This Week's Schedule

Date	Day	Indicator	Time	Importance	Event
8/31	Monday	International Conference	―	★★★☆☆	G20 Finance Ministers & Central Bank Governors Conference
9/1	Tuesday	Economic Indicator	23:00	★★★☆☆	U.S. JOLTS Job Openings
		Economic Indicator	23:00	★★★★☆	U.S. ISM Manufacturing PMI
		Key Speeches	―	★★★☆☆	FRB Governor Barr Speech
9/2	Wednesday	Economic Indicator	―	★★★☆☆	U.S. ADP Employment Report
9/3	Thursday	Economic Indicator	21:30	★★☆☆☆	U.S. Productivity & Unit Labor Costs (Revised)
		Economic Indicator	23:00	★★★★☆	U.S. ISM Non-Manufacturing PMI
		Key Speeches	―	★★★☆☆	FRB Waller Speech
9/4	Friday	Economic Indicator	21:30	★★★★★	U.S. August Employment Situation

Next Monday is Labor Day, marking the true end of the summer lull. This week is the first employment week of the month. The market-wide movements have not changed recently, and positioning around themes is not aligned, with reactions and expectations continuing to diverge as seen. Currently, inflation fears linger while the economy remains strong, and employment liquidity remains low, leaving data that are neither clearly strong nor weak. Looking back at August employment data shows a gain of 23,000 jobs with an unemployment rate of 4.1%, and a drop in labor force participation, suggesting fewer people seeking employment; however, August data overlaps with summer vacations, so data collection is sometimes incomplete, and revisions are likely in upcoming releases. Fundamentally, I expect upward revisions, but the range remains neither strong nor weak, landing around roughly 50,000 in the annual average excluding August's peculiarities.

ISM Manufacturing and Non-Manufacturing PMIs are unlikely to show data capable of changing the trend. For a while, these indicators have moved away from signaling a trend, indicating market focus is elsewhere. It's not that the economy is uninteresting, but data showing solid, neutral momentum with no shift in perception of employment liquidity would not alter the slope.

Overall, the current view is that the importance of the month begins is fading. While event names remain strong indicators, we are not in an environment to build positions toward indicators; a more cautious approach is desirable. Market themes focus on inflation, then assessing AI overinvestment, and more broadly recognizing that excess investment contributes to living costs and has become a central theme in midterm elections.

Given the lack of momentum in price movements, today I want to delve a bit deeper as September begins.

Current Value of the Midterm Elections

Since Trump took office in 2024, public interest has been consistent, and it is not about Iran or AI per se. It returns to the fundamental question: “Will our lives improve?” Inflation is part of this as well, and the concerns over Iran, AI all circle back to this core question.

The midterm elections are like a report card on the president's performance after taking office, similar to a first-term report. In two years, the outcome of the presidential election will determine whether there is a repeat or a change. Trump also has a youthful, almost student-like mindset, which adds a humorous touch.

Subjects include life costs and inflation, tariffs, immigration, energy, foreign policy including war, employment, government reform, and AI.

Preparation for the midterm elections

This Week's Schedule