Good Morning,

 

Yesterday we covered the very strong ISM Manufacturing report from September (hurricanes and all).  And if that did not make your day, well yesterday’s ISM report on the Non-Manufacturing (Service) sector was yet another very big beat,

 

Economists and analysts thought we would come in at a reading of 55.5 (the August read was 55.3).  Well, that too was just a bit outside.  The actual reading came in at a stout 59.8.

 

Here is the important thing though:  This is the highest level for the index since August 2005!  It also clocked in as the fourth-largest one-month increase in the history of the survey going back to 1997!

 

Bottom line:  when you combine the two ISM readings, the September ISM came in at 59.8, which was the highest reading since August 2005.

No-flation

 

The Fed officials continue to struggle with the lack of inflation.  After all, QE was supposed to cause the mother of all inflation firestorms.  The gold-bugs “knew” it – so how could they have been wrong?

 

Finally, I saw something in the headlines that led me to believe there is a tiny – and I do mean like microscopic tiny – chance they are beginning to understand this is a structural change driven by the slow-moving but long-lasting demographic powers afoot:

My hunch?  I suspect the Ms. Yellen may use a low read tomorrow on jobs to suggest that we can “wait” for the next rate hike just a tad bit longer.  But, heck, it’s just a hunch.

 

Holidays Are Almost Here

 

Before you know it, we will be mixing headlines about Q3 earnings beats into expectations on the all-too-analyzed Holiday Shopping Season.  The first numbers are out and the growth is expected to be solid.  They are likely pushed higher by growing wages and a solid employment base with plenty of jobs open for those looking for one:

The point?  Don’t be swayed by all the bad news – there is plenty of good stuff happening.

 

You Have Got to Be Kidding!

 

Under the “This is absolutely crazy” column, I bring your attention to Ireland.  Yes, Ireland.  I know March is a ways off in the distance still but get this:

 

After being basically broke just a short 8 years ago, the country just got paid to sell bonds.  Their latest bond offering was bought at a negative yield!

 

And you thought investors were too bullish about stocks??

 

Not even close.

Something to Ponder….

 

I close with a thought.  What is some investment management firm told you that “the only investments they buy for clients are the ones that sell for 43 times earnings – because they are safe.”

 

What would you think?  Nutty right?

 

That’s what buyers of bonds in the US are doing right now as they line up each week setting records for bids…43 times earnings – guaranteed:

In Summary

 

The next earnings flood is headed our way.  Do not overlook the impact of the latest manufacturing data as noted above.  It will get lost in the mess – but you won’t let that happen.

 

Let’s keep praying for a correction – even a mild one.  It would only take a week or two before there would be no one feeling bullish, and the world would keep on ticking.

 

Demographics Rule The Long-Term Game

 

Planning is critical as always.

 

But we must stay focused on the right pitch and be confident that is remains very early in the game.

 

Long-term currents win over time – not short-term, emotional waves.

 

I will use that line again from our videos:

 

Think Demographics, Not Economics.  We are in great shape!

 

Until we see you again – may your journey be grand and your legacy significant.