Markets on the Edge — Data, Shutdowns & Fraying Conviction

Corporate Overview

Welcome back — this week brings everything we love: a looming government shutdown, muddy Fed signals, rising internal cracks beneath the rally, and a cliffhanger jobs report that could tip the balance. If markets were a movie, this week is the plot twist.

Here at Daly Asset Management, we don’t pander to fits and starts or splashy marketing. We cut through consensus noise with data, systematic frameworks, and zero hidden fees. We’re unapologetically contrarian — and yes, we believe the best way to serve you is to skip the asset-gathering model and just deliver hard ideas.

Want to see how we trade this chaos in real time? Join the waitlist here for access to Daly AM’s strategies, live positioning ideas, and macro models you won’t find in sell-side slide decks.

Stock of the Week: Micron Technology (MU)

Ticker: MU | Sector: Semiconductors / Memory | Market Cap: ~$135B | Dividend / Yield: ~0.3%

Semiconductors remain a leading indicator: when chip demand is turning, the rest of capex and tech follow. MU sits at the core of DRAM/NAND memory, which we believe is entering a structural upswing as generative AI, data centers, and edge deployment recalibrate memory footprints.

Valuation-wise, MU trades near 6–7× forward EBITDA — discounting more downside than we believe is likely. If weak macro causes a further leg down, MU’s backward-looking sales base gives it a floor. On the upside, early signs of inventory digestion, stabilizing ASPs, and hardware refresh cycles offer leverage to earnings.

In the context of this week’s macro storm: if the jobs data disappoints and rate-cut bets revive, MU is one of the first names to reflect reflation of growth and multiples. If the data surprises hot and the Fed freezes, MU may lag — but having exposure here gives you asymmetry.

Risks to Watch

1. A repeat tech down-leg could drag it.

2. Memory cycles are volatile and prone to overshoot.

3. Macro shock (geopolitical disruption) that reintroduces risk premiums.

Verdict: We’re long MU because it gives us direct leverage to tech and capex re-acceleration in a world that’s begging for growth to matter again.

📉 Market Snapshot (Week of Sept 29 – Oct 3)

*Approximate weekly closes.

The lean in equity markets is being financed by yield compression and safe-haven bids (gold); growth names are being tolerated, while cyclicals and commodity plays are acting cautiously. That speaks to uncertainty more than conviction. Expect range dynamics until macro proves clear.

U.S. Macro: The Jobs Report as a Sword and Shield

We enter the week dangling over a minefield: the September nonfarm payrolls release is scheduled Friday — but a government shutdown as early as Wednesday could suspend BLS operations and delay its release entirely. Markets are well aware of the leverage this gives politicians — and the Fed.

Expect the consensus forecast to be weak: analysts pin gains as low as 39,000 jobs, with unemployment holding at 4.3%. If the reports show softness, markets will receive it as permission for a more aggressive Fed pivot. If the report surprises to the upside, the Fed’s ability to cut further may be handicapped, limiting upside.

Meanwhile, upward revisions to Q2 GDP (to 3.8%) underscore that, for now, macro momentum hasn't fully broken. That said, we’re closer to “good data = bad market” regime than ever — upside surprises may reduce easing probability.

Structural Themes: Tariffs, Capex Reshuffle & Supply Chains

Sharpen your pencils — tariff whispers are re-entering headlines. The import tax rhetoric that rattled equities Monday is just a reminder that global value chains remain hostage to policy whims.

That amplifies Daly’s structural view: firms that have already localized (reshoring, nearshoring) gain resiliency. Capex cycles will bifurcate between digital/AI spend (higher margin, less tariff risk) and physical supply chains (higher volatility).

Also noteworthy: yield curve divergence across policy settings globally may lead to a slower U.S. steepening versus outright inversion snapbacks.

Geopolitics & Commodities: BRICS, China, Gold Run

The BRICS narrative continues to be overhyped, but its ability to attract capital and attention is nontrivial. Commodities and gold respond more to capital-chasing narratives than to realized supply shocks right now.

Gold’s new records reflect not fundamentals — it’s reflexive: when equity conviction wavers and yields compress, gold fills the void.

Meanwhile, China and Asia PMI data this week will be critical for global supply chain sentiment. A negative surprise there kills global leverage.

Institutional Flows & Volatility: Watching the Underbelly

With the rally now stretched and sentiment tepid, institutional flows are the hidden hand. We suspect many allocators have been “raising cash quietly” — not to exit, but to shield core 60/40 from drawdowns.

Volatility indicators — VIX, skew, and derivatives flows — are likely to flash warnings before equity breakdowns. If we see short-vol selling, jumping implied vols, or gamma squeezes in small caps, buckle in. The tension between structural underexposure and fear of missing out is thick in the tape right now.

Equity Rotation: Growth over Value — For Now

This week’s up days have been led by semiconductors, mega-cap AI names, and defensives — not the classic cyclicals. The rotation is subtle: the market is erring toward “safe growth” over beta expansions. That reinforces our MU call: we want asymmetric exposure to growth re-acceleration, not a levered bet on midcaps.

If yields fall and rate cut bets revive, expect the rotation to broaden — but be quick to spot signs of exhaustion. Value gets a moment when divergence finally becomes unsustainable.

🧭 Tactical Map: Where to Lean In

• Growth + Memory Tilt: Lean into chip/memory/AI sub-segments (e.g. MU, AMD, ASML) — they amplify upside in a reflation regime.

• Gold / Gold Producers: Use tactical longs (or hedges) to guard against volatility regime shifts.

• Selective Industrials / Reshoring Plays: Names with real domestic supply chains or nearshore exposure that avoid gambler tariff risk.

• Defensive Yield / Credit Hybrids: Use short-duration credit or floating-rate instruments as ballast — not junk.

• Optionality (Vol, Skew, Tail): Own asymmetric options — long vol, tail hedges — especially around events (jobs, shutdowns).

🔍 Theme to Watch: Policy Regime Uncertainty as Asset Class

Here’s what I want you to internalize: uncertainty over spending, tariffs, yield policy, and data flows is its own asset. It's not an anomaly — it's structural. The better your portfolio can monetize or hedge regime uncertainty, the better your long-term edge.

That means owning options, hedges, volatility, optional thesis names (like semiconductors), and anti-fragile assets (gold, real assets with optionality). It also means avoidance: don’t overcommit to cyclicals that wrong-foot you when policy or data whiplash strikes.

Over time, regimes will narrow — but we’re in a wide regime now. Build asymmetry accordingly.

📅 Forward View: Oct 6-10, 2025

💬 Final Words

We live in an era when macro uncertainty is the biggest edge. This week’s jobs report, shutdown dynamics, and market internal signals may break the complacency.
We don’t chase euphoria — we exploit fragility.

Stay nimble, data-driven, and contrarian; Daly AM is your guide for seeing what consensus won’t.

See you next week.

Disclosures: This newsletter is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Always conduct your own due diligence or consult with a financial advisor before making investment decisions.