ISM Services: 54.9; prices: 74.0, highest since July 2022. The 10Y stays near 5.3%. Slower growth + hotter prices complicate Fed easing and pressure equity multiples. Watch Oct. 7 FOMC minutes, 2pm ET. Bonds offer competition. Stocks need earnings to make their case.

ISM SERVICES SEEN EASING SLIGHTLY AS PRICE PRESSURES RISE September ISM Services PMI is expected at 55.0, down slightly from 55.4 in August. Employment is seen improving to 48.8 from 47.8, while New Orders are expected to ease to 60.3 from 60.9. The bigger focus is inflation: Prices Paid is expected to rise to a fresh 50-month high of 73.3 from 72.6, reinforcing signs of renewed service-sector price pressures.

ISM great, until you read the respondents which are almost uniformly negative: “The memory shortage is continually getting worse. For devices requiring (memory) cards, inventory is low and prices are high.” [Retail Trade] “The bond market pushed 30-year mortgage rates up to 6.67 percent, reducing affordability and moving prospective buyers back to the sidelines. The new-build housing market continues to slow with the selling season coming to a close and the start of the new school year. Rate buydowns and discounts have become the norm instead of the tool to drive traffic.” [Construction] “Rising health-care costs, regulatory complexity and reimbursement pressure continue to drive a cautious purchasing environment within health insurers. Focus remains on cost management, supplier performance, operational efficiency and risk mitigation, resulting in increased scrutiny of supplier value, contract commitments and strategic investments.” [Finance & Insurance] “The conflict in Iran and strain on the oil supplies has resulted in our paying higher cost for fuel. Locally, our economy continues to perform well, and our housing market is solid. We expect our enrollment to remain steady as long as the local economy stays strong.” [Educational Services] “The stacked Section 301 duties plus the newer forced-labor related tariffs are keeping landed costs elevated and forcing constant TCO recalculation. We are actively dual-sourcing and evaluating nearshoring options, but qualified capacity, lead times and quality consistency are limited for certain specialty materials and components. The results are higher inventory buffers, longer planning cycles, and margin pressure that we can only partially pass through. On the positive side, Florida ports (especially Port Everglades and the broader South Florida gateway) remain relatively fluid compared with the congestion spikes earlier in the year on the West Coast and in Europe.” [Professional, Scientific & Technical Services] “We received a few communications regarding tariffs that are being refunded. Fewer materials being back-ordered at this time.” [Health Care & Social Assistance] “Concerns about market trends, reduced hospital sources of revenue and increasing debt management creating reluctance of our customers to expand.” [Management of Companies & Support Services]