So too, though the tongue is a small part of the body, it boasts great things.
James 3:5 (CSB)
In February 2017, the USS Enterprise was decommissioned after over fifty years of service. It was the longest naval vessel ever built, stretching nearly the length of the Empire State Building. This floating skyscraper was the first nuclear-powered aircraft carrier, with an eight-reactor propulsion design and four steam turbines capable of generating more than 200,000 horsepower. And all the power and speed of this sea behemoth was guided by four relatively thin flaps of metal attached to the stern. Without the rudders, the USS Enterprise would have been a nuclear-powered raft. Size is not always indicative of power.
The tongue is a small part of the human body yet carries enormous power. It sets the course of lifetimes. Much of who we are today is because of what we have said and what others have said to us. James writes that "no one can tame the tongue," and if we had the discipline to control what we say, we would have the strength of character to handle everything else. Why is it so hard to rein in our tongues? There are at least two reasons. First, there exists a direct line from the tongue to the heart. What we say reflects much about who we truly are. Second, words are cheap. If we could immediately feel the pain our words cause for ourselves or quickly understand the path on which they were setting us, then we might use them more carefully.
But thankfully, Christians have the Holy Spirit, who is more than capable of supplying the wisdom and restraint for our tongues that we may need at times. Our words matter, so we should guard them through the power of the Spirit.
“Risk-on” was the tone during October's last full trading week, as Friday marked the fourth straight week of gains for major equity indices. Technology shares were the center of attention as a spate of earnings announcements led to significant declines among the largest names in the sector. The tech-name rout can't be emphasized enough as heavyweights like Amazon, Meta, and Alphabet saw their shares down double-digits for the week as earnings announcements and outlooks pushed their prices down.
Not to be outdone by the tech sector, the first estimate of third-quarter GDP showed that the measure accelerated at a 2.6% pace in the third quarter, better than the 2.3% forecast. This was the first quarter of positive growth for 2022. While investors broadly cheered this outcome, the growth came mainly from a narrowing trade deficit, regarded by professional investors as a one-off occurrence. To be fair, there were gains due to increases in consumer spending, nonresidential fixed investment and government spending. Many market observers believe these relatively bright spots in the reading are temporary as demand is beginning to get crushed under the weight of higher rates.
In addition to the first estimate of GDP, the week also saw the release of the latest composite Purchasing Managers’ Index (PMI) from S&P Global, which fell to 47.3. Outside of the initial slump during the first COVID wave in the spring of 2020, business output is retreating at the swiftest pace since the great financial crisis of 2008. The data also indicated that U.S. manufacturing activity fell into contraction territory for the first time since June 2020. Finally, the Fed’s preferred inflation gauge, Personal Consumption Expenditures Price Index (PCE), was released on Friday, which showed an increase in the monthly measures for both the broad and core statistics.
The Federal Open Market Committee meets this week, and expectations are that it will raise rates by 75 basis points, which could disappoint recent optimism and disrupt this bear market rally if it stays aggressively hawkish. In addition, the market has yet to price in the inevitable decline in earnings growth that will occur in a recession.
Developed European stocks rose in tandem with their U.S. peers, collectively putting up around 4% on the week. The European Central Bank raised its key interest rate by 75 basis points for the second time in a row and stated that more rate hikes were likely in the future as inflation remains “far too high.” Eurozone PMI fell to a 23-month low of 47.1, while inflation for the bloc remained unsustainably high.
Japan’s stock market traded higher for the week as the Bank of Japan left rates unchanged, and the PMI reading for the country remained above 50. Markets in China pulled back as investor sentiment was dampened on Monday following Xi's dramatic move towards one-man rule in China and by renewed COVID-centric lockdowns. The country also reported a GDP reading of 3.9% (if that is to be believed).
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