To The Moon

Shutdown Ripple Effect.

US government shutdown entering its 3rd week (12 Oct 2025), is undermining US businesses across sectors by disrupting normal government operations and services that businesses rely on.

This disruption is creating uncertainty and operational challenges that ripple through US economy and US central bank as it gears up for its FOMC meeting on Oct 28-29.

Initially, US market disregarded the shutdown and continued to chart new highs.

However, with one tweet from Trump’s propaganda platform, all cards came tumbling.

US Reports or Lack Of.

​Although official weekly jobless claims and continuing claims reports have not been released (for 2 weeks consecutively) due to shutdown, the financial sector has been resourceful enough to self-compiled publicly available data and estimates. (see below)

(1) Weekly Jobless Claims.

For week ending 4 Oct 2025, initial claims for state unemployment benefits rose by to a seasonally adjusted 235,000 (estimates) from 224,000 the prior week. (see above)

This is according to economists from both $JPMorgan Chase(JPM)$ and $Goldman Sachs(GS)$, with assumptions thrown-in.

Analysts from Citibank also chimed-in that:

• The last time when US govt shutdown fully in October 2013, weekly jobless claims so increased.

• It is not far-fetch to expect jobless claims to either increase further or stay elevated in the coming weeks.

(2) Continuing Jobless Claims.

For week ending 27 Sep 2025, US continuing claims increased to a seasonally adjusted 1.927 million up from 1.919 million in the prior week, JPMorgan estimated.

Goldman Sachs had a marginally lower continuing claims of 1.924 million for the same period, a difference of 4,000 claims.

Above jobless claims numbers give a cautiously optimistic view with some signs of stabilization but highlight ongoing concerns about labour market weaknesses and sluggish job creation.

The tone is guarded, reflecting uncertainty but not a deepening deterioration yet.​

(3) US Consumer Credit.

The Consumer Credit report compiled and published by Board of Governors of the Federal Reserve System was released as scheduled on 07 Oct 2025, unaffected by the shutdown.

Consumer Credit measures the change in the total value of outstanding consumer credit that requires installment payments. It is closely correlated with consumer spending and confidence.

For August 2025, consumer credit outstanding increased by only $0.36 billion at a seasonally adjusted annual rate, down sharply from an upwardly revised July 2025’s $18.1 billion.

This is the slowest pace of credit growth in 6 months, clearly indicating consumers are pulling back on borrowing.

(4) US Consumer Sentiment.

On 10 Oct 2025, US consumer sentiment (preliminary) report for October 2025, showed the consumer sentiment index virtually unchanged at 55.0 vs analysts’ forecasts of 54.1 vs September 2025’s 55.1. (see above)

US households appeared to shrug off a partial shutdown of the US government.

However, worries about the labour market and inflation continued to linger.

The report noted that:

• "Pocketbook issues like (a) high prices and (b) weakening job prospects remain at the forefront of consumers' minds.

• Interviews with respondents showed little evidence the shutdown "has moved consumers' views of the economy thus far."

With sentiment level at 55, it’s the 7th lowest since 1952, underscoring persistent economic anxieties, particularly regarding inflation and US labour market.

Despite the concerns, consumer spending has not yet contracted sharply, indicating a fragile but stable consumer mood.

Economists polled by Reuters had expected the index to slip to 54.2 by 24 Oct 2025 when the final reading is out; owing to Trump’s 10 Oct 2025 tweet on Truth Social. (see below)

Tariffs Revisit.

On 10 Oct 2025, Trump announced he will impose an additional 100% tariff on goods from China, on top of existing 30% tariffs already in effect, starting 01 Nov 2025 or sooner.

In addition, he will also impose export controls on any and all critical software.

Trump’s reaction is tied to Beijing ramping up export controls on its critical rare earths, that are needed to produce many electronics.

Actually, the tit-for-tat between the 2 super economies have been bubbling up for months.

For the US, a key trade deal goal has been to get China to increase the supply of rare earth magnets.

Despite some progress, Trump has often accused China of breaking the deal in recent months.

In response, Trump first limited US technology sales to China, including important Nvidia AI chips. Many of these limits were later removed.

Then, the Trump administration said it would soon charge fees on goods brought in by Chinese ships.

China responded by imposing similar fees on US ships, starting Fri, 10 Oct 2025.

It culminated with Beijing’s ultimate restriction that requires foreign firms to seek China’s approval for re-exports of products containing its rare earths.

Announcement Aftermath.

Trump’s aggressive tariff hike caused the US market to plunge sharply on Fri, 10 Oct 2025, mirroring a similar market reaction seen in early April 2025. (see below)

By the time trading ended on Friday:

• DJIA : fell by -2.77% (-1,269.44 to 45,479.60).

• S&P 500 : fell by -2.69% (-181.35 to 6,552.51).

• Nasdaq : fell by -3.01% (-689.92 to 22,204.43).

All 3 indexes ended Friday back at where they were on 10 Sep 2025 with Nasdaq probably closer to 12 Sep 2025 closing.

This means September 2025’s gains have been wiped out by one man’s tweet.

US economy's ability to withstand such sudden trade shocks is limited; prolonged tariff escalation and trade tensions risk severely slowing economy growth by increasing costs for businesses and consumers, threatening broader economic stability.​

​Coming Week.

With the US government still in shutdown mode, no US reports will be released this week.

However, US Federal Reserves’ officials have a busy week of public engagements:

Mon, 13 Oct 2025.

• Fed President Anna Paulson - 12:55pm.

Tue, 14 Oct 2025.

• Fed governor Michelle Bowman - 8:45am.

• Fed governor Christopher Waller - 3:25pm.

• Boston Fed President Susan Collins - 3:30pm.

Wed, 15 Oct 2025.

• Atlanta Fed President Raphael Bostic - 12:10pm.

• Fed governor Stephen Miran - 12:30pm.

• Fed governor Christopher Waller - 1:00pm.

Thu, 16 Oct 2025.

• Richmond Fed President Tom Barkin - 8am.

• Fed governor Stephen Miran - 9am.

• Fed governor Christopher Waller - 9am.

• Fed governor Michelle Bowman - 10am.

• Richmond Fed President Tom Barkin - 12:45pm.

• Fed governor Stephen Miran - 4:15pm.

• Richmond Fed President Tom Barkin - 4:30pm.

US Market.

Economists’ general overview for US stock market, highlights a cautiously optimistic but volatile outlook.

Factors that will dictate US market include:

(1) Trump’s renewed tariffs aftermath.

• Spilled over effect from Trump’s tariffs on China will continue to develop and unfold as behind-the-scenes talks / negotiations continues.

• How things will go is still unclear.

(2) Quarterly Earnings Reporting.

Q3 2025 earnings season unofficially starts on Tue, 14 Oct 2025.

According to FactSet, year-over-year earnings per share (EPS) growth rate is currently 8.0%.

In Q2 2025, corporates delivered a 11% EPS growth, that handily beaten analyst estimates.

Expectations are running high for Q3 2025’s EPS growth rate to be a repeat of Q2’s feat, given recent stocks’ rally. So Q3 earnings will need to justify current valuation.

On 30 Sep 2025, I have shared a post on “potentially” what Q3 2025 earnings might be and it is not ideal. Click here ! for details.

Companies reporting earnings:

Tue, 14 Oct 2025.

• JP Morgan Chase (JPM).

• Wells Fargo & Company (WFC).

• Goldman Sachs (GS).

• Citibank (C).

• BlackRock Inc (BLK).

• Johnson & Johnson (JNJ).

• Domino's Pizza Inc (DPZ) - Berkshire Hathaway’s investment.

Wed, 15 Oct 2025.

• Bank of America (BAC).

• Morgan Stanley (MS).

• ASML Holding N.V. (ASML).

• Abbott Laboratories (ABT).

Thu, 16 Oct 2025.

• Taiwan Semiconductor Manufacturing Company Ltd. (TSM).

• Intuitive Surgical, Inc. (ISRG).

Fri, 17 Oct 2025.

• American Express Company (AXP).

Stay cautious early in the week. Watch if US big 5 (banks) report better-than-expected revenue and profits. If they do, the market might recover losses. If not, get ready to exit ? Really ?

Remember to check out my other posts. (See below). Help to Repost ok, Thanks.

Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks.

• Quantum Soaring Twins, RGTI & QBTS - A Buy ? Fri, 10 October. Idea post.

• NIO: Tunnel's End – A "BUY" Signal ? Thu, 09 October. Pick post.

• DKNG : Buy Into Weakness, Cramer Says ! Wed, 08 October. Pick post.

• Do you think China will react this week and impose additional tariffs on US ’?

• Do you think Q3 2025 earnings will exceed analysts’ forecasts and help to prop up US market ?

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