DC Lite #215

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1. ADP employment. Private businesses added 143k jobs in September (vs. +120k est, +103k prev) led by services (+101k). Tech was the only sector that lost jobs. All firm sizes added jobs except for small (1-19 employees) which lost 13k.

2. Bonds rally. "The US bond market has rallied 8% over the last 5 months, the biggest 5-month gain since 1995."

3. Panic vs. euphoria. "Most indexes near all-time highs, yet investor enthusiasm remains muted. Does NOT mean we can’t get a meaningful pullback. BUT does suggest that we are not at a bull market top."

4. SPX seasonality. "I am bullish on US equities for a year-end rally starting on October 28th. I am worried that my 6K target is too low."

5. Profits vs. Fed funds. “There is no precedent in the last 40 years for profits continuing to grow while the fed funds rate is falling … 'cuts would historically be consistent with a 20% or more decline in reported profits and so a 30%+ drop in forward earnings'.”