Earnings season continues as about a quarter of S&P 500 companies will report Q3 financials this week; we’ll keep it light on charts today as we wait on pins and needles. S&P readings haven’t broken out (one way or the other) more than ~300 points since early spring—could any surprise readings this week push the index outside of that established range?

U.S. retail sales dropped unexpectedly in September for the first time in seven months in what many analysts consider an early sign that the global manufacturing slowdown and trade war anxiety are finally starting to weigh on consumers (re: the driving force behind ~70% of the U.S. economy).

Earnings season kicked off in bullish style yesterday—with nine of the 11 reporting S&P companies either meeting or exceeding expectations—and sparked a market rally. While this eased many’s anxieties over market impact of the trade war, our optimism is more cautious as we remember how late-year estimates are often anchored low, and observe that much of the rally is attributable to only a few linchpin companies.

Happy Monday Fireside Charts readers! Today may be a holiday, but that doesn’t mean it’ll be a leisurely week in the markets as earnings season kicks off tomorrow! Banks are up first and we’ll be keeping an eye on how they performed in this historically low interest rate environment.

Unemployment is rising in San Francisco despite the low national rate and we’re seeing a growing divergence between high yield and investment grade bond performance—both phenomena the Fed should keep its eye on—but the big news today is President Trump’s 2:45 pm meeting with China’s Vice Premier Liu He on trade.

Happy Monday, Fireside Charts readers! We know Mondays can be a little rough (and you’ve got a lot of emails to get through), so we’ll stick with the highlights today:
We saw a modest rally on the back of Friday’s better-than-feared jobs report, but it appears primarily driven by anticipation of additional rate cuts rather than a surge in economic confidence.

While we digest today’s job’s report (50-year unemployment low, 136,000 jobs added, lower-than-expected wage growth—it’s a lot of data), take a look at some of the other major economic trends we’ve had our eyes on this week:

The ISM Manufacturing fell to a decade low yesterday and market reaction was swift: all 11 sectors of the S&P closed out the day in the red, with Industrials leading the way with a 2.4% drop. September marks both the largest single-month drop in U.S. manufacturing since the ’07 financial crisis and the fifth straight month that global manufacturing has contracted.

The S&P 500 composite hit an all-time high in late July and is up over 344% from the cycle low point in 2009, but we’ve seen a wedge forming as we progress deeper into the economic cycle. A break-out is coming, but on which side?

Goldman Sachs analysts anticipate that less than 25% of companies going public in 2019 will net any income this year, and are expected to produce the lowest profits since the dot-com era two decades ago—despite raising a record amount of cash from their IPOs. Could a little Y2K-era anxiety be in order as well?