Gold Hits Records, Stocks Rise — Can Both Be Right?

Stocks climb, gold soars, and Washington drama looms over Q4’s kickoff.

With just two days left in September…historically the market’s toughest month…Wall Street is pushing for a rare win into quarter-end. 

Futures climbed early Monday (Dow +0.4%, S&P +0.5%, Nasdaq +0.7%), Treasury yields eased, and the dollar softened. 

But the real tell was gold: a record surge past $3,840, signaling investors aren’t buying comfort without a hedge.

That tension runs straight through Washington. A shutdown deadline looms Wednesday, right as new tariffs on drugs, furniture, and trucks kick in. 

President Trump is meeting congressional leaders in a final bid to keep the government open. The stakes go beyond political optics: a shutdown could delay Friday’s payrolls report, leaving the Fed without its most important data point heading into the late-October meeting. In markets, blind spots move money.

Global flows added more crosscurrents. The yen strengthened as traders wager the BOJ edges toward a hike. European equities extended Friday’s bounce, showing political noise hasn’t shaken momentum abroad. Oil eased as Iraqi exports resumed and OPEC+ signaled a modest production hike, but Brent clung to $69, suggesting supply risks remain baked in.

Meanwhile, single-stock stories set the early tone:

Investor Signal

September may be the market’s “cruelest month,” but seasonality flips quickly: Q4 is historically the strongest. That’s why stocks are rallying even as gold breaks records. Relief is real, but risk is louder. 

If payrolls go dark, traders will be left reading JOLTS and ADP tea leaves…and hedging harder until clarity returns. Agility, not conviction, is the currency heading into October.

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The American consumer is proving harder to break than the models predicted. Household spending rose for a third straight month, with Q2 consumption revised up to a 2.5% annual pace. Incomes are still growing faster than prices, and a “low-hire, low-fire” labor market has kept paychecks steady enough to keep wallets open… even with tariffs and higher borrowing costs in the mix.

But resilience doesn’t mean comfort. 

Inflation is drifting back toward 3%, with rent, healthcare, autos, and insurance nibbling at paychecks. Surveys show frustration, even as credit card data shows swipes keep coming. That paradox, grumbling yet spending, is the paradox propping up U.S. growth.

Macro Watch: The Fed’s recent rate cut was meant to support hiring, but strong consumption muddies the case for aggressive easing. Push too far, and policymakers risk stoking the very inflation they’re trying to tame, just as confidence runs fragile.

Investor Signal

This is a two-track market. Discretionary sectors like travel and leisure still enjoy resilient demand, while inflation-sensitive corners…autos, healthcare, insurers…feel the squeeze. 

Friday’s jobs report (shutdown permitting) will be pivotal: a weak print locks in more cuts, a strong one raises doubts that the Fed is easing into strength. For investors, it’s less about recession calls and more about navigating the knife-edge between relief and reflation.

Warren Buffett once called it “the single best measure of where valuations stand.” Today, that yardstick is blinking red. 

The Buffett Indicator, total U.S. market cap versus gross national product, has surged to 217%. For context: the dot-com bubble peaked near 150%, the pandemic frenzy around 190%. At 200%, Buffett warned, “you are playing with fire.”

The fire looks fueled by an AI-driven melt-up in megacap tech. The S&P 500’s price-to-sales ratio just hit a record 3.33, showing investors are willing to pay more for every dollar of revenue than ever before. 

Critics argue the metric is outdated in a digital economy where GDP undercounts intangible assets like IP and data. But if it’s obsolete, Buffett hasn’t gotten the memo. Berkshire Hathaway is hoarding $344B in cash and has been a net seller for 11 straight quarters.

Investor Signal
Whether you treat it as gospel or relic, the Buffett Indicator at these levels is a flashing warning light. It doesn’t tell you when markets will correct, but it tilts the odds toward mean reversion. 

For portfolios, that means trimming exposure to narrative-driven names, tilting toward quality balance sheets and strong cash flows, and keeping dry powder ready. Buffett’s own playbook suggests patience is a position.

The Trump administration is rewriting the mining playbook. After July’s surprise Pentagon-backed equity stake and price floor in MP Materials, officials are hinting more such deals are on the way to secure U.S. access to rare earths, lithium, and other critical inputs. The goal: reduce reliance on China, which still controls 70% of rare earth supply.

Energy Fuels, NioCorp, Ramaco, and USA Rare Earth have all rallied triple digits since the MP deal as investors speculate who could be next. Lithium Americas surged 90% last week on reports Washington may take a stake in its Thacker Pass project, a GM-partnered mine slated to become one of the largest lithium sources in North America.

The model is clear: price floors and equity stakes. The Pentagon set a $110/kg floor under neodymium-praseodymium oxide, guaranteeing MP’s economics while capturing 30% of upside when prices run. Analysts call it a blueprint for breaking China’s price suppression tactics and restoring investor confidence in U.S. supply chains.

Macro Watch: Washington is effectively adopting Beijing’s model of strategic capitalism, embedding itself as a co-investor to reshape market incentives. That means critical minerals aren’t just commodities anymore—they’re national security assets.

Investor Signal
The play here is domestic miners with credible projects and government-friendly narratives. Equity stakes and price floors create asymmetric setups: downside protection via policy backstops, upside if geopolitics tighten supply. For portfolios, think of rare earths and lithium less as cyclical trades and more as strategic allocations in a government-supported asset class.

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Tesla will report Q3 deliveries this week, with Wall Street expecting about 447,000 vehicles, a slight dip from last year. Independent trackers think it could be closer to 470,000, which would mark a rebound from the weak first half. 

A year ago, that number would have set the tone for the stock. Today, it’s background noise.

Shares jumped 31% in September, not because of cars but because of code. From robo-taxis already hitting the streets in Austin to humanoid robots slated for 2026, Tesla is selling itself as an AI platform first, automaker second. 

Analysts are hiking targets on the premise that the company’s upside lies less in Model 3 margins and more in software dominance.

There are still near-term wrinkles. The $7,500 federal EV credit expires at month’s end, likely pulling some sales forward and leaving a softer Q4. Inflation and rising auto insurance costs also bite at the consumer level. But Tesla’s valuation is no longer trading just on showroom math, it’s trading on a vision.

Investor Signal
Delivery numbers will still jolt the stock, but the narrative has shifted. A shortfall may spark volatility, yet AI headlines can quickly overshadow. The real question is whether Tesla can prove its AI bets are more than hype. For investors, positioning is a balancing act: tactical exposure to delivery swings versus long-term conviction in one of the market’s most powerful narratives.

First Brands, one of the country’s largest auto-parts suppliers, has filed for Chapter 11 under the weight of more than $10B in debt. 

The filing revealed liabilities as high as $50B against just $1B–$10B in assets, a collapse fueled by opaque financing structures and billions in off–balance-sheet obligations. 

A $1.1B debtor-in-possession loan will keep the lights on while independent directors investigate how invoice factoring and other hidden debt vehicles masked the company’s true condition.

The shock came not just from the size of the implosion, but from its speed. Loans tied to First Brands were trading near par only weeks ago before plunging to pennies on the dollar.

Hedge funds like Apollo profited by shorting the credit, but for many lenders the collapse felt like a trapdoor. And it wasn’t an isolated stumble: it follows the bankruptcy of subprime auto lender Tricolor earlier this month, raising fears that stress in autos could ripple through leveraged credit more broadly.

Tariffs on imported parts had already pinched U.S. suppliers. But the real story here is structural, how debt-fueled growth, when layered with accounting opacity, can unravel into systemic risk. 

Suppliers sit at the heart of both legacy and EV production chains, meaning tighter credit conditions could ripple across the entire auto ecosystem.

Investor Signal

Auto credit is flashing red. Bondholders face steep losses, while OEMs like GM and Ford may use the moment to squeeze suppliers even harder. 

For equity investors, that dynamic favors the strongest balance sheets at the top of the chain. For credit markets, First Brands is a stark reminder that private-debt complacency can unwind brutally fast,  and when it does, the cracks spread wider than the company itself.

Friday’s bounce carried into Monday, but beneath the rally sits a deeper question: how much risk is already baked into this market? 

The Buffett Indicator flashing a record 217% shows valuations stretched past dot-com and pandemic highs. Washington’s tariff-heavy industrial policy is redrawing the winners and losers in sectors from pharma to rare earths. 

Consumers keep spending, but inflation gnaws at the edges. Tesla’s deliveries may wobble, yet its stock trades like an AI proxy. And First Brands’ bankruptcy is a reminder that debt structures can unravel almost overnight.

The throughline is leverage,  financial, political, and technological. Investors are paying blue-sky multiples. Governments are wielding balance sheets to reshape supply chains. 

Households are swiping cards even as costs creep higher. Corporates are layering credit on credit to fund the future. That kind of collective leaning-in creates opportunity, but also fragility: when everyone stretches at once, small shocks can turn into cascades.

For portfolios, the next quarter is less about headlines and more about posture. Agility beats conviction. Quality beats speculation. And dry powder may be the most valuable asset of all if momentum gives way to repricing.