Weekly Insight: Volatility, Politics, and the Global Alarm

Volatility. This keyword dominates the markets this week. Global finance is facing the dual threat of a sharp economic slowdown and an unexpected political deadlock in the United States (USA shutdown), which increases uncertainty and demands strategic caution.

1. The USA Shutdown : A Political Deadlock with Economic Effects

What does “shutdown” mean in the United States? The most critical event is the US government shutdown, caused by Congress’s failure to agree on a budget. This deadlock has immediate and direct effects on the market:

• Data Freeze: The shutdown results in the suspension of the publication of crucial official economic data (such as the jobs report), forcing investors and the Federal Reserve (Fed) to navigate in the dark.
• Labor Crisis: Private data, made more relevant by the shutdown, confirm that the labor market is giving way. Private employment decreased by 32,000 units in September, and the total number of layoffs announced in 2025 is a historical high since 2020.
• Slowing Sectors: The Services PMI plummeted to 50.0 (the contraction threshold) and the manufacturing sector has been contracting for seven months, due to weak new orders.

These signs of weakness create clear pressure on the Fed to consider a further rate cut.

2. Europe, Italy, and Managing Uncertainty

Europe is also showing signs of stress and difficult choices:

• Sectoral Slowdown: Europe is in an industrial recession, highlighted by the crisis in the Chemical sector, while the Technology (Software) and Financial sectors show notable resilience.
• BCE and Stable Inflation: Eurozone inflation remained close to the target (2.2%). The European Central Bank (BCE) is expected to keep rates stable in October, but the economic slowdown prompts analysts to consider a possible rate cut in December as a preventive measure against recession.
• The Italian Fiscal Risk: The Italian government has planned a budget deviation (“scostamento di bilancio”) for tax cuts, a move that pushes the projected Public Debt/GDP ratio to increase to 137.4% in 2026. This debt increase, combined with the slight rise in unemployment to 6.0% in August, increases the perceived risk on bond markets.

3. Global Indices: Weekly and Monthly Returns

Despite the bleak macro data, equity markets registered a strong weekly and monthly rebound:

Esporta in Fogli

4. Stock of the Week: Catalyst Pharmaceuticals (CPRX)

The stock of the week, in line with the principle of maximum selectivity in a difficult market context, is Catalyst Pharmaceuticals, Inc. (NASDAQCM:CPRX).

Who is Catalyst Pharmaceuticals?

CPRX is a biopharmaceutical company focused on the development and commercialization of therapies for rare diseases (orphan diseases), a sector known for high margins and patent protection.

🚀 Growth and Financial Strength in Focus

Catalyst Pharmaceuticals not only posted the highest weekly return among the group’s stocks but did so with fundamentals that hold up even under severe valuations:

• 1-Week Return: +6.8%
• EBITDA Margin: 50.4% (sector-leading margins)
• Free Cash Flow Yield: 10.8% (excellent cash generator)
• Return on Invested Capital: 25.2% (high efficiency)
• Revenue Growth: 28.5% (above the group average)
• Analyst Recommendation: Strong Buy (1.14)

This performance, supported by a Piotroski Score of 7 which attests to its good financial health, distinguishes CPRX from those that only shone due to speculation or hype.

5. Conclusions and Strategic Implications

The overall picture of Volatility and global fragility calls for prudent and highly selective portfolio management:

• Strengthening Protection: Global weakness signals and the increase in political and fiscal risks make the use of rigorous Stop Loss a fundamental tool to protect gains. A careful evaluation of exposure to cyclical sectors (like traditional industry) might be appropriate at this stage.
• Maximum Selectivity: Data indicate that resilience is concentrated in sectors with structural growth dynamics. One might consider favoring high-quality companies that dominate their markets and the Technology (Software) and Financial sectors, which have demonstrated greater resilience.