Week in the Charts (10/7/25)

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The most important charts and themes in markets and investing…

1) The Market Is Partying Like It’s 1999

Mania is back on the air.

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

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

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

If the S&P 500 rises another 5% between now and December 31st, it would beat every Wall Street price target for 3 consecutive years.

2) The joy of AI = Multiple Expansion

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

Another big announcement from OpenAI came earlier this week, with plans to invest “billions” (the exact amount was not disclosed) in chipmaker AMD to secure additional computing. This saw AMD shares hit a new record high with a market capitalization of $342 billion, up from just $1.5 billion a decade ago.

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

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

3) Government Shutdown Won’t Stop Massive Spending

Last week’s US government shutdown left Republicans and Democrats deadlocked over health care spending.

How long will this closure last?

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

What has been the impact of stock market closures in the past?

Not many. In fact, the last 6 closes have 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 certain: massive government spending will continue.

The US National Debt has now increased by $1.7 trillion since the Debt Limit was raised 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 biggest driver during the quarter: buyers looking to take advantage of the electric vehicle tax credit that expires on September 30.

Tesla shares have experienced a remarkable turnaround this year, from down 45% in April to up 12% today.

5) Labor Market Cooling Continues

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

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

• U.S. private sector employment fell by 32,000 in September, which was the second straight month of job losses. This is the first time we’ve seen it 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 number so far this year since 2009.

Overall, this 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 past year, the slowest growth rate since July 2023.

7 cities in the 20-city Case-Shiller index had negative returns over the past year and 6 cities had negative returns over 3 years.

Why are price increases subsiding?

Sellers outnumbered buyers by more than 500 thousand (35%) as the housing market was the most unaffordable in history.

7) Microsoft: Safer Credit Than the US Government?

It may seem like a silly question, but Microsoft bonds are now trading at a lower yield than US Treasury bonds.

Microsoft is a AAA credit with $95 billion in cash vs. long-term debt of just $40 billion. The company also generates net income of more than $100 billion per year with free cash flow of more than $72 billion per year.

Meanwhile, the US government no longer has an AAA rating from the three major rating agencies and continues to spend more than $2 trillion a year in tax revenues.

So maybe Microsoft bonds trading at a premium to US government debt isn’t crazy.

8) The Physical and Digital Gold Rush Continues

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

Gold is heading for its best year since 1979, rising more than 51% in 2025.

Gold (+51%) and Bitcoin (+34%) are the best performing major assets so far in 2025. We have never seen them top #1/#2 in any calendar year.

9) Some Interesting Statistics…

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) in 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 many more QTs would it take to undo all QE from March 2020 to April 2022? $2.4 trillion.

e) Over a one year period, the average cost of holding cash is about 8%. But over a 30 year period, this figure grew by more than 2,000%.

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

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

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