Hedgie's Market Edge - September 29, 2025

Hey everyone, Hedgie here. The economic data keeps surprising to the upside with Q2 GDP revised to 3.8% and consumer spending holding firm. But I'm watching a market that's up 30% from April lows without even a 2% pullback. When good news can't push stocks higher, that tells me we're priced for perfection.

Let me walk you through what I'm seeing and why October might finally bring the volatility we've been missing.

The Economic Reality Check

Second quarter GDP came in at 3.8%, well above the 1.5-2% trend growth. Consumer spending drove the beat at 2.5% versus 1.7% expected. August personal spending surprised too, up 0.4% real after inflation. The Atlanta Fed's tracking Q3 at 3.9% growth.

But here's what concerns me. We're getting this growth while companies are still absorbing tariff costs through margin compression. Corporate profits rose just 0.2% in Q2, way below projections. When growth depends on companies eating costs rather than passing them through, that's unsustainable.

The Consumer Paradox