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Posted September 2, 2026 at 4:00 pm
Jeff Praissman and Scott Bauer discuss mixed signals from economic growth, inflation, and the labor market as investors weigh the Fed’s next move. They also look at shifting sector leadership, market sentiment, and what upcoming earnings could reveal about the outlook for stocks.
The following is a summary of a live audio recording and may contain errors in spelling or grammar. Although IBKR has edited for clarity no material changes have been made.
Hey everyone, this is Jeff Praissman with Interactive Brokers. It’s my pleasure to welcome back to the IBKR Podcast Studio, Scott Bauer from Prosper Trading Academy. Hey Scott, how are you?
Jeff, I’m great. How about yourself?
I’m doing well and love having you come in here on these Wednesday mornings to talk about the market and the economy.
And for our listeners, you can find more from Scott at, uh, prospertrading.com or on our website, interactivebrokers.com. Click on Education, find webinars, podcasts, and articles from Scott and Prosper Trading. So Scott, we have you come in here, you know, every other Wednesday, sometimes every Wednesday, and just kind of, you know, for our listeners that aren’t familiar, we talk a little bit about the week a- the week be- you know, that we just got through, and then also, like, the week ahead. And, you know, it’s like a nice quick five-minute conversation, kind of get everyone up to speed. So, kind of first question is, you know, investors received updated GDP and PCE inflation data last week. Did those reports reinforce the soft landing narratives? Are there signs that, you know, economic growth and inflation are moving in less favorable directions?
Well, you know, second quarter GDP, it remained kind of subdued, right? It was like one and a half percent or so. So that made it seem like things are maybe cooling down a little bit. And then we got headline and core PCE, which is still sticky and running hot a little bit. So, you know, we’re still seeing some growth, and that’s alongside these sticky price pressures or so.
And, you know, that, that really muddies the water for the Fed. And I think it… You know, this data keeps them really cautious. And we’re most likely going to see a hike in the next couple weeks or so. But we really had a couple data points there that were opposite one another.
And, you know, equity markets, no matter what, they continue to trade near elevated levels, you know, really despite ongoing uncertainty on rates, you know, global conflict, you know, economic headwinds, commodity prices. What– You know, what sectors have shown the greatest leadership, you know, especially the last week, I should say, and what does this tell us about investor sentiment currently?
I think overall investor sentiment is a bit cautious right now. Now, it seems, Jeff, like we’re almost seeing a, a sector rotation almost on a daily basis depending on what the headline news is. But, you know, if you look at financials, communication services, consumer discretionary, it seems like those are the sectors right now where some of that tech money, some of the, the money maybe from a little bit of the AI trade has really flowed into. And I think that, you know, if investors are going to remain a bit cautious in the near term, that’s probably where they’re diversifying into.
Got it. And, you know, we always, Scott, you and I always talk about data, right? There’s no shortage of data. In fact, the ADP employment report was, you know, released this morning. It was a m- it was basically less than expected. It was like 38,000 versus, I think, 47,000 was the estimate. And we got weekly s- you know, weekly jobless claims we’re gonna release tomorrow.
So both provide additional labor market insights before, you know, Friday’s payroll report. How important, you know, are this, you know, this week’s data clusters for, you know, kind of shaping the Fed’s expectations?
It is really important. I mean, again, I th- I think, you know, regardless of what these numbers are, we will see a quarter point increase next week or in a couple weeks here. But if this, the report on Friday, the, the August jobs report, if it is another major miss like we saw last month, that, what that could do is maybe shift the curve down the road a little bit. So I think we’re still gonna have this September hike, but maybe that takes a little bit of the pressure, a little, you know, easing that potential for other hikes later in the year, even going into next year.
Right. And, you know, we’re at the tail end of this earnings season, right? But we still got a few big names coming out, right? We got Broadcom tonight. You know, Hewlett-Packard, maybe not what it once was, but still, you know, Hewlett-Packard Enterprises, Snowflake. What’s the market expecting or, you know, looking for?
I mean, look at what happened with Dell today, right? That, that stock is like $40 off its highs from i- its initial move. And I think that even with good reports, even with good guidance, the market is really still looking at this CapEx, and can these companies support how much money that they are spending, you know, for future earnings? So the big thing is gonna be guidance, maybe less CapEx, but we’ll see. I mean, Broadcom is going to be a bellwether. You know, you mentioned HP and I think Snowflake also. You know, we saw what happened with Palo Alto, some of the other stocks in that sector really following that lead. So we could still see some big movers going on the rest of this week.
Scott, as this is always, this has been great. A lot of great market talk in a short time. You know, we got college football coming up this weekend, but I think your, I think your Hoosiers have it against North Texas unless it’s the upset of all upsets. I think they’ll be okay.
We will see what happens there, but looking forward to it.
All right, Scott. Well, thanks for coming by, and until next time, you can find more from Scott at prospertrading.com, as well as on our website, interactivebrokers.com, and click on Education. Thank you.
Thanks a lot, Jeff.
The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
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