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The Data Blackout: Betting on the Fed · The SPY Trader

• 0:00
  Welcome to Spy Trader , your rapid analysis of the markets , preparing you for the week ahead !
• 0:06
  I'm your host , Chuck Charts .
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  It's 6 am on Sunday , October 5th , 2025 , Pacific Time , and we are strapping in for a week where sentiment is moderately bullish , but we are flying through a massive fog bank created by the US government shutdown .
• 0:23
  The market is currently betting big on the Federal Reserve .
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  The central question this week is simple : Will the Fed confirm the market’s hope for more rate cuts?The biggest news item by far is the release of the FOMC Meeting Minutes on Wednesday , October 8th .
• 0:40
  This will be dissected for any confirmation of a consensus for future rate easing .
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  This focus comes right after the recent ADP private payrolls report showed a loss of 32,000 jobs in September — the largest decline since 2023 .
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  Paradoxically , this weak labor data is currently Bullish for stocks because it strengthens the Fed's justification for easing monetary policy .
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  But here’s the complication : The ongoing US Government Shutdown means we have a data blackout .
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  Key reports like weekly jobless claims are delayed .
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  This high uncertainty forces traders to rely even more heavily on Wednesday’s Fed minutes and less reliable alternative indicators .
• 1:25
  Adding a final piece of economic data , we get the University of Michigan Consumer Sentiment index on Friday , October 10th .
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  A further drop here would validate recession fears but also pile more pressure on the Fed to cut rates .
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  Now , shifting to sectors and earnings .
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  The multiyear AI infrastructure narrative continues to power the Technology sector .
• 1:50
  The semiconductor index is at alltime highs , and the Technology Select Sector SPDR Fund , XLK , is expected to continue its Outperform status .
• 2:01
  This sector is less sensitive to the data blackout and benefits most from the lowerforlonger rate environment the market is pricing in .
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  Q3 earnings season is starting to trickle in , providing a crucial health check on the American consumer .
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  We need to watch PepsiCo , ticker PEP , reporting on Thursday , October 9th .
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  This report will be a major test .
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  Given concerns over sluggish US demand and tariffs causing higher input costs , a miss or a cautious outlook could drag down the broader Consumer Staples sector .
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  Also reporting Thursday is Delta Air Lines , DAL , which gives us a clearer picture of highend discretionary spending , though that report will be mixed given rising fuel costs .
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  So , what do we do with this moderately bullish but volatile outlook?My core portfolio strategy is simple : Stay invested , but favor growth .
• 2:57
  Maintain your diversified exposure using ETFs like VOO or IVV , but maintain a tactical overweight to growth through the Invesco QQQ Trust .
• 3:06
  The tactical recommendations focus on Wednesday's Fed release .
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  If you are betting on a truly dovish Fed , consider a long position on the iShares 20 Year Treasury Bond ETF , TLT .
• 3:19
  If the minutes push longterm yields down , the price of TLT will rise .
• 3:24
  We are also maintaining a Buy recommendation on the Technology Select Sector SPDR Fund , XLK , to capture the strong , persistent AI and growth momentum .
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  Finally , exercise caution around consumerfacing stocks reporting this week .
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  Specifically , I recommend avoiding or trading cautiously around PepsiCo , PEP , due to the high event risk and potential negative guidance regarding domestic demand .