“When it comes to looking at the the totality of the labor data, it demands context. It demands study….by all accounts, the labor market is in balance, almost perfect balance.
The major issue when it comes to what you hear, versus what reality is, versus maybe predicting the future is, you’re only going to be able to ascertain the reality through research, through looking at the data objectively.
And the reality behind the headlines is that while the labor market is in balance, that balance only includes creating possibly on average 50,000 jobs a month. And you’re not going to find economists with the ability, the actual ability, to appreciate 50,000 jobs on average a month when you’re coming from levels of 100, 150 to 200,000 a month. That doesn’t look strong.
It doesn’t look healthy when juxtaposed to that level of growth; What we’re seeing over the last three months doesn’t look healthy. It doesn’t look like what we’ve become accustomed to.
So, the natural response is that it’s weak. That’s how it’s being characterized. It’s just not the reality. We have a numerator, and we have a denominator when it comes to the labor data. And the fact is they’re both in perfect balance, supply and demand.
The problem is that one is getting cut so dramatically that it’s influencing the other in the same direction. Right? Both the labor force i.e. supply coming down is basically forcing the demand lower as well. The demand for labor, job creation.
So, it all takes context, it all takes study, but that is the reality. The problem with that reality, admittedly, is that it only can sustain itself for so long before something does actually IMBALANCE the labor market right?
I mean, if we just keep on lowering the the labor force participation rate, at some point, employers are going to just stop hiring, if not start laying off folks. It becomes this self-fulfilling mechanism. So there, there’s nothing good that historically comes from a perpetually lower labor force participation rate.
That kind of a situation or dynamic just doesn’t end well because of its influence on job growth.
So from a historic perspective and a fact-driven perspective, whatever policies are in place, and we know the policies that are in place with respect to influencing the labor participation rate here in 2025, they’re not good!
Those policies are not good. It’s not a political statement. It’s a data-driven fact. Like it, don’t like it, that’s your politics possibly. But the facts are still the facts. This policy isn’t working to the benefit of the overall economy.“
– Seth Golden, Chief Market Strategist at FinomGroup.com
(Contributor/Premium Members Only)
Mid-week Summary
Wednesday, September 10th, 2025
Welcome to Market Mania!
Where growth scares aren’t always recessions, and every dip dares investors to blink first.
As summer winds down, the market stands at a crossroads: macro data has softened but the S&P 500 remains near all-time highs, leaving both bulls and bears searching for confirmation. Last week’s research laid out the heart of the dilemma—headline negativity is seeping into expectations, yet actual earnings momentum and breadth signals keep arguing for resilience. Tariffs, immigration policy, and political theater dominate the front page, but underneath, a more nuanced story unfolds: wage gains, healthy card spending, and even battered retailers posting upside surprises.
This morning’s Producer Price Index delivered a surprise to the downside—headline PPI fell by 0.1% in August (vs. expectations of a +0.3% increase), with the sharpest drop in services costs the primary driver. That marks an abrupt reversal from July’s hot +0.7% reading and underlines the challenge forecasters face in a data environment shaped by policy volatility: today’s “cool” print comes on the heels of a notable spike, and one negative month is the antithesis of a trend.
For market watchers and policymakers alike, this volatility highlights just how hard it is to anchor inflation expectations or reliably anticipate the path of prices in the months ahead. If tariffs remain in place and endogenous, policy-driven frictions persist, reflation pressures are more likely to return—and may well compound into late Q4. Analysts should resist the temptation to declare victory (or signal a reversal) based on any one print, especially given how dramatically the data has whipsawed in recent quarters. MONETARY POLICY DOES NOT/CANNOT OVERPOWER FISCAL POLICY… wasted bullets they say?
The greatest decline in LFPR reinforces the power of fiscal policy, which rate cuts can’t overcome.
“How does lowering rates fix LFPR, Waller?”
This is where dissenting proves political as well!
For the bond market and the Fed, the messaging may soon need to shift. The market is debating “less cuts” in the context of these numbers, but the real question is why the Fed might opt for a lighter easing cycle—what’s driving the cuts: persistent economic weakness, sticky inflation, or both? Context, not just the headline, will set the tone going forward.
This “growth scare,” as we framed it, is not recession—at least not yet. 2025’s technical bear market and the spring’s sharp recovery have created a backdrop where negative economic surprises and strong corporate guidance coexist. Our deep dive reminds: opportunity cost is the only guaranteed loss for those who sell in fear and buy too late. Buy and hold, patience, and smart, incremental exposure remain undefeated strategies.
This month, we track a market batting through multiple technical extremes:
– The S&P 500 clocked its 20th all-time high in 2025—a feat that, by precedent, all but guarantees at least two more before year-end. (22 ATHs as of September 8th 💰✅)
– The index has spent almost 90 days without tagging its 50-day. Such streaks rarely break gently—and a 3–5% pullback in September would match quant expectations and historical tape-action, not a bear market beginning.
– Small- and mid-caps had their moment, but leadership is still firmly in large-cap hands; quant and options data suggest “buy the dip” should remain the mindset—especially with breadth thrusts, NYSE A/D high confirmations, and strong QQQ quants in the background.
Jobs growth is undeniably soft, but layoffs remain muted and consumer spending, for now, is healthy. The labor market is arguably in balance, but fraying at the margins—meaning volatility (including in the VIX) can return in bursts, especially around inflation prints and September’s FOMC. For those worried about presidential cycles, seasonals, or the specter of “Worst Week” in September, our quant signals (and Wayne Whaley’s work) say flexibility is key and panic is the enemy of compounding.
In short:
– If the “soft patch” deepens, be a buyer of broad weakness. If the market simply consolidates, allocate methodically. If new highs come faster than expected, keep trailing up stops and don’t chase.
– The macro backdrop is noisy, but the price action is the signal. As always, we’ll let the data, technicals, and a disciplined game plan do the talking.
Stay focused on process over prediction and keep recency bias in check. In this cycle, comfort is a cost—and discomfort, when managed rationally, is where outperformance is found.
Cut through the noise, avoid the herd, and get ready for another wild week in Market Mania.
Chart(s) of the Week
🏆 Today’s Chart of the Week was shared by Seth Golden (@SethCL):
TLMustR
Nick Maggiulli wrote a great piece recently, denoting his bearish tilt toward the current market regime and at least until proven errant. His key rationale for tilting bearish for the 1st time in forever (fact), is a valuation concern reminiscent of the Dotcom/2021 era.… pic.twitter.com/5PRkqZN8I5
— Seth Golden (@SethCL) September 3, 2025
Today’s must-see chart comes from Seth Golden & Nick Maggiulli (@SethCL & @DollarsAndData), Seth’s additions challenge some of the street’s most stubborn narrative tics—and offer a practical reframing in how to interpret charts like the S&P 500 Price-to-Sales ratio.
Myth 1: “High P/S Means Bubble—Always!”
A reflexive fear whenever P/S climbs: “We must be in a bubble like Dotcom or 2021!” But Seth spotlights how this ignores the construction of the ratio. Price-to-Sales is not static—it is a function of both the price *and* the sales line. In 1999–2000, soaring prices (numerator) on flat-to-mildly rising sales (denominator) created the classic “bubble” signal. But today, the denominator—S&P 500 sales—is growing at a secularly higher, more stable clip.
Myth 2: “Mean Reversion is Destiny”
Seth’s commentary pokes at the notion that valuation ratios must always revert to post-war averages. This ignores both structural changes in index composition and the power of secular sector trends. In the 2020s cycle, information technology—and asset-light, high-margin giants—drive a growing share of index profits and sales. As with forward P/E multiple expansion since 2020, today’s P/S ratio is less an “accident waiting to happen” and more a marker of regime change.
Myth 3: “Valuation Metrics Work the Same Across All Cycles”
Markets are forward-discounting machines, but as Seth notes, “the numerator is almost always the greatest contribution to performance in bubbles.” Today’s elevated P/S comes with healthy denominator growth (sales) to backstop it. It isn’t the same as the Dotcom period, when revenues lagged and prices ran. If anything, vigorous sales growth across AI, cloud, and digital services is a vital technical support, not a cause for immediate concern.
Myth 4: “It’s Only About Valuation—Not Macro”
Seth’s take is that valuations are regime-dependent. Put another way, multiples can float higher as long as structural tailwinds—like tech’s profit share, capital efficiency, and global adoption—keep fueling top line and margin expansion. Static charts flatten nuance: they “feel” scary, but they fail to isolate what’s different between cycles. In fact, bubbles aren’t inevitable just because a metric hits a prior level.
Takeaway:
Valuation “danger levels” are not fixed mileposts. They’re ecosystem variables—dependent on the structure of corporate profits, the capacity for sales growth, and the long-run effects of new business regimes. Seth’s message to investors: Avoid lazy analogies, look deeper at the driver under the hood, and don’t mistake regime change for a repeat of past excess. The only constant is change—and in today’s market, both the numerator and denominator matter far more than the mythmakers admit.
BONUS:
Markets initially priced 7 cuts for 2024. Fed delivered 3 rate cuts. S&P 500 rose +24%, despite fewer cuts than estimated.
How many times Fed cuts rates is ALWAYS the wrong consideration. What matters is the economy. Why the Fed cuts fewer times is what markets vote on!$SPX…
— Seth Golden (@SethCL) January 5, 2025
Divergences… NOT timing tools!
Just a heads-up
The 8 Bellwether Composite A/D Line is doing something different than the S&P 500 price.
Last time it did this in late 2024 to early 2025…$SPX $SPY $QQQ $NYA $DJT $BTC $IWM $DIA
h/t @LeutholdGroup pic.twitter.com/fhKn8wVCI5— Seth Golden (@SethCL) September 10, 2025
You still crying? We’re still buying!
Always be in stocks and/or sectors with ever-decreasing supply and ever-increasing demand
Always be🍎 iSmart$SPX $SOXX $XLK $AAPL $SPY $SMH $MSFT https://t.co/ubzxUg3URU pic.twitter.com/SCaiw6kKI5
— Seth Golden (@SethCL) August 12, 2025
Quote(s) of The Week
You see this is one of the reasons why finance is a lot more challenging than physics. In physics, if you try to drop a ball at a gravitational field, it won’t change its mind and say, “Gee!”, but in financial markets, the moment you try to take advantage of this pattern, the pattern changes.” In fact, the more you try to take advantage of it, the more quickly the pattern changes. In fact, if you do this a lot, if there are a lot of people trying to predict patterns, then you know what you get? You get no pattern. You get randomness. That’s the idea behind an efficient market being random. If it were not random, then that means that there aren’t enough people who are bothering to try to forecast the price and
incorporate information into the price. The market is highly competitive. It’s hard to make money in those markets.– MIT’s Andrew Lo
Why social and financial media are so destructive, beyond the willingness of the individual to absorb, blindly.
The assertions are assertions only, and throughout the clip no evidence offered to support the assertions. It is because he says it is. I assert so it must be so. https://t.co/LIpKL2ZPZm
— Seth Golden (@SethCL) September 3, 2025
Via @SethCL at https://t.co/9XUe4kSeKK:
“In the face of pressure to lower rates, they’re going to lower rates.
They are.
Again, the rapidity doesn’t seem harmful. This is, unfortunately, political pressure that has the potential to cause trouble. https://t.co/olAVPF3RXS
— Finom Group AYNI Luis Solórzano (@aynirealtor) August 14, 2025
Peter Lynch 1994: Only forecast investors need!~
"… Basic corporate profits have grown about 8%/year historically. So, corporate profits DOUBLE about every 9 years. The stock market ought to DOUBLE about every 9 years too."$SPX $SPY $QQQ $NDX $IWMhttps://t.co/wUjLb6qST7
— Seth Golden (@SethCL) September 9, 2025
Investing quote of the day: pic.twitter.com/TAytuB8ake
— Meb Faber (@MebFaber) August 28, 2025
Top 10 Tweets of The Week
Remember when I said a few weeks ago CPI > PPI? Why was PPI released first this week if you don’t mind I ask? Pure coincidence?
August CPI out this Thursday.
Two of the biggest surprise upside contributors last month – medical care + transportation services – had the largest positive July seasonal adjustment ever.
Watch for reversal of both…Cooler CPI would fuel 50-bp cut odds and push yields lower. pic.twitter.com/dqEqrU0SGC
— Warren Pies (@WarrenPies) September 8, 2025
This tweet keeps flying right over your head, maybe you should ask yourself why/what it might be that your bias is still blinding 🙈 you from seeing 👁️ ? (5618)
My theme coming into 2025 was that prior "Soft Landing" achievements (chart) found $SPX gaining at least 100% over rolling 36months.
At Year-end 2025 Fed will achieve "NO-Landing".
White House administration is threatening to fire Fed chairman and Fed governor/s.Perspective!… pic.twitter.com/1Q8pRa0KIM
— Seth Golden (@SethCL) September 5, 2025
Still trying to predict a recession huh? EVENTUALYSIS… and another nice/scary 😱 indicator that affirms your ‘still sitting heavy cash on the sidelines waiting for -20% or greater CONFIRMED BEAR MARKET’ bias! Is that how investing is done?, assuming millions of investors are wrong? Maybe you can be the next Warren Buffett too?
These guys (Tim $AAPL Cook included) must have a really good crystal ball 🔮, not cash management disciplines? Im sure better grammar than me, pardon my french…thats for sure!
Updating my recession watch chart.
Note that you want to weight these measures according to their signal-to-noise ratio. The smoother lines are more signal, less noise, and they're suggesting the economy has slowed pretty sharply. pic.twitter.com/5uNYaJ0siv
— Justin Wolfers (@JustinWolfers) September 5, 2025
Eh??? Uh-ohhhh… who’s gonna tell him?
Not all recessions are created equal!
No recession, eh? pic.twitter.com/HNRsjQRspd
— David Rosenberg (@EconguyRosie) August 29, 2025
The BLS did its best to paint lipstick on this pig of a payroll report because the Birth-Death model managed to add 96,000 jobs to the headline. Strip that out, and what the actual survey showed was a 74,000 decline. In fact, payrolls have declined on an ex-BD basis now in each…
— David Rosenberg (@EconguyRosie) September 5, 2025
Schrödingers market, DYOR… Failed bearish breakdowns or bullish confirmations?
(In markets, there IS right and wrong…)
$SPX, $SPY During the 2023-2024 rally, the 1st pullback greater than 5% happened at the 5-month mark in late March’24.
📈The SPX was up nearly 30% by then.
👇See next post… pic.twitter.com/8GRB8ASm3K
— Frank Cappelleri (@FrankCappelleri) September 4, 2025
$SPX $SPY Bears had a chance to turn the early August set up into a major top.
Another chance has surfaced again.
Potential bearish formations that don't play out are just continuation patterns within an uptrend. pic.twitter.com/9TFG9rAJW9
— Frank Cappelleri (@FrankCappelleri) September 2, 2025
Did you forget about the Dual ZBT/DeGraaf Thrusts in Q225 already? These are NOT short term quantitative indicators, but more-so medium-longer term, regardless of what you hear out there… 😉 💯
Anotha one! WHY WE QUANT… (absent endogeny/exogeny) 🚀
🔥 $SPX has ripped +28% in 100 trading days, the 11th such streak since 1929!
History shows mixed short-term returns after these runs, but 8/10 prior cases saw double-digit gains over 12M (average/median +14.58%). h/t @schaeffers https://t.co/apqduWKvA2 pic.twitter.com/FuRRKqjSAF
— Finom Group AYNI Luis Solórzano (@aynirealtor) September 4, 2025
My opinion: Buying gold is basically saying “I think things are so screwed I’d rather own a rock than anything else”
I just can’t do it, its such a pessimist asset. You’re a pessimist on the US balance sheet. Im not.
– Michael Antonelli
The fearful fuel underlying the gold rally is finally starting to fade and the price of gold is increasingly at risk. See the chart below and click the link for my latest report "Golden Risk" at https://t.co/cmZvbGqspf pic.twitter.com/INMpiav9mV
— Jim Paulsen (@jimwpaulsen) September 4, 2025
Bears turning bullish…😅
What if I told you the consequences of Zerohedge turning bullish are not what you may think…?
The bull market has legs that could power the S&P 500 to a peak of 9,914 in September 2027, says Bank of America. https://t.co/Rn9qBSDJrJ
— Axios (@axios) September 2, 2025
One of the last bear's on Wall Street has flipped. Evercore's Julian Emanuel raised his year 2025 year end price target to 6,250 from 5,600. He sees 7,750 for SPX by the end of 2026 with an upside bull case for 9,000 amid a "AI-driven asset bubble." pic.twitter.com/vGlQ5aEVk4
— Josh Schafer (@_JoshSchafer) September 1, 2025
📈"We are bullish equities. We target 6650 by year-end 2025 and 7200 by year-end 2026 (21.5x fwd P/E)…" – Wells Fargo's Ohsung Kwon https://t.co/dteJ3QhCXg
— Sam Ro 📈 (@SamRo) September 9, 2025
PERMABULLS ARE PERMARIGHT. PERIOD.
No such thing as a lost decade for an active/DCA investor…
How likely is a mkt correction from all-time highs? Chart below shows how often $SPX has corrected greater than -10% over various periods of time, following each of the ~1,270+ all-time highs since 1950.
In other words, SPX rarely retests former lows or anything close to it… pic.twitter.com/CYLC22LAnW
— Seth Golden (@SethCL) September 2, 2025
As a permabear, you are truly awaiting "1 shining☀️ moment."
The average duration of a bear mkt is 446 days
The average duration of a bull mkt is 2,069 days.Average bear market return = -38.4%
Average bull market return = +209%I'll choose bull, and endure any bear market😍… pic.twitter.com/5kL7M9FjxL
— Seth Golden (@SethCL) October 20, 2024
Please read below extended thread from Seth at your own disclosure. And recall the willingness clause while you do so if youre a finomgroup member, you should remember this term from April 2025.
Hope this Helps:
I sold in abundance and into the premarket Futures advance, outstanding trading positions and/or overweights. While the employment data continues to soften the totality of the employment data still speaks to a labor market in balance but having rebalanced to…
— Seth Golden (@SethCL) September 5, 2025
I know I’ve said this about 5 times by now, but I don’t mind saying it 39 more. THERE IS NO SUCH THING AS A SELL SIGNAL – The real gains lay in those who are able to compound throughout drawdowns and stay invested, since volatility tends to cluster – ONLY BTFD indicators. (Buy the freaking dip! – indicators, for my boomer folks).
The magnitude of the drawdown is anyone’s, GUESS… 🙈 👇 aka informed, but NOT fearful opinion?
I don't claim to know if $SPX will buck scheduled fund flows or seasonality. So far, it has adhered to such flows/seasonality.
September 2024 started with an immediate ~5% pullback, but finished month up ~2%.
September 2025?$SPY $QQQ $NYA $IWM $ES_F $VIX $SMH $AAPL pic.twitter.com/Ww9pIUKoxy
— Seth Golden (@SethCL) August 17, 2025
Jeremy Siegel: "This is the biggest policy mistake in 95 years."
We’ve done this mass tariff thing 3 times:
1828, 1930, 2025All spaced about 100 years apart because everyone who remembers the last one needs to be dead for the next one to happen @stacycay $SPX $ES_F $SPY $QQQ…
— Seth Golden (@SethCL) April 4, 2025
📢Only 1 thing is guaranteed: Indices travel higher over time. Be part of that process.
📢When discount offered, take advantage, regardless of next week, month or quarter.
📢Inbetween drawdowns & profits is education.
📢Volatility is the price of admission.
Sure, a $1,000 investment in Apple's IPO would be worth around $1.8 million today.
But do you really understand the brain damage you had to endure to get here?
Eight drops of 50% or more in the stock price, with seven of them happening between 1980 and 2000. pic.twitter.com/MWbVitYkd7
— Callie Cox (@callieabost) January 19, 2025
But tell me more about how this is just like the 1970-1980s regime…and 1929… 1998… and 2001… and 2009… and 2018, 2020, 2022, 2025. Shall i continue?
EACH TIME IS DIFFERENT, the only constant is human behavior… we never learn or do we?!
In Aug, the #SP500 reached 5 new all-time highs, totaling 20 for the yr, while the S&P/TSX led w/32 new highs. Historically, when the S&P 500 hits 20+ highs by Aug, it avgs a 5.5% gain in the final 4mos, with a positive frequency of 89%, except for notable reversals in 1986-87.
— Sam Stovall (@StovallCFRA) September 3, 2025
Most underrated chart in history of economics ‼️
— Seth Golden (@SethCL) September 9, 2025
Household assets are nearly 10X greater than liabilities. #economy #consumer #debt #GDP pic.twitter.com/Bz7QeguXFt
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You’re all caught up now. Thanks for reading!
If you have any questions, feel free to message Seth Golden or contact us support@finomgroup.com
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