What Else Could Go Wrong?

"Only the dead have seen the end of war.” — Plato

Hey, Risers!

Troubles.

U.S. political dysfunction took a back seat to a crisis in the Middle East, as Hamas attacked, killed, and kidnapped Israelis in a number of towns and kibbutzim. Many fear that this could escalate into a larger conflict with Iran as Israel retaliates, and this sentiment pushed oil prices higher. At the same time, inflation continues to rear its head. The market so far remains largely unfazed. We hope for the best but prepare for the worst.

While markets don’t have emotion, the recent conflicts have elicited a global reaction. For the history buffs out there, here are a couple of book recommendations that may (or may not) help you paint a better historical picture of the Middle East. 

• “From Beirut to Jerusalem” - Thomas Friedman

• “On Palestine” - Noam Chomsky, Ilan Pappé

• “Footnotes in Gaza” - Joe Sacco

• “Enemies and Neighbors” - Ian Black

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Economy & Markets

Well, Fed?

Pay the Price

Inflation data came in stronger than expected yet again, with the Bureau of Labor Statistics reporting that the Consumer Price Index rose by 3.7% in September, a touch higher than the 3.6% estimate. Excluding food and energy, prices rose by 4.1% from last year. On the wholesale side, the Producer Price Index rose by 2.2% in September, well above expectations of 1.6%. Excluding food and energy, this index rose by 2.7%.

Our take: Underlying inflation is still troubling.

Work on It

Initial jobless claims for the week remained low, however, coming in at 209,000, up 2,000 from last week, but below the 210,000 economists predicted.

Our take: We repeat: A strong job market stands in the way of lower interest rates.

Learning Block: The COLA

Not the drink!

People on Social Security and Supplemental Security Income (SSI) will receive a much smaller bump of 3.2% in their benefits checks next year, as the cost-of-living adjustment, or COLA. Annual inflation was 3.7% in September, matching August’s increase but off a 40-year high of 9.1% in June 2022. Without the volatile food and energy sectors, the so-called “core” inflation rate fell to 4.1% from August’s 4.3%.