First Day of Shutdown

Thursday, October 2nd, 2025

World News — Trump Plans to Use Federal Shutdown to Fire Federal Workers

Bloomberg

President Donald Trump is using the ongoing government shutdown as leverage to push mass federal worker layoffs, with White House Budget Director Russell Vought saying agencies are preparing to terminate employees within days, a sharp escalation beyond typical furloughs. The administration has already frozen $18 billion in New York City infrastructure funding, citing diversity and equity concerns, and cut $8 billion from renewable energy projects in states that backed Kamala Harris in 2024, moves that target Democratic constituencies. While Press Secretary Karoline Leavitt stressed layoffs were “imminent,” Vice President JD Vance downplayed the severity, saying Republicans don’t want to fire workers but may be forced to do so to save money. Democrats, framing the clash around Affordable Care Act subsidies set to expire, warned that millions could face soaring insurance premiums without congressional action, while moderates in both parties quietly explored a temporary stopgap deal. For now, Trump and GOP leaders see the shutdown as an opportunity to shrink government and force concessions, betting that voters will blame Democrats for the standoff heading into the midterms.

Tech — BYD Sales Slides

FT

BYD’s 19-month streak of sales growth ended in September as the Chinese EV maker sold just over 396,000 vehicles, down 5.5% from a year earlier, reflecting weaker domestic demand and regulatory pressure against aggressive price cuts. Analysts said the slump highlights BYD’s increasing pivot toward global markets, where exports — already more than double year-to-date at 700,000 units — are expected to account for over half of profits next year. The company has lowered its annual sales target to 4.6 million units, framing it as a more sustainable goal, while warning that its product lineup in China is losing appeal. Still, BYD has rapidly expanded abroad, with European sales nearly quadrupling to 96,000 vehicles in the first eight months of 2025, helping to cushion slowing momentum at home.

Business — Cucinelli Confirms Growth Goals

Brunello Cucinelli SpA reaffirmed its full-year growth target after posting an 11% sales increase for the first nine months, driven by strong demand for its luxury cashmere products, and firmly rejected short-seller Morpheus Research’s allegations of misleading investors about its Russian business and discounting practices. The Italian brand noted its Russian stores have remained closed since EU sanctions were imposed, its Russian operations now account for only 2.4% of total revenue, and inventories remain in line with historical norms. The company expects its EBIT margin at year-end to exceed the 2024 level and indicated it may pursue legal action to defend its reputation, as Cucinelli shares have rebounded after falling sharply in response to the short seller’s report.

The Daily Spark

The consensus has been wrong since January. The forecast for the past nine months has been that the US economy would slow down. But the reality is that it has simply not happened, see chart below. GDP growth in the second quarter was 3.8%, and the Atlanta Fed predicts that GDP in the third quarter will be 3.9%. Yes, job growth is slowing, but this is the result of slowing immigration.

The bottom line is that the US economy remains remarkably resilient, and it is becoming increasingly difficult to argue that we are still waiting for the delayed negative effects of what happened six months ago on Liberation Day in April.

For investors, this means that the upside risks to inflation are growing, particularly if the Fed continues to cut rates.

Quote of the Day

“Be alone, that is the secret of invention; be alone, that is when ideas are born.”

― Nikola Tesla