This Week in Review | Q3 Recap, US Jobs, US-China Trade (Oct. 2, 2026)

The episode provides a comprehensive market recap for Q3 2026. In the first segment, the host reviews quarterly performance showing the MSCI World index finished up approximately 2% for the quarter and nearly 12% for the year, despite navigating multiple headline risks including US-Iran conflict escalation, tariff uncertainty, government debt concerns, Japanese yen weakness, and UK political changes. The Federal Reserve delivered its first rate hike since 2023 while the ECB raised rates for the second time in 2026. Bond yields climbed globally, with the US 10-year Treasury pushing above 5%. The analysis emphasizes that markets don't require perfect conditions to advance because they look forward 3-30 months, not at immediate headlines.

The jobs segment presents September employment data showing nonfarm payrolls rising 29,000 with unemployment increasing to 4.2%. The host challenges the common narrative that labor market growth automatically leads to wage growth, which in turn causes inflation requiring Fed rate hikes. The speaker argues this logic is flawed, noting that inflation-adjusted wage growth has been negative for much of 2026 despite labor market expansion. The analysis contends that when wage growth occurs, it typically responds to existing inflation rather than causing it, and stronger wages would benefit workers and household spending rather than warrant investor concern.

The final segment discusses a newly announced US-China trade agreement reducing tariffs on approximately $60 billion in goods across consumer products, industrial inputs, and commodities. The host characterizes tariffs as economic headwinds that raise costs and create business uncertainty, while noting that companies have demonstrated adaptability in adjusting to policy changes. The takeaway is that moving toward lower trade barriers reduces a major source of market uncertainty that has dominated discussions for years.