The Week in Charts (10/7/25)

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The most important charts and themes in markets and investing…

1) Markets Are Partying Like It’s 1999

Mania is in the air again.

The Nasdaq crossed above 23,000 today for the first time, hitting another record high. It took just 27 days for the index to go from 22,000 to 23,000, the shortest amount of time between 1,000-point milestones on record.

Last week, the Dow (47,000) and S&P 500 (6,700) hit their own set of milestones.

The S&P 500 has now registered 32 all-time highs in 2025.

If the S&P 500 gains another 5% from here until December 31, it will exceed every single Wall Street price target for the 3rd consecutive year.

2) AI Exuberance = Multiple Expansion

Investor exuberance over AI continues to build, with OpenAI’s $500 billion valuation in their latest funding round lifting sentiment once again. If OpenAI was public, it would now be the 16th largest company in the S&P 500.

Another big announcement from OpenAI came early this week, with a plan to invest “billions” (exact amount was not disclosed) in chipmaker AMD to secure additional compute. That sent shares of AMD to new record highs with a market cap of $342 billion, up from just $1.5 billion a decade ago.

The excitement over AI has led to a 248% increase in the S&P 500 over the last decade, far outpacing the growth in earnings (+156%), dividends (+85%), and sales (+79%).

Which is another way of saying that multiples have been expanding and yields have been falling. The S&P 500’s price to peak earnings ratio is now at its highest level since 2000 (27.9) while the S&P 500’s dividend yield is at its lowest level since 2000 (1.17%).

3) Government Shutdown Won’t Stop the Spending Spree

The US Government shutdown last week with the Republicans and Democrats at an impasse over health care spending.

How long will the shutdown last?

At least until October 15, according to the latest odds on Polymarket.

What impact have shutdowns had on the stock market in the past?

Not much. In fact, the last 6 shutdowns all posted positive S&P 500 returns with an average gain of 0.3% since 1976.

Regardless of how long the shutdown lasts, one thing is for sure: the government spending spree will continue.

The US National Debt has now increased by $1.7 trillion since the Debt Ceiling was raised just 3 months ago. Next stop: $38 trillion.

4) Tesla’s Turnaround

Tesla deliveries hit a new record high in the 3rd quarter (497k), up 7% year-over-year. The big driver during the quarter: buyers who wanted take advantage of the EV tax credit which expired on September 30.

Tesla’s stock has experienced a remarkable turnaround this year, moving from down 45% in April to up 12% today.

5) Cooling Labor Market Continues

The September nonfarm payroll report has been delayed due to the government shutdown, but a number of other indicators continue to point to a cooling of the labor market:

• There are now 157k more Unemployed Persons than Job Openings in the US. Excluding the 2020 recession, this is the widest spread we’ve seen since 2017.

• US private sector jobs fell by 32,000 in September, the second straight month of job losses. This is the first time we’ve seen that since the 2020 recession.

• US employers have announced plans to hire 205k new employees so far this year, down 58% from 2024 levels and the lowest year-to-date total since 2009.

Taken together, this all but guarantees another Fed rate cut on October 29, with the bond market now pricing in a 95% probability.

6) Slowing Home Price Appreciation

US Home Prices rose 1.7% over the last year, the slowest growth rate since July 2023.

7 cities in the Case-Shiller 20-city index have a negative return over the last year and 6 have a negative 3-year return.

Why are price increases abating?

Sellers outnumber Buyers by over 500k (35%) due to the most unaffordable housing market in history.

7) Microsoft: A Safer Credit Than the US Government?

That might seem like a ridiculous question but Microsoft’s bonds are now trading at a lower yield than US Treasuries.

Microsoft is a AAA credit with $95 billion in cash vs. only $40 billion in long-term debt. It also generates a net profit of over $100 billion per year with over $72 billion a year in free cash flow.

Meanwhile, the US government is no longer rated AAA by any of the 3 major rating agencies and it continues to spend over $2 trillion more per year than it takes in via tax revenue.

So perhaps Microsoft’s bonds trading at a premium to US government debt isn’t that crazy after all.

8) Physical and Digital Gold Rush Continues

Bitcoin crossed above $126,000 this week for the first time, its 18th $1,000 milestone of the year.

Gold is on pace for its best year since 1979, up over 51% in 2025.

Gold (+51%) and Bitcoin (+34%) are the top performing major assets so far in 2025. We’ve never seen these two in the #1/#2 spots for any calendar year.

9) A Few Interesting Stats…

a) Wholesale egg prices in the US are now down 85% from their peak in February. From $8.05/dozen to $1.17/dozen.

b) The recently announced $55 billion deal to take Electronic Arts ($EA) private would be the largest LBO ever, surpassing the TXU deal ($45 billion) from 2007.

c) The best performing stocks in the S&P 500 over the last 5, 10, 15, and 20 years…

d) The Fed’s balance sheet is now at its lowest level since April 2020, down $2.4 trillion from its peak in April 2022. How much more QT is needed to unwind all of the QE from March 2020 to April 2022? $2.4 trillion.

e) Over one-year periods, the average cost of holding cash has been roughly 8%. But over 30-year periods, this grows to more than 2,000%.

And that’s it for this week. Thanks for reading!

Every week I do a video breaking down the most important charts and themes in markets and investing. Subscribe to our YouTube channel HERE for the latest content.

Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. Read our full disclosures here.

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