The Morning Call--When does the credit party end?

 

The Morning Call

 

10/6/26

 

The Market

         

    Technical

 

            Monday in the charts.

https://www.zerohedge.com/markets/crazy-continues-stocks-breadth-down-yields-oil-down?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3Mjk1Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTIzMjg3MSwiZXhwIjoxNzkzODI0ODcxLCJhdWQiOiJ6aC1naWZ0In0.FDKMkQZvoRh8prq6nCmQes0rfJodaxfwv-EfZCwMBGo

 

            Monday 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

 

            Asset managers dumping S&P futures.

https://www.zerohedge.com/markets/64-billion-quiet-selling-goldman-shows-asset-managers-dumping-sp-futs-soft-data-rally?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3MjgyIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTIzMTQyNSwiZXhwIjoxNzkzODIzNDI1LCJhdWQiOiJ6aC1naWZ0In0.Yhu8J6KDP-kw0hCHh74WieifzgGs3cHe4ISSQ3wlDZc

 

           

Tuesday morning setup: US equity futures are higher for a fourth day, putting the S&P on course for its longest winning streak in two months, and on pace for a record open. Tech is leading again, though the rest of the market is finally joining in, and the bond market has stopped screaming for a few hours. As of 8:00am ET, S&P futures are 0.5% higher at 7,865 and Dow futures are up 288 points; Nasdaq futures were up 0.3% and follows a session in which the Nasdaq and the Mag 7 printed fresh records even as the 10Y closed at a post-2002 high of 5.31%. In premarket trading, semis lag Nasdaq futures as the Mag 7 and Software outperform; Cyclicals ex-Energy lead Defensives and most sectors are indicated higher, which JPM calls a "notable broadening." Nvidia is on the verge of becoming the first $6 trillion company, Constellation Energy jumps after inking an 890 MW nuclear deal with Google, and Option Care soars 23% on a report of a McKesson/CD&R bid. Today's sentiment tailwind is oil: WTI is down about 2% to $87.62, and Brent has slipped back below $100, touching $98.47. Saudi Arabia says its East-West pipeline is back to 5.8 million b/d. The oil drop helps global bonds catch a bid, led by a sharp rally in French and Italian debt as Marine Le Pen unveils her budget plans. The 10Y yield is down about 4bps to 5.27%, and the curve is bull flattening, with 2s10s about 2.5bps tighter. The Bloomberg dollar index is down 0.2% at the day's low after setting a 52-week high yesterday; cable is at its highest since October 1 and the euro has pared Monday's losses. In commodities, Energy is under pressure while Ags and Metals are bid gold has rebounded from $4,104 to above $4,150, silver is little changed around $61, and US natgas is up 0.3% to $3.08, while European TTF gas jumps more than €3/MWh. Bitcoin dipped toward $85,000 overnight before recovering to $86,000. US economic data slate includes the ADP weekly employment change (8:15am ET) and the August trade balance (8:30am). Fed speaker slate includes Williams (9:05am), Musalem (10:45am), Bowman (10:46am), Schmid (1:15pm) and Logan (7pm). Treasury sells $58bn in 3-year notes at 1pm.

 

    Fundamental

 

 

       Headlines

 

              The Economy

 

                        US

 

The September services PMI was 58.8 versus estimates of 58.7; the September composite PMI was 58.4, in line.

 

The September ISM services index was 54.9 versus expectations of 55.0.

                              https://bonddad.blogspot.com/2026/10/economically-weighted-ism-indexes-for.html

 

                        International

 

                          August German factory orders fell 10.6% versus consensus of -1.0%.

 

The September Japanese consumer confidence index came in at 35.4 versus predictions of 35.3.

 

September EU retail sales were up 0.1% versus forecasts of +0.2%.

 

The September EU construction PMI was 43.4 versus projections of 43.0; the September German construction PMI was 43.5 versus 48.0; the September UK construction PMI was 46.1 versus 45.2.

 

                        Other

 

                          Production over consumption is the source of growth.

                          https://www.forbes.com/sites/johntamny/2026/10/04/who-needs-central-planning-when-we-have-conservatives/

           

                          The economy is not working like it should.

                          https://quoththeraven.substack.com/p/the-nerve-center-of-our-economic?r=1ng8jx&utm_campaign=post-expanded-share&utm_medium=web

 

                          Euro hits seventeen month low.

  https://www.bloomberg.com/news/articles/2026-10-05/euro-falls-to-17-month-low-on-region-s-fiscal-political-risks?utm_source=website&utm_medium=share&utm_campaign=copy

 

                       

                          France is cracking, the euro is imploding.

  https://www.zerohedge.com/the-market-ear/france-cracking-euro-imploding-and-now-dirty-sanchez-joins-mess?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3MjI0Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTIzMTc5OCwiZXhwIjoxNzkzODIzNzk4LCJhdWQiOiJ6aC1naWZ0In0.P6DWSxjaJsFIL70jHVYwP-wh2seSfgfl3c8In6KvERU

 

 

            Iran

 

              Overnight news.

              https://www.zerohedge.com/geopolitical/houthis-seize-yemen-parliament-speakers-home-cut-taiz-aden-lifeline-all-out-war-erupts

 

            Inflation

 

              Truckers are having a tough time surviving.

  https://www.wsj.com/economy/truckers-are-using-every-trick-they-can-to-survive-soaring-diesel-prices-0af349aa?st=m3Qoi7&reflink=desktopwebshare_permalink

 

 

            AI

 

               Robots are not coming for your job.

               https://www.apollo.com/wealth/insights-news/insights/daily-spark/robots-are-not-coming-for-your-job

 

              When does the credit party end?

  https://www.zerohedge.com/markets/when-does-credit-party-end-goldman-morgan-stanley-map-ai-debt-binge-edges-start-crack?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI3MzExIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MTI5MjAwMywiZXhwIjoxNzkzODg0MDAzLCJhdWQiOiJ6aC1naWZ0In0.hzorpS5QKvVy0NmfzG-kAmk0eh-jz4eNiAmrNmZB3T0

 

 

            Tariffs

 

              The simple case for free trade.

              https://thedailyeconomy.org/article/keep-the-case-for-free-trade-simple/

 

     Investing

 

            The AI wealth effect.

            https://www.axios.com/2026/10/01/ai-wealth-stocks-economy

 

            Is it time to nibble at bonds?

                        https://wolfstreet.com/2026/10/03/a-wild-week-for-10-year-30-year-treasury-yields-is-there-blood-in-the-streets-yet-is-it-good-enough-for-me-to-nibble/

 

            Treasury yields haven’t cracked the bull market…yet.

            https://www.capitalspectator.com/rising-treasury-yields-havent-cracked-the-bull-market-yet/

 

            The math that breaks retirement.

            https://talkmarkets.com/article/sequence-of-return-risk-the-math-that-breaks-retirements

 

            Global pension funds cut US equities exposure.

            https://giftarticle.ft.com/giftarticle/actions/redeem/6ff32057-a20f-41ac-8ced-9a33d86adbcf

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

           

 

 

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