U.S. Services & Manufacturing PMI

• S&P Global surveys show U.S. growth is slowing, with the services index slipping to 53.9 and manufacturing to 52.0, as tariffs raise costs and firms cut hiring
• Service activity fell to a three-month low and manufacturing to a two-month low, with both sectors facing weaker expansions and record-high factory inventories
• While businesses see some optimism from trade deals and Fed rate cuts, hiring is likely to stay muted as tariffs squeeze profit margins

New Home Sales

• New-home sales surged 20.5% in August to an annual rate of 800,000, the highest since January 2022, and far above Wall Street’s 650,000 estimate
• Builders boosted August sales with incentives, and by September, 39% of builders reported they had cut prices by an average of 5%
• Economists caution the jump may be overstated due to seasonal adjustments, though lower mortgage rates and strong buyer demand could sustain sales momentum

PCE Index

• The PCE index rose 0.3% in August (core PCE up 0.2%), keeping annual inflation at 2.7% and core inflation at 2.9%
• Prices linked to tariffs rose only slightly, with goods up 0.1% and services up 0.3%, suggesting inflation remains contained
• The report reassures the Fed that inflation is manageable, leaving future rate cuts dependent on upcoming jobs and price data

U.S. Tariff & Trade‍

• President Trump announced a 100% tariff on branded and patented pharmaceutical imports effective Oct. 1, unless manufacturers are actively “building U.S. production facilities”; this appears to conclude a Section 232 investigation into pharmaceuticals initiated in April, and has sparked confusion as officials and trade groups seek clarity on scope and enforcement
• President Trump announced a 50% tariff on kitchen cabinets, bathroom vanities, and related products, along with a 30% tariff on upholstered furniture effective Oct. 1 due to the “flooding” of this product by other countries into the US; this action likely concludes a Section 232 investigation into timber, lumber, and wood products launched in March 
• President Trump announced a 25% tariff on imports of heavy trucks effective Oct. 1; this action likely concludes a Section 232 investigation into medium- and heavy-duty trucks initiated April, though product definitions and enforcement details have not yet been provided
• The Bureau of Industry and Security announced two new Sec 232 investigations to determine the effects on national security of imports of (1) personal protective equipment, medical consumables, medical equipment  and (2) robotics and industrial machinery with decision on tariffs potentially arriving by spring 2026

Jobless Claims

• Initial jobless claims, a measure of how many workers were laid off across the U.S., decreased to 218,000 in the week ended September 19, down 14,000 from the prior week.
• The four-week moving average was 237,500, down 2750 from the prior week.
• Continuing claims – those filed by workers unemployed for longer than a week – decreased at at 1.926 million in the week ended September 12. This figure is reported with a one-week lag.

Fed’s Balance Sheet

• The Federal Reserves assets totaled $6.608 trillion in the week ended September 26, down $0.2 billion from the prior week.
• Treasury holdings totaled $4.201 trillion, up $0.1 billion from the prior week.
• Holdings of mortgage-backed securities (MBS) were $2.10 trillion in the week, down $1.6 billion from the prior week.

Total Public Debt

• Total public debt outstanding was $37.47 trillion as of September 26, an increase of 6.1% from the previous year.
• Debt held by the public was $30.16 trillion, and intragovernmental holdings were $7.31 trillion.

GDP

• The latest annualized U.S GDP stands at $30.35 trillion as of June 30, 2025 an increase of 1.31% from the previous quarter , & an increase of 4.61% from the previous year
• The total public debt-to-GDP ratio is at 119.30% as of June 30, a decrease of -0.74% from the previous year

Inflation Factors

CPI:

• The consumer-price index rose 2.9% in August year over year.
• On a monthly basis, the CPI increased 0.4% in July on a seasonally adjusted basis, after increasing 0.2% in July.
• The index for all items less food and energy (core CPI) rose 0.3% in August, after rising 0.3% in July.
• Core CPI increased 3.1% for the 12 months ending August.

Food & Beverages:

• The food at home index increased 2.7% in August from the same month a year earlier, and increased 0.6% in August month over month.
• The food away from home index increased 3.9% in August from the same month a year earlier, and increased 0.3% in August month over month.

Commodities:

• The energy commodities index increased 1.7% in August after decreasing (1.9%) in July.
• The energy commodities index fell (6.2%) over the last 12 months.
• The energy services index fell (0.3%) in August after decreasing (0.3%) in July.
• The energy services index rose 7.7% over the last 12 months.
• The gasoline index fell (6.6%) over the last 12 months.
• The fuel oil index fell (0.5%) over the last 12 months.
• The index for electricity rose 6.2% over the last 12 months.
• The index for natural gas rose 13.8% over the last 12 months.

Supply Chain:

• Drewry’s composite World Container Index decreased to $1,913.02 per 40ft container for the week of September 19
• Drewry’s composite World Container Index has decreased by (51.8%) over the last 12 months.

Housing Market:

• The shelter index increased 0.4% in August after increasing 0.2% in July.
• The rent index increased 0.4% in  August after increasing 0.2% in July.
• The index for lodging away from home increased 0.3% in August after decreasing (1.5%) in July.

Federal Funds Rate

• The effective Federal Funds Rate is at 4.08% , down (0.25%) year to date.

Middle East

• President Trump publicly threatened to block Israel from annexing the West Bank, reiterating a pledge to Arab leaders and increasing pressure on Prime Minister Netanyahu amid the ongoing Gaza conflict
• The U.S. is proposing a postwar Gaza plan with former U.K. Prime Minister Tony Blair potentially overseeing a transitional authority, while Trump seeks Israeli support for a cease-fire and broader peace deal
• Israel closed the Allenby Bridge, the main border crossing between Jordan and the West Bank, further isolating the territory and potentially disrupting travel, commerce, and humanitarian aid
• The closure comes amid rising international pressure over the Gaza war and recent Western recognition of a Palestinian state, with Israel signaling it may respond strongly after Prime Minister Netanyahu’s upcoming U.S. visit

Europe

• German business confidence fell for the first time in 2025, with the Ifo business-climate index dropping to 87.7 in September, from 88.9 in August, reversing a streak of improving sentiment
• Companies reported weaker current conditions and gloomier outlooks across manufacturing and services, signaling continued stagnation amid fading trade tariff driven order boosts
• Right-wing populist parties across Europe are adopting a mix of pro-market policies and higher welfare spending to appeal to voters frustrated with cash-strapped governments
• This strategy has boosted support among working-class voters, with about 25% of Germans backing the AfD, while similar right-wing populist parties in France and the U.K. also gain traction

China

• Chinese Premier Li Qiang emphasized the need for continued U.S.-China cooperation despite disagreements, meeting American executives during his first U.S. trip in nearly a decade
• Li encouraged business leaders to help ease tensions, highlighting China’s economic resilience and promoting investment amid ongoing geopolitical and trade tensions
• China urged its companies with U.S. operations not to export domestic price-cutting strategies, signaling a desire to preserve recent trade stability with Washington
• Commerce Minister Wang Wentao reinforced the goal of stable economic ties, warning firms against excessive competition and overcapacity while supporting their U.S. growth

Turkey

• President Trump signaled he may lift sanctions on Turkey and sell F-35 jets to Ankara if talks go well, while urging President Erdogan to stop buying Russian energy and highlighting closer U.S.-Turkey cooperation after years of tense relations

France

• France’s prime minister quit after losing a vote of confidence that toppled his government. President Emmanuel Macron named Sebastien Lecornu as the new prime minister, who is now tasked with reaching a budget amidst an increasingly fragmented political environment

South Korea

• More than 300 South Korean workers detained in a U.S. immigration raid at Hyundai’s Georgia battery plant were released after a week and flown home without handcuffs, following negotiations between Seoul and Washington to ease tensions and protect future U.S.–Korea manufacturing cooperation

Brazil

• Brazil’s Supreme Court convicted former President Jair Bolsonaro of plotting to overturn the 2022 election, sentencing him to 27 years in prison, a ruling that ends his political comeback hopes and highlights the court’s vast power in shaping the country’s democratic course

Nepal

• Sushila Karki, Nepal’s first female chief justice known for her anti-corruption stance, was sworn in as interim prime minister after violent protests over corruption and a social-media ban forced the previous prime minister to resign, leaving at least 40 people dead

Japan

• Japan’s Prime Minister Shigeru Ishiba announced his resignation after less than a year in office, following election setbacks and internal party rebellion. His exit comes just days after securing a tariff deal with President Trump that cut U.S. duties on Japanese goods to 15% in exchange for major Japanese purchases and $550 billion in U.S. investments

India

• President Trump’s 50% tariff on Indian goods, meant to punish New Delhi for buying Russian oil, has backfired. Indian refiners briefly shifted to Middle Eastern crude, but Russia cut prices, making its oil even cheaper and more attractive. The move has strengthened India’s ties with Moscow and Beijing while highlighting the unintended boost to black-market crude trade

Afghanistan

• A magnitude-6.0 earthquake in eastern Afghanistan has killed at least 1,400 people, injured around 3,000, and destroyed more than 5,400 homes. Rescue efforts are hampered by mountainous terrain, landslides, and strong aftershocks, with officials warning the toll could rise further

Oil Prices

• WTI: $65.33 per barrel
  
• +4.23%) WoW; (12.60%) YTD; (6.26%) YoY
• Brent: $69.80 per barrel
  
• +4.68%) WoW; (10.66%) YTD; (4.98%) YoY

US Production

• U.S. oil production amounted to 13.5 million bpd for the week ended September 19, up 0.0 million bpd from the prior week.

Rig Count

• The total number of oil rigs amounted to 549, up 7 from last week.

Inventories

Crude Oil

• Total U.S. crude oil inventories now amount to 414.8 million barrels, down (0.5%) YoY.
• Refiners operated at a capacity utilization rate of 93.0% for the week, down from 93.3%
  in the prior week.
• U.S. crude oil imports now amount to 5.692 million barrels per day, down (2.0%) YoY.

Gasoline

• Retail average regular gasoline prices amounted to $3.15 per gallon in the week of
  September 26, down (2.2%) YoY.
• Gasoline prices on the East Coast amounted to $3.14, down (0.7%) YoY.
• Gasoline prices in the Midwest amounted to $3.09, down (2.0%) YoY.
• Gasoline prices on the Gulf Coast amounted to $2.81, down (0.6%) YoY.
• Gasoline prices in the Rocky Mountain region amounted to $3.31, down (6.8%) YoY.
• Gasoline prices on the West Coast amounted to $4.39, up 3.5% YoY.
• Motor gasoline inventories were down by 1.1 million barrels from the prior.
• Motor gasoline inventories amounted to 216.6 million barrels, down (2.1%) YoY.
• Production of motor gasoline averaged 9.71 million bpd, up (1.1%) YoY.
• Demand for motor gasoline amounted to 8.959 million bpd, up 5.1% YoY.

Distillates

• Distillate inventories decreased by -1.7 million in the week of September 26
• Total distillate inventories amounted to 123.0 million barrels, up 1.1% YoY
• Distillate production averaged 4.984 million bpd, up 4.0% YoY.
• Demand for distillates averaged 3.738 million bpd in the week, up 2.7% YoY

Natural Gas

• Natural gas inventories increased by 75 billion cubic feet last week.
• Total natural gas inventories now amount to 3,508 billion cubic feet, down (1.1%) YoY.

High-yield:

High yield bond yields increased 14bps to 6.88% and spreads increased 5bps to 313bps. Leveraged loan yields increased 15bps to 7.85% and spreads increased 3bps to 449bps. WTD high yield bond returns were negative 24bps. WTD leveraged loan returns were positive 4bps. 10yr treasury yields increased 7bps to 4.17%. High yield bond spreads widened as markets absorbed the heaviest week of new issuance since March 2021, alongside modest fund outflows. Leveraged loans posted slight gains, supported by resilient macro data and another week of steady fund inflows.

Week ended 09/26/2025

Yields & Spreads¹

Pricing & Returns¹

Fund Flows²

New Issue²

Distressed Level (trading in excess of 1,000 bps)²

Total HY Defaults

Leveraged loans:

Week ended 09/26/2025

Yields & Spreads¹

Leveraged Loan Index¹

Fund Flows²

New Issue²

Distressed Level (loan price below $80)¹

Todal Leveraged Loan Defaults

Default activity:

• Most recent defaults include: Spirit Airlines ($852mn, 8/29/2025), ModivCare ($1.1bn, 8/20/2025), Anastasia Beverly Hills ($606mn, 8/11/2025), Claire’s Stores ($506mn, 8/6/2025), Maverick Gaming ($215mn, 7/17/2025), Del Monte Foods ($864mn, 7/2/2025), Everstream ($495mn, 5/28/2025), and At Home ($1.6bn, 5/15/2025).

CLOs:

Week ended 09/26/2025

New U.S. CLO Issuance²

New U.S. CLO Issuance²

Note:High-yield and leveraged loan yields and spreads are swap-adjusted

¹ Source: Credit Suisse High Yield and Leveraged Loan Index
² Source: JP Morgan

Ratings activity:

• S&P and Moody’s High Yield Ratings

Appendix:

Diagram A: Leveraged Loan Trading Levels

Diagram B: High Yield and Leveraged Loan LTM Price

Diagram C: Leveraged Loan and High Yield Returns

Diagram J: New Issue - Leveraged Loan and High Yield

Diagram K: Leveraged Loan + HY Defaults by Sector – LTM

‍Diagram L: CLO Economics

Diagram M: Developed Country Govt. Bond Yields (%)

Diagram N: S&P 500 Historical Multiples

Diagram O: U.S. Middle-Market M&A Valuations (EV/EBITDA)

Diagram P: U.S. Large Cap M&A Valuations (EV/EBITDA)

Diagram Q: Dry Powder for All Private Equity Buyouts

Diagram R: Structured Credit Spreads

Diagram S: Structured Credit Yield

Diagram T: SOFR CURVE

Diagram U: CMBS Spreads

Diagram V: CMBS Spreads

ZCGC Real Estate:

Freight Rates

Drewry World Container Index

China-Global & Shanghai Export Container Freight Index