The Morning Call
10/9/26
The
Market
Technical
Thursday in the
charts.
Note: the S&P
failed the break to new highs, meaning Tuesday’s spike had no follow through
momentum. So, we are still stuck in a trading range albeit at a very high level.
The thing that I am watching now is whether the index makes a second higher low
(good news) or not.
Thursday in the
technical stats.
https://www.barchart.com/stocks/momentum
https://www.barchart.com/stocks/market-performance
https://www.barchart.com/stocks/sectors/rankings
https://www.barchart.com/stocks/signals/new-recommendations
The room at the
top is crowded.
https://talkmarkets.com/article/the-room-at-the-top-of-the-sp500-has-become-twice-as-crowded
A decade of bad
breadth.
https://talkmarkets.com/article/decade-of-bad-breadth
Dealing with
narrowing breadth.
https://talkmarkets.com/article/a-bull-market-party-with-a-very-small-guest-list
Friday morning
setup: US futures are higher as a trifecta of AI relief, easing geopolitical
tensions and fading energy prices has lifted sentiment into the final trading
day of the week: OpenAI walked back Thursday's FT-sparked revenue scare by
telling people it expects to reach or exceed $70 billion in annualized revenue by
year-end, while President Trump said the US would not attack Iran
before the November midterms; as a result Nasdaq futures are up 0.8% and Brent
has slipped back toward $102 after nearly touching $106 on Thursday. As of
7:15am ET, S&P futures are 0.4% higher at 7,850 while Nasdaq futures are up
0.8% and Dow futures rise 0.2%. That follows a session in which the S&P
fell 0.47% to 7,765 and the SOX tumbled 3.4% after the FT reported OpenAI's
annualized revenue was about $50 billion, even as two thirds of S&P members
finished higher. In premarket trading, tech leads with Nvidia up 2% and the
SOXX ETF up 1.9%, while Apple is the notable Mag 7 laggard, down 2% on a report
it cut iPhone 18 Pro component orders, confirming our article
from yesterday; telecoms are getting crushed (AT&T, Verizon and
T-Mobile all down 6-7%) after SpaceX bought a nationwide low-band spectrum
portfolio, tower stocks jump and Humana soars 15% on better Medicare Advantage
ratings. The day's driver is oil (again), but this time on the way down: WTI
is down 0.9% to $90.67 and Brent is down 1.3% to $102.92 even as Hurricane
Isaias has shut in some 1.3 million b/d, or 63%, of Gulf of Mexico crude
output. Treasuries are the exception to the global bond relief rally: yields
are 1-2bps cheaper across the curve, led by the front-end, with the 10Y around
5.245% after Thursday's 6bp bull-flattening rally, while bunds and gilts
outperform after Christine Lagarde told finance ministers the ECB has tools for
disorderly spread moves. The Bloomberg dollar index is down 0.1%, with the yen
the only G10 currency lagging. In commodities, gold is up about 1.3% and has
climbed as high as $4,208, silver is up 2% to above $60, US natgas is down 1.5%
to $3.12 and copper is firmer. Bitcoin adds about 1%, trading near $82,500. US
economic data slate includes the October preliminary University of Michigan
sentiment and inflation expectations (10am). Fed speaker slate includes Collins
(4pm). The US bond market is closed on Monday.
Fundamental
Headlines
The
Economy
US
International
August
Japanese household spending rose 0.1% versus consensus of +0.5%; September YoY
machine tool orders were up 60.4% versus +61.0%.
Other
Hurricane Isaias causes partial shutdown of Gulf
oil production.
Edging toward a fiscal crisis.
https://www.axios.com/2026/10/07/france-global-bond-markets
Taxes have consequences.
https://www.powerlineblog.com/archives/2026/10/taxes-have-consequences.php
The correlation of new jobless claims to
future recession.
https://bonddad.blogspot.com/2026/10/new-jobless-claims-continue-near.html
Iran
Overnight news.
Monetary
Policy
The
ECB QT continues---and to what effect?
More on the FOMC minutes.
https://www.capitalspectator.com/fed-minutes-signal-more-tightening-amid-mixed-inflation-data/
Tariffs
A letter to US trade representative Greer.
https://cafehayek.com/2026/10/another-open-letter-to-u-s-trade-representative-jamieson-greer.html
AI
Open AI annualized revenue $20 billion less
than previously indicated.
https://giftarticle.ft.com/giftarticle/actions/redeem/087e0524-3712-4729-bcfb-000f5a4527c5
This is now being re-framed
as an accounting quirk rather than a demand reset: clarification on
OpenAI's annualized revenue run rate is spurring a relief rally in associated
thematic baskets and the chip sector after Thursday's sell-off, which saw the
OpenAI ecosystem drop 3.8% and the SOX 3.4%,
The
crowding out effect is immense.
More
on the missing productivity gains from AI.
Investing
Practical uses for
TIPS in a portfolio.
https://www.advisorperspectives.com/articles/2026/10/05/4-practical-uses-tips-in-portfolio
Don’t write off
bonds yet.
https://theideafarm.com/portfolio-management/dont-write-off-bonds-yet/
Several forces
suggest that rates may peak soon.
The party isn’t
over.
https://www.carsongroup.com/insights/blog/new-highs-are-here-but-the-party-isnt-over-yet/
The role mortgage
convexity plays in Treasury rates.
https://www.axios.com/2026/10/08/treasury-yields-mortgages-puke
Everyone is betting on higher yields.
SPX resiliency is
looking increasingly fragile.
News on Stocks in Our Portfolios
What
I am reading today
As hopefully you
know, I try to avoid politics in this blog. But I thought this worth including---not
because of who said it, but what was said.
Sci Fi laser weapons are now an anti-drone
reality.
https://www.rferl.org/a/iran-ukraine-russia-israel-laser-weapons-future-war/33696183.html
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