Act, reported Anita Hamilton of Barron’s. The credits are scheduled to expire at the end of 2025.10
Historically, government shutdowns have had little impact on financial markets. However, some analysts believe this shutdown may create additional financial market volatility. The good news is, when markets are negatively affected, they tend to recover quickly, reported Callum Keown of Barron’s. In any case, investors should be aware of shorter-term risks, including:11
- Delayed Initial Public Offerings (IPOs). When a private company raises capital by selling shares to the public for the first time, it is called an IPO. “With the Securities and Exchange Commission running only essential functions on a skeleton staff, the agency will stop processing IPO paperwork, leaving companies primed for Wall Street debuts…in limbo,” reported Manya Saini and Niket Nishant of Reuters.12
- Delayed drug approvals. The U.S. Food and Drug Administration (FDA) will continue to review current product applications during the shutdown; however, it has stopped accepting new applications, reported Kristin Jensen of Biopharma Dive.13 The FDA is funded through user fees, which it cannot collect when the government is closed, reported Josh Nathan-Kazis of Barron’s. That could create issues if the shutdown lasts for a significant period.14
- Challenges for federal contractors. The shutdown affects U.S. government employees – and everyone employed by a government contractor. “While some federal contracts will stop work in the event of a shutdown, others will continue on, particularly if they’re funded by appropriations from past fiscal years…however, problems emerge when contractors need an action by or information from a federal employee who is furloughed,” reported Sean Michael Newhouse of Government Executive. If the administration decides to layoff government employees, the issue could become more complicated.15
- Lack of economic data. The Bureau of Labor Statistics, Bureau of Economic Analysis and Census Bureau stop collecting and distributing data when the government shuts down. As a result, the shutdown “will shut off the flow of key economic data at a moment of uncertainty among policymakers and investors about the health of the U.S. job market, the trajectory of inflation and the strength of consumer spending and business investment,” reported Reuters.16
The overall effect of the shutdown will depend on how long it lasts.
WEEKLY FOCUS – THINK ABOUT IT
“I don’t think that you can be an extraordinary leader unless you love your people sincerely. Now history shows us that you can win battles, you can accomplish missions, you can build buildings, and you can win games without loving your people, because a lot of people have done it that way. But I am convinced that you and your organization, your unit, your group will never be extraordinary in the long run without…genuine concern for your people.”17 – Colonel Arthur J. Athens, United States Marine Corps Reserve (Retired)
* 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/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-06-25-Barrons-DJIA-SP-NASDAQ-1.pdf
2 https://www.nasdaq.com/articles/september-third-quarter-2025-review-and-outlook
3 https://www.barrons.com/articles/stock-market-sp500-overvalued-inflation-jobs-earnings-5f24cda6 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-06-25-Barrons-Is-The-Stock-Market-Overvalued-3.pdf
4 https://www.bls.gov/news.release/prebmk.nr0.htm
5 https://www.cnbc.com/2025/09/09/jobs-report-revisions-september-2025-.html
6 https://www.federalreserve.gov/newsevents/pressreleases/monetary20250917a.htm
7 https://www.barrons.com/articles/the-federal-reserve-rates-inflation-market-c8c19bab or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-06-25-Barrons-The-Market-Is-Betting-7.pdf
8 https://www.sca.isr.umich.edu or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-06-25-Survey-of-Consumers-University-of-Michigan-8.pdf
10 https://www.barrons.com/livecoverage/shutdown-government-news/card/marketplace-health-plan-costs-will-rise-114-if-subsidies-expire-kff-qfCUxwyDDjhHTp8RJL2w?mod=hp_LEDE_C_1_B_4 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-06-25-Barrons-Marketplace-Health-Plan-Costs-10.pdf
11 https://www.barrons.com/livecoverage/shutdown-government-news/card/delays-to-ipos-drug-approvals-jobs-data-and-more-impacts-of-a-longer-shutdown-D8BVvUg1MYK4EkYtOkIj?mod=hp_LEDE_C_1_B_1 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-06-25-Barrons-Delay-To-IPOs-Drug-Approvals-11.pdf
13 https://www.biopharmadive.com/news/fda-government-shutdown-new-drug-applications-reviews/761576/
14 https://www.barrons.com/livecoverage/shutdown-government-news/card/fda-won-t-be-significantly-disrupted-by-a-short-shutdown-0MhUBQLiCMWcj6wYhHCf or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/10-06-25-Barrons-FDA-Wont-Be-Significantly-14.pdf
17 https://www.usmcu.edu/Portals/218/Art%20Athens%20speech.pdf
The Markets
The economy is all right.
Last week, revised economic figures showed the United States economy grew faster from April through June than previously thought. The upward revision was primarily due to a revised estimate for consumer spending over the period, according to Connor Smith of Barron’s.1
“American consumers, the engine of the world’s largest economy, have remained resilient in the face of tariffs and economic uncertainty…The continued strength in spending, which has defied worries about a slowdown, is in contrast to recent data showing a weakening labor market…But initial claims for unemployment insurance fell last week to their lowest level since July…in a sign that the jobs market might not be in as dire shape as other data have suggested,” reported Danielle Kay of the BBC.2
The contrast between consumer spending and consumer sentiment was striking. Consumer sentiment moved lower again in September and is down more than 21 percent this year, according to the University of Michigan’s Consumer Sentiment Survey.3
“Nationally, not only did macroeconomic expectations fall, particularly for labor markets and business conditions, but personal expectations did as well, with a softening outlook for [consumers’] own incomes and personal finances. Consumers continue to express frustration over the persistence of high prices, with 44% spontaneously mentioning that high prices are eroding their personal finances, the highest reading in a year,” wrote Surveys of Consumers Director Joanne Hsu.3
The inflation picture did not improve in August. Prices, as measured by the personal consumption expenditures price index, were up 2.7 percent year over year. When volatile food and energy prices were excluded, prices rose 2.9 percent year over year.4 Both measures are well above the Federal Reserve’s two percent inflation target.5
Last week, major U.S. stock indexes rallied on Friday, but were not able to recoup losses from earlier in the week, reported Sean Conlon of CNBC.6 Yields moved higher over the week for all but the longest maturities of U.S. Treasuries.7
Data as of 9/26/25 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | 1.2% | 13.3% | 16.6% | 19.7% | 15.2% | 13.0% |
| Dow Jones Global ex-U.S. Index | 0.4 | 22.6 | 16.3 | 14.5 | 7.3 | 5.3 |
| 10-year Treasury Note (yield only) | 4.1 | N/A | 3.7 | 3.5 | 0.7 | 2.2 |
| Gold (per ounce) | 0.3 | 40.3 | 42.2 | 30.1 | 13.9 | 12.5 |
| Bloomberg Commodity Index | -0.8 | 4.3 | 5.2 | -4.1 | 7.7 | 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.
IT’S NOT THE NOBEL PRIZE. “Many scientists dream of winning a Nobel Prize, an accolade that brings worldwide recognition, prestige and a place in the pantheon of greatness alongside the likes of Albert Einstein, Marie Curie and Francis Crick. Then there are the other awards — the Ig Nobel prizes, which were devised to highlight research that makes people laugh, then think,” reported Chris Simms in the journal Nature.8
The 35th First Annual Ig Nobel Prize ceremony took place in mid-September. This year’s awards included:9
- Peace Prize. Fritz Renner, Inge Kersbergen, Matt Field, and Jessica Werthmann were recognized for investigating the effects of alcohol consumption on foreign language pronunciation among people who have just learned a language. Turns out, having a few drinks improves the foreign language skills of some people – but not their ability to self-rate their skills. The data were published in Dutch Courage? Effects of Acute Alcohol Consumption on Self-Ratings and Observer Ratings of Foreign Language Skills.9,10
- Biology Prize. “Biting flies are the most damaging arthropod pests of cattle worldwide and the economic impact of biting flies on the United States cattle production was estimated at [$2.211 billion] per year,” according to a team of researchers in Japan who studied ways to address the issue. They found that disguising cows as zebras – by painting them with black and white stripes – greatly reduced the number of fly bites.9,11
- Engineering Design Prize. Vikash Kumar and Sarthak Mittal took home an Ig for their paper titled, Smelly Shoes – An Opportunity for Shoe Rack Re-Design. The pair explored how stinky shoes affect owner satisfaction with shoe racks in India. They concluded there is market potential for a new type of device with a built-in deodorizer.9,12
- Physics Prize. Cacio e pepe is one of those deceptively simple Italian sauces that can be quite challenging to prepare. Researchers from Spain, Italy, Germany, and Austria studied the cooking process to develop a scientific recipe. They explained, “A true Italian grandmother or a skilled home chef from Rome would never need a scientific recipe for Cacio e pepe, relying instead on instinct and years of experience. For everyone else, this guide offers a practical way to master the dish.”The recipe can be found in the paper, Phase behavior of Cacio e pepe sauce.9,13
Prizes also were awarded in the fields of literature, psychology, nutrition, pediatrics, chemistry, and aviation.
WEEKLY FOCUS – THINK ABOUT IT
“The ‘silly’ question is the first intimation of some totally new development.”14–Alfred Whitehead, Mathematician and philosopher
* 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-092525/card/stocks-drop-for-third-straight-day-despite-upbeat-economic-data-7ZI68Vfc4Tr13YOsRiNH?mod=Searchresults or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/09-29-25-Barrons-Stock-Drop-For-Third-Straight-Day-1.pdf
2 https://www.bbc.com/news/articles/cjedze7e95lo
3 https://www.sca.isr.umich.edu
4 https://www.bea.gov/sites/default/files/2025-09/pi0825.pdf [Table 7]
5 https://www.federalreserve.gov/economy-at-a-glance-inflation-pce.htm
6 https://www.cnbc.com/2025/09/25/stock-market-today-live-updates.html#
8 https://www.nature.com/articles/d41586-025-03045-0
9 https://improbable.com/ig/winners/#ig2025
10 https://journals.sagepub.com/doi/10.1177/0269881117735687
11 https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0223447
13 https://pubs.aip.org/aip/pof/article/37/4/044122/3345324/Phase-behavior-of-Cacio-e-Pepe-sauce 14https://www.goodreads.com/quotes/tag/silly?page=2
The Markets
The bulls were running.
Last week, investors rejoiced after the Federal Reserve Open Market Committee (FOMC) lowered the federal funds rate by a quarter percentage point.1 Major U.S. stock indexes set new record highs.2
FOMC projections for the future suggested more rate cuts could be ahead. “The updated ‘dot plot’ forecasts three cuts in 2025, up from two in June, but the outlook reveals deep uncertainty among policymakers. The median forecast masks a razor-thin 10-9 split among the 19 participants, what economists call a ‘soft median’ that suggests little consensus about the path ahead, reported Nicole Goodkind of Barron’s.3
During a press conference, Federal Reserve (Fed) Chair Jerome Powell explained that the rate cut was a response to extraordinary economic circumstances.4
“I think you could think of this, in a way, as a risk management cut…it is such an unusual situation. Ordinarily when the labor market is weak, inflation is low; and when the labor market is strong, that’s when you got to be careful about inflation. So, we have a situation where we have two-sided risk, and that means there’s no risk-free path. And so, it’s quite a difficult situation for policymakers.”4
U.S. Treasury markets were less confident than stock markets following the Fed rate cut. The yield on the benchmark 10-year Treasury note dipped below 4 percent before moving higher again, reported Martin Baccardax of Barron’s. Rates moved higher because bond investors are concerned that inflation might accelerate. Rising inflation reduces the current value of interest payments, as well as the value of invested principal.5
Prospective home buyers won’t be happy about the bond market’s response. The 10-year Treasury is the benchmark for mortgage rates. “Rising 10-year yields are also an issue for the housing market, which remains stuck in low gear amid record-high prices, slow new construction and mortgage rates that keep homeowners reluctant to sell and refinance,” reported Baccardax.5
Last week, major U.S. stock indexes finished higher.6 Treasuries were mixed, with yields on shorter maturities moving lower and yields on longer maturities moving higher.7
Data as of 9/19/25 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | 1.2% | 13.3% | 16.6% | 19.7% | 15.2% | 13.0% |
| Dow Jones Global ex-U.S. Index | 0.4 | 22.6 | 16.3 | 14.5 | 7.3 | 5.3 |
| 10-year Treasury Note (yield only) | 4.1 | N/A | 3.7 | 3.5 | 0.7 | 2.2 |
| Gold (per ounce) | 0.3 | 40.3 | 42.2 | 30.1 | 13.9 | 12.5 |
| Bloomberg Commodity Index | -0.8 | 4.3 | 5.2 | -4.1 | 7.7 | 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.
THE ALPHABET SOUP OF ECONOMIC RECOVERY. Economists find the alphabet to be a handy tool for describing economic recoveries. For instance, there are V-shaped recoveries and U-shaped recoveries. The primary difference between the two is the length of the recession. When the economy recovers, enters another recession and recovers again, the recovery is shaped like a W. The dreaded L-shaped recovery occurs when an economy takes years to return to previous levels of growth.8
Since the COVID-19 recession ended, the economic recovery in the United States has been K-shaped. One group of Americans has recovered from recession and is doing relatively well. The other has yet to recover fully from the recession. The prongs of the letter “K” represents the split in their economic experiences.8
“One way to think about the post-rate-hike economy is as a bifurcation between haves and have-nots as rising underemployment, sticky inflation and higher interest rates hit lower-income households more. Small businesses have also suffered disproportionately from high interest rates and tariffs. High-income households are basically keeping the economy afloat…,” reported Edward Harrison of Bloomberg.9
Last week, the FICO Credit Score Report for the second quarter of 2025 reflected the K-shaped economy.10 The number of people in the highest and lowest credit ranges both increased, and there were 11 percent fewer people in the mid-range.11 In addition, the report found:
- U.S. credit scores fell. The average credit score was two points lower than it was in the previous year, largely because of rising credit card use and a surge in missed payments as student loan delinquency reporting resumed.11
- Young people were struggling. The group with the biggest decline in credit scores was 18- to 29-year-olds. This group typically has more student loan debt than older populations.11
- Loan delinquencies were up.
- Auto loans were paid first. When Americans must decide what to pay first, they typically choose car loans. Next up is the mortgage, followed by credit cards and student loans.11
The K-shaped economy reflects uneven economic progress since the pandemic.
WEEKLY FOCUS – THINK ABOUT IT
“Human greatness does not lie in wealth or power, but in character and goodness. People are just people, and all people have faults and shortcomings, but all of us are born with a basic goodness.”12
– Anne Frank, Diarist
* 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.federalreserve.gov/newsevents/pressreleases/monetary20250917a.htm
3 https://www.barrons.com/articles/fed-september-meeting-rate-cut-977abbde or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/09-22-25-Barrons-The-Feds-Just-Trimmed-Rates-3.pdf
4 https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20250917.pdf [Pp. 1, 7, 11, 24]
5 https://www.barrons.com/articles/treasury-yields-fed-rates-stocks-b4844a34 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/09-22-25-Barrons-Treasury-Market-Wobbles-5.pdf
6 https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/09-22-25-Barrons-DJIA-SP-NASDAQ-6.pdf
8 https://en.wikipedia.org/wiki/Recession_shapes
9 https://www.bloomberg.com/news/newsletters/2025-09-17/the-recession-is-already-happening-for-many-americans? or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/09-22-25-Bloomberg-The-Recession-Is-Already-Happening-9.pdf
10 https://www.fico.com/en/resource-access/download/55026 [Pp. 4-5]
12 https://www.goodreads.com/quotes/7108-human-greatness-does-not-lie-in-wealth-or-power-but
The Markets
What are your expectations for inflation?
Inflation occurs when the prices of goods and services increase. Last week, the Consumer Price Index (CPI) showed that inflation moved modestly higher from July to August. Prices increased 2.9 percent, year over year, remaining above the Federal Reserve’s long-term goal of 2 percent inflation. Overall, prices increased 0.4 percent, month over month, from July to August.1,2
Grocery prices rose faster than other prices. The cost of fresh fruits and vegetables rose 1.6 percent from July to August, led by tomato prices, which were 4.5 percent higher. The cost of meat also rose faster than headline inflation, up 1.0 percent month over month, with a 2.7 percent rise in the beef index. In contrast, the price of sweet rolls, coffee cakes, and doughnuts fell by 2.3 percent month over month, and egg prices remained steady.1
Why did food prices rise?
“Tariffs are a factor, but they are only one piece of the puzzle,” according to a restaurant-industry source cited by Megan Leonhardt of Barron’s. “Food costs are also climbing because of labor shortages in production and distribution, elevated transportation expenses, and weather events that disrupt harvests and livestock production.”3
Consumers anticipate prices may increase further, according to the University of Michigan’s September Consumer Sentiment Index, which was released last week.4
“Year-ahead inflation expectations held steady at 4.8 [percent], unchanged from August. Long-run inflation expectations moved up for the second straight month to 3.9 [percent] in September. This current reading is considerably lower than the 4.4% seen in April,” reported Surveys of Consumers Director Joanne Hsu.4
Stock markets were undaunted by economic data.
Investors remained confident that weakness in the labor market would weigh more heavily in the Fed’s rate decision next week than inflation data would. “Markets have fully priced in a September cut and now anticipate three reductions this year, compared to two just weeks ago,” reported Indradip Ghosh of Reuters. 5
Market optimism pushed major U.S. stock indexes higher last week.6 Treasuries were mixed, with yields on the longest maturities of Treasuries ending the week near where they started it.7
Data as of 9/12/25 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | 1.6% | 12.0% | 17.7% | 17.0% | 14.2% | 12.9% |
| Dow Jones Global ex-U.S. Index | 1.8 | 22.1 | 18.4 | 12.6 | 6.8 | 5.3 |
| 10-year Treasury Note (yield only) | 4.1 | N/A | 3.7 | 3.4 | 0.7 | 2.2 |
| Gold (per ounce) | 1.6 | 39.8 | 43.4 | 28.4 | 13.3 | 12.7 |
| Bloomberg Commodity Index | 1.3 | 5.1 | 8.5 | -4.9 | 7.7 | 1.6 |
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 SCARCITY OF READING. We live in an information-rich world where people spend hours perusing social media. There’s even a slang term to describe it: brainrot. The term “refers to material of low or addictive quality, typically in online media, that preoccupies someone to the point it is said to affect mental functioning,” according to the Merriam Webster dictionary.8
In the 1970s, Nobel Prize-winner Herbert Simon theorized that “the wealth of information means a dearth of something else: a scarcity of whatever it is that information consumes. What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention and a need to allocate that attention efficiently…”9
Reading appears to be suffering from a poverty of attention
In 2004, about 28 percent of the 10,000 people who participated in the government’s “American Time Use Survey” read print or digital books, perused magazines, or listened to audiobooks for the pleasure of it, according to a 2025 research paper published in iScience. Twenty years later, just 16 percent did.10
Falling literacy levels may affect the desire to read. The Program for The International
Assessment Of Adult Competencies (PIAAC) uses a 500-point scale to measure literacy and divides its assessment into six levels of literacy.12
- Below Level 1, Level 1: In 2023, 28 percent of U.S. adults, ages 16 to 65, scored at these levels, a 10 percent increase from a decade earlier.13
- Level 2. In 2023, 29 percent of U.S. adults scored at this level, down from 33 percent a decade earlier.13
- Levels 3, 4, and 5: In 2023, 44 percent of U.S. adults were at this level, down from 50 percent a decade earlier.13
Whencompared to the 31 countries and subnational economies that participated in the study, the U.S. ranked 14th in literacy.14
Reading skills affect economic growth
There is a significant relationship between reading and economic well-being, according to 2020 research conducted by Gallup and The Barbara Bush Foundation for Family Literacy. Gallup’s Principal Economist Jonathan Rothwell reported, “Eradicating illiteracy would have enormous economic benefits. This analysis finds that getting all U.S. adults to at least a Level 3 of literacy proficiency would generate an additional $2.2 trillion in annual income for the country. That is 10 [percent] of the gross domestic product.”15
WEEKLY FOCUS – THINK ABOUT IT
“Libraries have always seemed like the richest places in the world to me, and I’ve done some of my best learning and thinking thanks to them. Libraries and librarians have definitely changed my life, and the lives of countless other Americans.”16
– Barbara Bush, Former First Lady
* 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 [Report, Tables 1 and 2]
2 https://www.federalreserve.gov/faqs/economy_14400.htm
3 https://www.barrons.com/articles/food-price-inflation-tariffs-eggs-2a801707 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/09-15-25-Barrons-Food-Price-Inflation-Isnt-Going-Away-3.pdf
4 https://www.sca.isr.umich.edu
6 https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/09-15-25-Barrons-DJIA-SP-NASDAQ-6.pdf
8 https://www.merriam-webster.com/slang/brain-rot
9 https://www.goodreads.com/author/quotes/89879.Herbert_A_Simon
10 https://www.cell.com/iscience/fulltext/S2589-0042(25)01549-4
11 https://today.yougov.com/entertainment/articles/48239-54-percent-of-americans-read-a-book-this-year\
12 https://nces.ed.gov/surveys/piaac/measure.asp
13 https://nces.ed.gov/surveys/piaac/2023/national_results.asp
14 https://nces.ed.gov/whatsnew/press_releases/12_10_2024.asp
15 https://www.barbarabush.org/wp-content/uploads/2020/09/BBFoundation_GainsFromEradicatingIlliteracy_9_8.pdf 16https://www.azquotes.com/quotes/topics/librarian.html?p=12