Thu, October 2, 2025 | 7:50AM ET

History shows probabilities favor S&P 500 7,000 by YE25 given YTD gains. Gov't shutdown = no jobs report Friday but weak ADP = "dovish" Fed

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The government shutdown started at Wed 12:01am ET and this means that we will not be getting data from BLS or any agency until the shutdown is over. But we think this is a “sidebar” issue and probabilities heavily favor stocks strong from Oct to Dec this year — in fact, we see S&P 500 reaching at least 7,000 by year-end and maybe higher.

The government shutdown lasted 35 days in Dec 2018 and this would be a long stretch. In fact, it would be so long, the Fed would not have any new data for its Oct FOMC rate decision (10/29) and most likely would have to rely on the August jobs report (weak) and then ADP yesterday. This would be dovish, because the Fed would have to act with caution.
After all, the economy suffers from a shutdown, from lost activity, so this would be a reason for the Fed to lean dovish on its next rate decision. The ADP report was soft and what was notable, in our view, is the drop in “job changer” median pay. It fell month over month and the yoy pace is settling in at 6.6%, so this hardly paints a picture of a strong jobs market.
I would not lean “bearish” because of shutdowns. As we highlighted earlier this week, shutdowns have rarely created lasting impacts on equities. So if stocks are down, we would be dip buyers. This is something to be mindful of, as we may hear of dire warnings of calamity because of the shutdown.
But more importantly, we are entering the strong seasonal period (4Q) and this means stocks higher.
– since 1950, Oct to Dec median gain +4.9% (n=75)
– this implies S&P 500 7,050
– win-ratio 81%
– Fed cut in Sep, like 1998 and 2024
– avg gain 1998/2024 +13.8%
– implies S&P 500 7,750
You get the picture. There is a strong seasonal tailwind underway and the upside is higher given the Fed is dovish. That is what we think also makes sense, given the continued skepticism around equities.
So, we would urge looking through the messiness of the shutdown, and even the lack of data. If stocks are particularly weak, I would use this to “buy the dip.” And the same strategy holds for sectors (see below). I would not advise going “defensive” — except, owning Gold and Bitcoin make sense.
By the way, this week is a heavy week of data. Look at the key things on the slate. It is a lot. We have important Jobs data releases including JOLTS on Tuesday:
– 9/29 Mon 10:30 AM ET: Sep Dallas Fed Manuf. Activity Survey -8.7
– 9/30 Tue 9:00 AM ET: Jul S&P CS home price 20-City MoM -0.07% vs -0.20%e
– 9/30 Tue 10:00 AM ET: Sep Conference Board Consumer Confidence 94 vs 96e
– 9/30 Tue 10:00 AM ET: Aug JOLTS Job Openings 7227k vs 7200ke
– 10/1 Wed 12:01 AM ET: US Government Shutdown Deadline
– 10/1 Wed 9:45 AM ET: Sep F S&P Global Manufacturing PMI 52.0 vs 52.0e
– 10/1 Wed 10:00 AM ET: Sep ISM Manufacturing PMI 49.1 vs 49.0e
– 10/2 Thu 10:00 AM ET: Aug F Durable Goods Orders MoM 2.9%e
– 10/3 Fri 8:30 AM ET: Sep Non-farm Payrolls 51ke Delayed due to Shutdown
– 10/3 Fri 9:45 AM ET: Sep F S&P Global Services PMI 53.9e
– 10/3 Fri 10:00 AM ET: Sep ISM Services PMI 51.8e

BOTTOM LINE: Still “most hated rally”

This still remains the “most hated” V-shaped stock rally. As for what we would buy

MAG7 & Bitcoin & Ethereum
Industrials
Financials: Large-cap and regional banks
Small-caps

History shows probabilities favor S&P 500 7,000 by YE25 given YTD gains. Gov't shutdown = no jobs report Friday but weak ADP = dovish Fed

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Key Incoming Data October:

~~10/1 9:45 AM ET: Sep F S&P Global Manufacturing PMI~~ Tame
~~10/1 10:00 AM ET: Sep ISM Manufacturing PMI~~ Tame
10/2 10:00 AM ET: Aug F Durable Goods Orders MoM
10/3 8:30 AM ET: Sep Non-farm Payrolls
10/3 9:45 AM ET: Sep F S&P Global Services PMI
10/3 10:00 AM ET: Sep ISM Services PMI
10/7 8:30 AM ET: Aug Trade Balance
10/7 9:00 AM ET: Sep F Manheim Used Vehicle Index
10/7 11:00 AM ET: Sep NYFed 1yr Inf Exp
10/8 2:00 PM ET: Sep FOMC Meeting Minutes
10/10 10:00 AM ET: Oct P U. Mich. 1yr Inf Exp
10/14 6:00 AM ET: Sep Small Business Optimism Survey
10/15 8:30 AM ET: Sep Core CPI MoM
10/15 8:30 AM ET: Oct Empire Manufacturing Survey
10/15 2:00 PM ET: Fed Releases Beige Book
10/16 8:30 AM ET: Oct Philly Fed Business Outlook
10/16 8:30 AM ET: Sep Core PPI MoM
10/16 8:30 AM ET: Sep Retail Sales
10/16 10:00 AM ET: Oct NAHB Housing Market Index
10/17 9:00 AM ET: Oct M Manheim Used Vehicle Index
10/17 4:00 PM ET: Aug Net TIC Flows
10/23 8:30 AM ET: Sep Chicago Fed Nat Activity Index
10/23 10:00 AM ET: Sep Existing Home Sales
10/23 11:00 AM ET: Oct Kansas City Fed Manufacturing Survey
10/24 9:45 AM ET: Oct P S&P Global Services PMI
10/24 9:45 AM ET: Oct P S&P Global Manufacturing PMI
10/24 10:00 AM ET: Oct F U. Mich. 1yr Inf Exp
10/24 10:00 AM ET: Sep New Home Sales
10/27 8:30 AM ET: Sep P Durable Goods Orders MoM
10/27 10:30 AM ET: Oct Dallas Fed Manuf. Activity Survey
10/28 9:00 AM ET: Aug S&P CS home price 20-City MoM
10/28 10:00 AM ET: Oct Conference Board Consumer Confidence
10/28 10:00 AM ET: Oct Richmond Fed Manufacturing Survey
10/29 2:00 PM ET: Oct FOMC Decision
10/30 8:30 AM ET: 3Q A GDP QoQ
10/31 8:30 AM ET: 3Q ECI QoQ
10/31 8:30 AM ET: Sep Core PCE MoM

Key Incoming Data September:

~~9/2 9:45 AM ET: Aug F S&P Global Manufacturing PMI~~ Tame
~~9/2 10:00 AM ET: Aug ISM Manufacturing PMI~~ Tame
~~9/3 10:00 AM ET: Jul F Durable Goods Orders~~ Tame
~~9/3 10:00 AM ET: Jul JOLTS Job Openings~~ Tame
~~9/3 2:00 PM ET: Sep Fed Releases Beige Book~~ Tame
~~9/4 8:30 AM ET: Jul Trade Balance~~ Tame
~~9/4 8:30 AM ET: 2Q F Unit Labor Costs~~ Tame
~~9/4 8:30 AM ET: 2Q F Non-Farm Productivity~~ Tame
~~9/4 9:45 AM ET: Aug F S&P Global Services PMI~~ Tame
~~9/4 10:00 AM ET: Aug ISM Services PMI~~ Tame
~~9/5 8:30 AM ET: Aug Non-Farm Payrolls~~ Tame
~~9/8 9:00 AM ET: Aug F Manheim Used Vehicle Index~~ Tame
~~9/8 11:00 AM ET: Aug NY Fed 1yr Inf Exp~~ Tame
~~9/9 6:00 AM ET: Aug Small Business Optimism Survey~~ Tame
~~9/10 8:30 AM ET: Aug Core PPI~~ Tame
~~9/11 8:30 AM ET: Aug Core CPI~~ Mixed
~~9/12 10:00 AM ET: Sep P U. Mich. Sentiment and Inflation Expectation~~ Tame
~~9/15 8:30 AM ET: Sep Empire Manufacturing Survey~~ Tame
~~9/16 8:30 AM ET: Aug Retail Sales Data~~ Tame
~~9/16 10:00 AM ET: Sep NAHB Housing Market Index~~ Tame
~~9/17 9:00 AM ET: Sep M Manheim Used Vehicle Index~~ Tame
~~9/17 2:00 PM ET: Sep FOMC Decision~~ Dovish
~~9/18 8:30 AM ET: Sep Philly Fed Business Outlook~~ Tame
~~9/18 4:00 PM ET: Jul Net TIC Flows~~ Tame
~~9/22 8:30 AM ET: Aug Chicago Fed Nat Activity Index~~ Tame
~~9/23 9:45 AM ET: Sep P S&P Global Services PMI~~ Tame
~~9/23 9:45 AM ET: Sep P S&P Global Manufacturing PMI~~ Tame
~~9/23 10:00 AM ET: Sep Richmond Fed Manufacturing Survey~~ Tame
~~9/24 10:00 AM ET: Aug New Home Sales~~ Tame
~~9/25 8:30 AM ET: Aug P Durable Goods Orders~~ Tame
~~9/25 8:30 AM ET: 2Q T GDP~~ Mixed
~~9/25 10:00 AM ET: Aug Existing Home Sales~~ Tame
~~9/25 11:00 AM ET: Sep Kansas City Fed Manufacturing Survey~~ Tame
~~9/26 8:30 AM ET: Aug Core PCE Deflator~~ Tame
~~9/26 10:00 AM ET: Sep F U. Mich. Sentiment and Inflation Expectation~~ Tame
~~9/29 10:30 AM ET: Sep Dallas Fed Manuf. Activity Survey~~ Tame
~~9/30 10:00 AM ET: Sep Conference Board Consumer Confidence~~ Tame
~~9/30 10:00 AM ET: Aug JOLTS Job Openings~~ Tame

Economic Data Performance Tracker 2025:

Economic Data Performance Tracker 2024:

Economic Data Performance Tracker 2023:

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