September 5th, 2025 | You Don’t Need Hot Tech Stocks To Get Great Returns, Weak Job Report Points To Fed Rate Cut, US Luxury Brands Are Destroying Europe’s Luxury Brands, Mortgage Rates Reach ...

You don’t always need to pick the hot technology stocks to get great returns Investing is very emotional and it’s always nice to be part of the crowd and buy the hot stocks like Apple, Alphabet and Amazon, but they are not always the top performers. Sometimes your boring, undervalued companies can do very well. As an example, Apple over the years has performed nicely, but over the last five years the gain was 114%. Not a bad return, but if you held a boring company like Tractor Supply over the same five years, you would have a gain of 119%. Even an old insurance company like Allstate over the last five years was up 115%. Five years ago, if you saw the value in a company called Tapestry, which owns Coach and Kate Spade, your return was over 545%. Apple's not the only big tech company that was surpassed by these boring companies. If you look at Amazon over the last five years, you’ll see a return of only 49%. One other area that is often discounted is that many of your boring companies are also paying dividends and generating cash flow that can be used to purchase other equities on sale. You may be thinking Apple does pay at dividend but it's important to note the yield is only 0.45%. Sometimes being boring is good and not being so concentrated in the hot stocks can pay off in the long run. I especially think this will be the case as we look out over the next 5-10 years!

 

Another weak job report likely solidifies a Fed rate cut

August non-farm payrolls increased by just 22,000, which was well below the estimate of 75,000. This weak report also comes with another month of negative revisions as employment in June and July combined is 21,000 lower than previously reported. Healthcare and social assistance continued to lift the headline number as the sectors added 31k and 16k jobs respectively. Many other areas in the report actually saw declines with payrolls in construction falling 7,000, manufacturing declining 12,000, and professional and business services dropping 17,000. Government also saw a decline of 16,000 jobs and I worry this is a ticking time bomb since employees on paid leave or receiving ongoing severance pay are counted as employed in the establishment survey and those that opted to take the government’s offer at the beginning of the year will start coming off severance pay as the deal lasted through September. The most recent data I saw was that 75,000 federal employees took the offer, but not all were accepted into the program. I guess we will see the actual data and its impact over the next couple of months. With the weakness, I was surprised to see leisure and hospitality produce a gain of 28,000 jobs in the month. While much of this sounds concerning, the unemployment rate held relatively steady at 4.3% and that doesn’t incorporate the fact that 1.9 million or 25.7% of all unemployed people were jobless for 27 weeks or more. My belief is that many of those that have been unemployed that long are skewing the data as I can’t imagine they have been looking for a job that hard. With the unemployment rate low and deportations potentially weighing on the supply of workers, I just don’t see how it would be possible to maintain strong job growth given the limited supply. Because of this I still don’t remain overly concerned by the weak showing. Even with my lack of concern, this will likely lead to a Fed rate cut this month with markets now essentially putting odds for a 25-basis point cut at 100% and even a 50-basis point cut is now on the table with markets putting those odds at 12% after the job print. That’s up from a zero percent chance on Thursday.

 

Should you panic over the job opening data?

The Job Openings and Labor Turnover Survey showed job openings fell to 7.18 million in the month of July. This was below the estimate of 7.4 million and also marked the lowest reading since September 2024. It was only the second time since the end of 2020 that job openings came in below 7.2 million. While this may sound troubling, I believe it just illustrates how crazy the labor market got after Covid. If we look at job openings before 2020, nearly 7.2 million openings would have been a great number. In 2016, job openings averaged 5.86 million; in 2017, job openings averaged 6.12 million; in 2018, job openings averaged 7.11 million; and in 2019, job openings averaged 7.15 million. So, while the headline may sound troubling, I still believe we could have job openings fall into the low 6 million range and it wouldn't be problematic, especially given the fact that unemployment remains extremely low. Even with that, I do believe the Fed will use this as further evidence of a softening labor market and that will give them the excuse to cut rates at the meeting this month. I'm still not convinced that is the right move, but we did hear from Fed Governor Christopher Waller, who is supposedly on the short list to replace Powell as Fed chair, that he believes there sh