CHRIS VERSACE: Good morning, Action Alerts PLUS members. It's Monday, October 3. As we kick off a fresh week of trading, we also leave a difficult month and a difficult quarter behind us. As we start the final quarter of the year, the market is in an oversold position and stocks are looking to claw back some of the recent losses.

But many of the drivers behind the market's performance of the last few months remain in place. A slowing economic data out of the eurozone today reaffirms that, persistent inflation, and reports of a larger than expected cut to OPEC plus production, geopolitical uncertainty, as the EU readies yet another package of sanctions against Russia, and of course, risk to earnings expectations of the back half of 2022, and continued concerns for a slowdown in both business and consumer spending, and of course, the Fed. So even though we're starting off a fresh month, many of the headwinds that we closed last week with remain with us. Realizing this and avoiding what we call the hopeium trap, we will remain on the cautious and prudent path with the AAP portfolio that has served us rather well in recent months.

In terms of today, October 3, we have a rash of PMI data out of Japan, eurozone, and the UK simply confirming the global slowdown accelerated in September. Meanwhile, here at home, the S&P Global manufacturing PMI for September came in slightly better than expected, with a reading of 52.0, up from the flash reading of 51.8 and August's 51.5 figure. New orders, according to the report, rose for the first time in four months, offset by declines as we would expect, in export orders given the other data that we had this morning.

Prices however, continue to rise in September, albeit at a slower rate. However, output prices ticked up versus August as more companies looked to pass on pricing pressures. Turning to the ISM manufacturing index for September, the headline figure fell to a much weaker than expected reading of 50.9 versus 52.8 in August, hitting its lowest level since May 2020. The new order index returned to a contraction at 47.1, down more than 4% points compared to August.

Growth in the prices index also slowed in September coming in at 51.7 down from 52.5 in August. While it was the ISM Manufacturing price index's lowest reading since June 2020, we have to remember that a reading above 50 means those prices are still increasing, not falling. Putting the two manufacturing reports together, we simply have a mixed picture on the speed of the manufacturing economy, but there's little question that inflation pressures remain. We have a bunch of other data this week, including the services data and the September employment report later in the week.

But based on what we saw this morning, it would be premature to call for the Fed to back off its stated course. As I mentioned a minute ago, we'll remain on the cautious and prudent path with the portfolio. Finally, don't forget to tune into our monthly live show this week. In acknowledgment of Yom Kippur on Wednesday, we're moving the event to Thursday at 12:00 PM ET.

We're looking forward to seeing you then. And if you have a question for the monthly call, be sure to send an email at aapclub@threstreet.com and we'll answer as many questions as we can. That's the daily rundown for today. We'll be back with another edition tomorrow.