JD Durkin: Let’s bring in a good friend of the show and a good friend of mine as well. Tim Anderson, Managing Director at TJM Investments. My man, happy Q4. We made it.
Tim Anderson: We made it. First day of Q4. And even though the market’s actually gained to the upside, we were much lower at mid-morning, 10:30, 11:00, in the face of higher oil prices. So I think that overall, this is a very constructive day for stocks on day one of Q4.
JD Durkin: Yeah. Tell me about some of the top catalysts or things you saw on the tape today. Obviously, we came into today with a few days of selling, and we ended up being negative for the month of September. We’re off to a pretty nice start here.
Tim Anderson: Yeah. And I think that really the economic backdrop, not just today but over the last few days, has been very, very positive for stocks.
We got an upside revision to Q2 GDP, the third, or they’ll call it the final revision. It’ll be revised again later. But it’s from plus 1.5% to plus 2.2%. That’s a 50% hike if you do the math.
And I think that we’re very likely looking at a GDP report with a three-handle in it for the third quarter. We also got a very strong ISM manufacturing report that has been very encouraging for the economy the last two or three months.
We got very strong consumer spending, up 3.9%, better than expected and near its highest level of the year. And clearly, going into the Christmas holiday season, consumer spending is going to be something investors will look at very closely.
JD Durkin: And jobs tomorrow.
Tim Anderson: Yeah.
JD Durkin: Of course, it’s a lot of indications of growth here. You and I were talking before the show. The Atlanta Fed number right now for Q3 puts that number, like, north of 3.7%, right? So growth, manufacturing PMI came in north of 50. That suggests manufacturing-sector expansion. That’s all well and good.
But what happened to the number yesterday was a very tame number on inflation. The Fed’s favorite inflation metric, core, came in at 3.0 versus the prior reading of 3.4, and much lower than expectations at 3.3.
Tim Anderson: So despite the fact that oil is up above 100, and even though that core number is ex-food and energy, oil prices have an impact on a lot of other components that are core components.
So that number coming down from 3.4 to 3.0, I think, will really help the Fed pass on hiking rates in October, with December to be a jump ball based on what numbers we get between now and then.
JD Durkin: Yeah. What do you make—I mean, we do have some shops on Wall Street that are saying, hey, maybe one more interest-rate hike this year. And then when you turn to 2027, maybe a few more. Short-term interest rates, we know the Fed is more responsible for the short end of the yield curve.
Tim Anderson: And look, we didn’t come into 2026 expecting no interest-rate hikes. It tells us that the market can handle it. But I think it’s going to end up becoming unnecessary, and maybe even viewed as such, as inflation is already going in the right direction.
We’re clearly not at their target, but we’re moving in that direction, and they are not going to want to throw any serious roadblocks in the face of the economy.
JD Durkin: All right. Any predictions for the jobs print tomorrow? We’re looking at about 80,000 top line, unemployment to hold at 4.1%. Sometimes the numbers are way off from what we expect.
Tim Anderson: They have been a little hard to predict the last six months, but I’m guessing that the consensus—it’s going to be right around consensus.
We had weekly jobless claims numbers today that were pretty much right on the screws. So I think that if we do come in near consensus, the narrative later in the day will be that that’s almost a Goldilocks number for both the upcoming inflation reports and for the economy.
JD Durkin: We love Goldilocks figures. Not too hot, not too cold, right? In between. That’s how we do things here.
Tim Anderson, Managing Director at TJM Investments. Thank you for joining us today.
Tim Anderson: Always a pleasure.
JD Durkin: We’ll talk to you again soon.
