Odds and Ends: September 2025

 - The market retreated after President Trump's tariff day back in April. Nasdaq entered into bear territory and all the indexes sold off. That was then. Now, the S&P, Nasdaq and the Dow all hit new highs in September and this is suppose to be the market's toughest month. The odds and ends complete the story.

- JFL

What We Know

Any economy will slow just like your home budget when you add debt that needs to be paid off. Our leaders get around this obstacle by abusing the reserve status of the dollar. The under-estimated $37 trillion in debt needs to be paid off. Doubt is growing. One big indicator is every year we enter into a debt ceiling crisis. Consider what Sebastian says? If we somehow paid off one trillion every year for 37 straight years, we would still not pay off our national debt. What are the odds of that, you ask? Not very good. We cannot even recall one decade without some type of crisis. When we hear that banks are misbehaving again with the top four accumulating $180 T in derivatives, nails are being assembled for a coffin for the dollar. The market always has tops before the bottom falls out. We see a worldwide currency reset coming.

Market Indexes

As stated in the opening, the Dow hit a record, however we notice no conviction, no volume. The S&P also broke a new record and it did this on good volume. One strong indicator was that both Nasdaq and the Russel (small caps- IWM) made a new record high on strong volume. This points to the market continuing to its uptrend. When there is doubt about the market, the large caps get all the attention. When the market is rallying, the small caps take the lead. When you combine these two aspects, the market is telling us at Evolution that our call is wrong. With that said, we turn the the last piece of Dow Theory, the Transports. Not only did they not participate in the rally, but continue to decline with strong volume. We stand with our call as this year has seen market whiplash. We expect more.

Consumer Economy

It has been stated many times that since we do not make anything anymore in America that we are a consumer economy. The world knows since they dump all their crap on us. If that is so, why do we we find ourselves addressing our retail catastrophe? In addition, if our economy is so strong, why does retail close stores? Does this effect other sectors? Apparently, it does as we list the losers. We also notice this is not all firms. Some are growing, but the math has the liabilities over the assets.

7-11: They are quietly closing stores - 400 was the last count. This is a lot of jobs.                                    Walburgers: They are closing 79 stores.                                                                                                      Petco: They closed 25 locations last year and adding 25 more this year.                                                    Kroger: The grocery chain is dropping 60 stores and laying off 1000 workers.

Bankruptcy: Del Monte after 140 years in business. Spirit Airlines, again and Target.

By the way...we mentioned that layoffs have even hit oil and now, we read, Novo Nordisk, a rich drug maker is laying off 9,000. I got a headache! They make Wegovy. The layoffs are spreading. Softbank is dropping 20% of help. Quess where? AI. The robot has a headache. 

Now, the other side. Trader Joe's is expanding into 7 more states and adding 41 stores. There are others, but the math is heavily on the negative side. 

Ongoing Tariffs...it changes from month to month. We feel the pain when we buy our morning elixir. We read that Bolsonaro has been convicted of a coup. He received 27 years. What will Trump do? What well be the consequences? How much will the price of coffee rise? Another headache.

This is how we read the tea leaves. Peace.