Fundstrat
Fundstrat’s Mark Newton Gives a Market Update After ADP Miss and Government Shutdown
10/1/2025, 6:43:22 PM
Economic Summary
- ADP's negative payroll report, including a sizable downward revision, points to labor-market softness; that weakness pushed long-term yields sharply lower and signals increased odds of Fed easing, affecting risk asset allocations (ADP).
- Long-term yields appear headed to test or break September lows, potentially completing the decline that began in May; if yields bottom in mid-to-late October and turn higher in November, the macro regime could shift, prompting rotation across sectors.
- Market pricing now shows roughly a 95% chance of a rate cut by end of October; given this year's strong correlation between lower yields and equity gains, the short-term impulse for stocks is likely positive.
Bullish
- Falling long-term yields and a higher chance of Fed cuts are bullish for equities.
- Market-implied 95% probability of an October rate cut supports rate-sensitive stocks.
Bearish
- ADP's negative payroll report and downward revision signal a weakening labor market.
- Economic downdraft increases recession risk and could raise market volatility.
Bearish tickers
ADP
ADP
Bullish
Weaker ADP data pushed yields lower and increased Fed-cut odds, which is supportive for equities in the near term.
Bearish
Negative ADP payroll print and downward revision indicate economic softening, raising recession concerns and pressure on cyclical equities.
People mentioned
Mark Newton