The Morning Call---Taking the punch bowl away

 

The Morning Call

 

9/30/26

 

The Market

         

    Technical

 

            Tuesday in the charts.

https://www.zerohedge.com/markets/weird-fking-day-bonds-down-oil-down-stocks-down-dollar-gold-ahead-macromicro-maelstrom?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2NzAxIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDcxMzc5MywiZXhwIjoxNzkzMzA1NzkzLCJhdWQiOiJ6aC1naWZ0In0.jOibLcrnULhTJhmfgJXjpDrLD6GrsqovdROaF0tdd8s

 

                        Tuesday 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 latest from Goldman’s desk.

https://www.zerohedge.com/markets/rates-move-getting-too-punitive-ignore-goldman-sees-10y-through-critical-barrier-month-end?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2NjQ3Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDcxNDc5NCwiZXhwIjoxNzkzMzA2Nzk0LCJhdWQiOiJ6aC1naWZ0In0.86PnETd6geT-NG541kSGErA1wkb13I_Ol8em7jaSK6w

 

 

Wednesday morning setup: Futures are higher with S&P leading both tech and small caps ahead of today's core PCE data and Micron earnings after the close, as yields remain sticky, unchanged from yesterday's multi-decade highs, and the USD fractionally lower. As of 8:00am ET, S&P futures are flat, with Nasdaq futures down fractionally as semis dip -20bp lagging the broader Tech tape but leading Software (-54bp) and Memory (-80bp) after Korea's Kospi closed lower erasing an early bounce. In premarket trading, Mag7s are the leaders (+28bp) ahead of Micron later. Ex-Tech, the other major sectors are indicated higher pointing to an ‘Everything Rally’ / broadening, albeit on low volume and conviction. With US/Iran deal optimism supporting markets, JPM's market intel desk, which this week reverted back to being tactically bullish, says that an actual deal likely triggers a tactical squeeze / broadening. Treasuries were little changed a day after 30-year yields hit their highest since 2002. The dollar held near its highest level since July. Commodities are rebounding led by energy: Brent rose modestly to above $103 a barrel, up about 14% for the month despite signs that crude flows from the Middle East are returning to pre-war levels; WTI is above $90/bbl, base metals are leading precious (gold flat; silver down), and ags seeing a broad-based bid. Today’s macro focus is on PCE and 4x Fed speakers with yesterday’s highlight being Williams whose comments pointing to 1x more hike in 2026, not 2x. If PCE prints cooler, we may see a material repricing in bond yields lower.

 

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications fell 6.0% while purchase applications were down 4.0%.

 

Month to date retail chain store sales were up 8.2% versus +7.6% in the prior week.

 

The July home price index was up 0.3% versus forecasts of up 0.1%.

 

The July Case Shiller home price index was flat versus predictions of +0.2%.

 

Final Q2 GDP growth was +2.2% versus estimates of +1.5%; final Q2 PCE was +6.1% versus +6.4%; Q2 final core PCE was +3.3% versus +3.6%; final Q2 retail sales were up 2.8% versus +2.2%; final Q2 corporate profits were up 7.7% versus +8.2%.

 

August personal income was up 0.2% versus expectations of up 0.4%; August personal spending was up 0.9% versus +0.8%.

 

August job openings (JOLTS) totaled 7.08 million versus consensus of 7.23 million.

https://bonddad.blogspot.com/2026/09/august-jolts-report-shows-labor-market.html

 

The August PCE was up 0.3% versus projections of +0.4%.

 

The September consumer confidence index came in at 81.9 versus forecasts of 89.2.

                          https://talkmarkets.com/article/confidence-slips-way-below-consensus

 

                        International

 

Q2 UK business investment grew 1.8% versus predictions of +1.7%; Q2 GDP was up 0.5% versus +0.4%.

 

August Japanese preliminary industrial production fell 1.7% versus estimates of +1.7%; August retail sales declined 1.2% versus -1.0%.

 

August German retail sales were up 1.3% versus expectations of +1.5%; the September unemployment rate was 3.0% versus 3.2%; September CPI was up 0.6% versus +0.5%.

 

The September Chinese manufacturing PMI was 52.1 versus consensus of 51.6; the services PMI was 51.6 versus 51.1; the composite PMI was 52.4 versus 52.3.

 

                        Other

 

                          Unwinding the yen carry trade.

                          https://www.nytimes.com/2026/09/28/opinion/bond-market-japan-yen.html?unlocked_article_code=1.E1E.dRZI.7DdsY5IwWaS4&smid=url-share

           

Why the economy has been so resilient to soaring interest rates and higher oil prices.

https://www.zerohedge.com/economics/why-has-us-economy-been-so-resilient-soaring-rates-and-higher-oil-prices-goldman-explains?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2NzQxIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDc3MzY3MCwiZXhwIjoxNzkzMzY1NjcwLCJhdWQiOiJ6aC1naWZ0In0.p5fT0DqWpSurVa9VfrsJ7PUnc7onsOaOb7gSnLzouSo

 

            Iran

 

              Overnight news.

              https://www.zerohedge.com/geopolitical/iran-says-it-received-official-us-counter-offer-ending-war

 

            Fiscal Policy

 

              Getting control of the national debt.

              https://www.washingtonpost.com/opinions/interactive/2026/09/28/nations-success-depends-fiscal-space-america-is-almost-out/

 

            Tariffs

 

              How the US Canada trade war is intensifying.

  https://www.bloomberg.com/news/articles/2026-09-29/why-the-us-canada-trade-war-is-escalating?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTc5MDcwMjQ4MSwiZXhwIjoxNzkxMzA3MjgxLCJhcnRpY2xlSWQiOiJUTTJZTEpUOU5KTFQwMCIsImJjb25uZWN0SWQiOiJCMzFCNTRDQTI3MTE0NjAxOUQxMURCN0IxRUM4NTE2MyJ9.VCvy0pqmGxc4EJvZu-anI3Ga_63CQ7AtEtdAfmLIJT4

 

 

            The Financial System

 

              A look inside the repo market.

                          https://wolfstreet.com/2026/09/28/biggest-borrowers-lenders-in-the-13-5-trillion-repo-market-how-the-hedge-fund-basis-trade-money-market-funds-fit-in/

 

     Investing

 

            A preview to Q3 earnings season.

            https://talkmarkets.com/article/what-will-the-q3-earnings-season-show-2

 

Rising government debt bodes well of stocks and bonds. (If this is true, then does bringing down the debt bodes ill for stocks and bonds?)

https://www.realclearmarkets.com/articles/2026/09/29/a_rising_national_debt_bodes_well_for_stocks_and_bonds_1208441.html

 

            The upside to rising yields.

            https://www.fortunesandfrictions.com/post/bottom-feeders

 

            High interest rates crush dividend stocks.

            https://www.bespokepremium.com/interactive/posts/think-big-blog/higher-rates-crush-dividend-stocks

 

            Taking the punch bowl away.

            https://www.advisorperspectives.com/commentaries/2026/09/29/taking-punchbowl-away-from-party

 

            The perils of averaging down.

            https://talkmarkets.com/article/the-cheap-stock-that-kept-getting-cheaper

 

            The latest from JP Morgan.

https://www.zerohedge.com/markets/after-perfectly-timing-market-2026-jpmorgans-trading-desk-turns-tactically-bullish?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2Njc5Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDcwNTY4NywiZXhwIjoxNzkzMjk3Njg3LCJhdWQiOiJ6aC1naWZ0In0.bxamjlTAbXhS-mPgQa3-GZ1c9DD9H_llWbJbi6B1K1w

 

    Investor Alert

 

            In the quarterly review of AbbVie, it failed to meet the minimum financial requirements for inclusion in the Dividend Growth Universe. Accordingly, the Dividend Growth Portfolio Sold its position in ABBV.

 

            GLD fell below the lower boundary of its short term uptrend. I Sold my trading position in GDX.

https://www.zerohedge.com/the-market-ear/golds-stress-test?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2NzAwIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDcwNjEzNCwiZXhwIjoxNzkzMjk4MTM0LCJhdWQiOiJ6aC1naWZ0In0.v_H-OQ9EsNwixfGCbGSRBA9xDPH0bq2ymTx2tgb3h50

 

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

           

                        Senate passes ‘Protest college sports’ act. (At last)

            https://www.zerohedge.com/political/senate-passes-protect-college-sports-act

 

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.

 

 

 

The Morning Call---What if the emperor has no clothes?

The Morning Call

 

9/29/26

 

The Market

         

    Technical

 

            Monday in the charts.

https://www.zerohedge.com/markets/bullion-battered-hormuz-headline-roulette-sparks-chaos-across-markets-ahead-macro-tsunami?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2NTU0Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDYyNjM3OSwiZXhwIjoxNzkzMjE4Mzc5LCJhdWQiOiJ6aC1naWZ0In0.3rLadtD4vRlLCbXZKrJpg2rs_b304ZMPIbMZA9wNCEU

 

            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

 

            The message from Market breadth.

            https://www.advisorperspectives.com/commentaries/2026/09/28/message-market-breadth

 

            Record highs, record angst.

https://www.zerohedge.com/markets/record-highs-record-angst-goldman-tech-desk-finds-median-stock-16-underwater-breadth?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2NDYzIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDYyNTEyNywiZXhwIjoxNzkzMjE3MTI3LCJhdWQiOiJ6aC1naWZ0In0.Qk6JvjVsy93aHKhlkrBGbPQe15De5X4HvBw1X50kwZ4

 

 

            Nvidia launches $150 billion stock buyback.

            https://www.wsj.com/tech/ai/nvidia-adds-record-150-billion-to-stock-buyback-910f96a8?st=LzZd8H&reflink=desktopwebshare_permalink

 

            The bond market is screaming.

https://www.zerohedge.com/the-market-ear/bond-market-screaming-stocks-dont-care?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2NjE0Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDY4NjkyOSwiZXhwIjoxNzkzMjc4OTI5LCJhdWQiOiJ6aC1naWZ0In0.Xlrrf8pB3pTU8RXx94qmfv6kqN5Xx60WokplWDW97do

 

 

            Gold under pressure.

            https://talkmarkets.com/article/gold-under-pressure-as-fed-rate-bets-rise-ahead-of-us-jobs-data

 

Tuesday morning setup: US equity futures have reversed earlier losses and trade in the green, near session highs, as bond yields drop across the curve, following a decline in oil which has also hit the dollar, despite lack of any tangible news out of Iran and as traders brace for the week’s first labor data following a never ending firehose of artificial-intelligence news and events. As of 8:15am ET, S&P futures rose 0.2% while Nasdaq futures gained 0.4%, as Mag7, semis, and memory stocks all see a mild bid while software is weaker; EU Semis are up more than 3% so we may see US get active as the market opens. The AI theme is also creating a bid across industrials and utilities; cyclicals leading defensives with notable weakness in Staples. Energy names are lower with crude prices. The commodities complex is mostly lower with gold seeing a moderate bid and some Ags higher. Oil is at session lows, down 2% as Saudi Arabia resumed flows through a key pipeline after comments from the Qatar Foreign Ministry on possible US-Iran solutions. Overall price action looks like a cautious re-risking with guarded optimism around a US / Iran deal. Today’s macro data focus is on JOLTS ahead of Friday’s NFP and another batch of Feds peakers.

 

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

The September Dallas Fed manufacturing index came in at 9.8 versus consensus of 1.0.

                          https://www.zerohedge.com/markets/we-cant-do-any-planning-dallas-fed-manufacturers-uniformly-negative

 

                        International

 

The July Japanese leading economic indicators were reported at 97.9 versus expectations of 99.0.

 

The September EU economic sentiment index was 97.9 versus estimates of 99.0; the industrial sentiment index was -3.8 versus -4.7; the services sentiment index was 6.1 versus 6.5; the consumer confidence index was -11.5 versus -16.5.

 

                        Other

 

                          The reindustrialization of America is underway.

                         https://www.apollo.com/content/dam/apolloaem/documents/insights/the-reindustrialization-of-america-is-underway.pdf

 

            Iran    

 

              Just another TACO Monday.

              https://www.zerohedge.com/geopolitical/ayatollah-vows-expel-enemy-arabian-sea-trump-says-talks-continue-week

 

              Overnight news.

 

Iran’s ability to choke off oil flowing through the Strait of Hormuz—and use that as leverage in talks with the U.S.—is breaking down, raising the risk it will resort to military escalation to bolster its position.

 

Crude oil exports from key Middle East producers rebounded in September to 16.328 million barrels per day (bpd), the highest since the US-Israeli war on Iran started in late February, data from Kepler showed on Monday, as Saudi Arabia and the United Arab Emirates boosted exports.

 

President Trump is willing to give Iran sanctions relief and release Iranian frozen funds in return for concrete Iranian steps regarding the nuclear program, U.S. officials say. But Trump took to Truth Social Monday evening to say such reports were "untrue.

 

            AI

 

              AI is repricing capital before it reprices the economy.

              https://www.realclearmarkets.com/articles/2026/09/28/ai_is_repricing_capital_before_it_reprices_the_economy_1208351.html

 

              What happens if the AI bubble bursts?

                          https://www.nytimes.com/2026/09/26/opinion/ai-bubble-banking-crisis-too-big-to-fail.html?unlocked_article_code=1.ElE.X8v4.LjB-IIZA44Es&smid=url-share

 

              The AI earnings headwind.

              https://open.substack.com/pub/samro/p/ai-depreciation-expense-earnings-accounting-headwind?utm_campaign=post-expanded-share&utm_medium=web

           

              What if the emperor has no clothes?

              https://quoththeraven.substack.com/p/its-official-the-ai-emperor-has-no?r=1ng8jx&utm_campaign=post-expanded-share&utm_medium=web

           

     Investing

 

            Inversion of the yield curve becomes the new risk.

https://www.bloomberg.com/news/articles/2026-09-27/the-bond-market-is-getting-closer-to-sounding-alarm-on-economy?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTc5MDYxNTYyMSwiZXhwIjoxNzkxMjIwNDIxLCJhcnRpY2xlSWQiOiJUTFE3TFRUOU5KTFgwMCIsImJjb25uZWN0SWQiOiJCMzFCNTRDQTI3MTE0NjAxOUQxMURCN0IxRUM4NTE2MyJ9.79c-wiJhQlfIHRb6NMsvlgvGiRqmYbcQyijW0RCyfq0

 

 

            At what yield level does the economy and Markets implode?

            https://talkmarkets.com/article/at-what-yield-do-markets-and-the-economy-implode

           

            Another infallible indicator bites the dust.

            https://bonddad.blogspot.com/2026/09/another-infallible-economic-indicator.html

 

            The bond selloff deepens.

            https://giftarticle.ft.com/giftarticle/actions/redeem/7d8de839-2d31-44ee-b07b-02c9992f3011

 

This is your father’s Market.

            https://talkmarkets.com/article/weekly-market-pulse-finally

 

            Optimism wins as an investment strategy.

            https://talkmarkets.com/article/investor-optimism-wins-as-an-investment-strategy

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            Adding leverage to America’s gambling problem.

                        https://quoththeraven.substack.com/p/adding-leverage-to-americas-gambling?r=1ng8jx&utm_campaign=post-expanded-share&utm_medium=web

 

 

 

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.

 

 

 

Monday Morning Chartology

 

The Morning Call

 

9/28/26

 

 

The Market

         

    Technical

 

The S&P was up on the week, negating a very short term downtrend thereby remaining above all DMAs and in uptrends across all time frames. This suggests that this recent small correction is just that---small. So, at this point, there is no reason to get beared up. There are some negatives: (1) last week’s rise was kicked off by a big gap up open which needs to be filled and (2) breadth is horrible. Still it suggests that the long term uptrend is solid and will remain so as long earnings growth stays strong (which it has). On the other hand, the fundamentals (fiscal policy, monetary policy, war, oil, tariffs, Oracle’s force majeure) give me the willies. So I will continue to sit on my hands (though I bought a small position in TJX last week).

 

 

 

 

 

Conversely, there was no joy in bond land. TLT continues to trade down across all timeframes and is below all three DMAs. It says that the bond boys are not nearly as sanguine about rates and inflation as their stock counterparts. I don’t see anything that would suggest a reversal… for the long bond to rise enough to even challenge the upper boundary of its very short term downtrend is going to take a series of very positive developments.

 

 

 

 

 

 

I was a bit surprised that the plunging long bond didn’t have a greater impact on GLD. While it declined, falling below both its 50 and 100 DMAs, it held above the lower boundary of its short term uptrend. That said, the pin action in TLT and UUP only adds to my uncertainty over GLD’s direction. If it confirms a break of the short term uptrend, I will Sell my GDX position.

 

 

Gold is breaking.

https://www.zerohedge.com/the-market-ear/gold-breaking-just-weeks-after-record-speculative-buying?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2NDg0Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDU5ODM0NywiZXhwIjoxNzkzMTkwMzQ3LCJhdWQiOiJ6aC1naWZ0In0.Agg7Aw33yvQtjcUECR0GG0pHGvbRKPNn9C302n-hZ60

 

The dollar had another great week, driven by the rise in interest rates. However, it still remains in an extremely wide short term trading range. On a very short term basis, it is in a clear uptrend that will likely continue as interest rates move higher.

 

 

Friday in the charts.

https://www.zerohedge.com/markets/shaken-stirred-agents-beat-bonds-week-punchy-pmis-diplomatic-duds-energy-angst?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2MzA2Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDM2Nzc3MywiZXhwIjoxNzkyOTU5NzczLCJhdWQiOiJ6aC1naWZ0In0.ZJ6EeHGoa3FYTRpXzt4Wd3HgAwg3Gx8el9FiKgj86q0

 

Friday 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 latest from Goldman’s lead hedge fund trader.

https://www.zerohedge.com/markets/equities-stuck-frustrating-cat-and-mouse-game-rates-goldman-hedge-fund-honcho-suggests?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2MjkwIiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDM2NjQwMiwiZXhwIjoxNzkyOTU4NDAyLCJhdWQiOiJ6aC1naWZ0In0._s5RoXkQddgNAw7TjHu1tXzTYtyr5skRRtRPjJKhQbQ

 

The latest form Goldman’s derivatives trader.

https://www.zerohedge.com/markets/not-seen-2000-top-goldman-derivs-trader-says-equities-refuse-price-any-panic?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2NDU2Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDU5ODk4NiwiZXhwIjoxNzkzMTkwOTg2LCJhdWQiOiJ6aC1naWZ0In0.YIx65kVgwAjoGZuL3xmaN5wJL5WCKvBPCkIhR_hnJLY

 

Monday morning setup: US futures are lower with Tech underperforming, alongside a drop in treasuries, as fading hopes for an imminent breakthrough in the Iran war sent oil prices higher and reignited worries that inflation is heating up. As of 8:00am ET, S&P 500 futures are down around 0.5% with Nasdaq futures sliding by 0.8% as semis and memory stocks underperform the group. Defensives are leading cyclicals with credit cards, defense, energy, insurance, and restaurants acting as pockets of strength. Oil is sharply higher after Iran stuck to its seven-day proposal for reopening the crucial Strait of Hormuz, saying it won’t soften its conditions, while Donald Trump sent mixed signals about his willingness to reach a deal. He told Axios that Tehran has overplayed its hand but added that he expects negotiations to resume this week. Adding to tensions, UK police are investigating a potential terror plot after five men were arrested near an air base used in US strikes against Iran. The jump in oil has pulled bond yields 4-7 bps higher as the curve flattens, the 10Y trading at 5.21% after hitting a new multi-decade high of 5.23% earlier. The DXY dollar index is higher despite weakness in USD/JPY and GBP/USD. Commodities are mixed with energy leading, metals under pressure dragged by precious which appears to be driven by temporary higher margin requirements in China for Golden Week; ags are lower. More than a dozen Fed officials are scheduled to speak this week beginning Monday, and heavy US economic slate includes September employment report Friday. Today's US economic data slate includes only September Dallas Fed manufacturing activity at 10:30 a.m. Fed speakers include Bowman (8:15 a.m.), Cook (1:25 p.m.) and Barkin (1:30 p.m.).

 

    Fundamental

 

       Headlines

 

              The Economy

 

Last week, the US stats were upbeat as were the primary indicators---one plus, one neutral. No inflation numbers. Overseas, the data was also positive with no price measures.

 

These reports keep both my forecasts for growth (muddle through) and inflation (good as it is going to get but not any worse) on track. They don’t, however, resolve one of the major economic issues facing us right now: what is the appropriate monetary response to inflation that is being driven largely by supply shortages versus demand pull?

 

In speech last week, Chicago Fed chief Goolsbee provided a possible resolution to this dilemma, pointing out that higher interest rates can have a restraining impact on some supply shortage problems. Meanwhile, several other Fed governors piled on the rate hike bandwagon. So, I think we can expect several more increases in the not so distant future. Whether Goolsbee is correct is another issue. So, until higher rates start showing up in lower inflation data, I don’t think that we can safely assume that the Fed has the problem in hand and inflation is headed lower; particularly in light of the fact that it does nothing to change the course of a misguided, gluttoness, irresponsible fiscal policy which I believe is a major contributor to our current inflation problem.

 

That said, I am not economist and can’t claim to have any clue as to the answer. But I think that it is important to hold this conundrum in the back of our mind as we view future economic data for signs that rate hikes are not the answer but rather the problem.

https://www.nytimes.com/2026/09/25/business/interest-rates-economy-markets-inflation-mortgages.html?smid=url-share

 

Wall Street faces a new rate regime.

https://www.bloomberg.com/news/articles/2026-09-24/us-treasury-yields-hit-5-as-wall-street-faces-new-rate-regime?utm_source=website&utm_medium=share&utm_campaign=copy

 

 

 The rise in real rates.

             https://econbrowser.com/archives/2026/09/is-it-real

 

             What current yields are telling us.

              https://talkmarkets.com/article/what-us-yields-are-saying-now-and-where-the-line-in-the-sand-sits-for-risk-marke

 

             And what they don’t.

             https://www.stockmarketmedia.com/2026-09-25/10-year-back-2007-levels

 

Despite everything in Washington, manufacturing is booming.

https://bonddad.blogspot.com/2026/09/despite-everything-in-washington.html

 

Another development that should be mentioned is Friday’s (for the umpteenth time) noise about a possible resolution to the war with Iran. This remains one of the ‘boy cries wolf’ situations where we have heard this routine so many times that the reasonable response at the moment is ‘I’ll believe it when I see it and I am sure not putting any money on it’. Trump’s subsequent comments confirm it.

https://quoththeraven.substack.com/p/dont-fall-for-it-nothing-has-changed?r=1ng8jx&utm_campaign=post-expanded-share&utm_medium=web

 

             

I continue to stew over the health of the AI buildout. And that wasn’t helped by Oracle’s Thursday force majeure notice on its huge New Mexico installation. Clearly, that supports the line of analysis questioning the viability of the spend.

https://quoththeraven.substack.com/p/force-majeure-is-not-a-city-in-france?r=1ng8jx&utm_campaign=post-expanded-share&utm_medium=web

 

While this certainly heightens my alert status, I am not yet bailing out of my AI related holdings. I continue to hold positions in both the chip manufacturers and the hyperscalers---although their performances has been such that I have Sold Half of virtually every stock. That said, I have my finger on the trigger for several holdings. And should the negative case appear the more likely outcome, I will take some more money off the table.

 

I want to emphasize that the issue that I am focused on is the economics of the AI buildout not the doomsday ‘we will all be dead in ten years’ variety. I made clear …. that I am quite cynical about the motivations of the doomsayers whether they are from the industry (who want the government to impose regulations that would squash potential competition) or government (who never lets a crisis go to waste in order to impose further on our collective liberties)

https://www.wsj.com/opinion/the-amazing-things-ai-is-already-doing-for-humanity-91ce0419?st=zzHpXc&reflink=desktopwebshare_permalink

 

My bottom line remains unchanged: my doubts on the trajectory of the economy/inflation/AI buildout are increasing. However, as long as earnings growth remains strong, I can’t see either an economic decline or a major sell off. Higher inflation is another matter.

              https://www.capitalspectator.com/treasury-yield-surge-pressures-rate-sensitive-shares/

 

                        US

                       

                          From late Friday:

The September final consumer sentiment index was 48.1   versus forecasts of 47.6.

https://mishtalk.com/economics/consumer-sentiment-drops-in-september-to-just-above-record-lows/

 

                        International

 

                        Other

 

Measuring government, household, and corporate debt as a percentage of GDP by nation.

https://politicalcalculations.blogspot.com/2026/09/ranking-government-household-and.html

 

            Iran

 

              Weekend news

 

   Trump rejects Iran offer (don’t forget the Tucker Carlson assertion).

                https://www.zerohedge.com/geopolitical/im-rejecting-their-deal-trump-blasts-iranian-proposal-amid-reports-hell-resume-bombing

           

                Oil flowing through the Strait of Hormuz increases.

                https://www.zerohedge.com/energy/hormuz-oil-flows-rebound-two-thirds-prewar-level-irans-grip-erodes-attacks-19-ships

 

                Saudi Arabia restarts critical pipeline.

                https://www.zerohedge.com/energy/saudi-arabia-restarts-critical-hormuz-bypass-pipeline

 

            Fiscal Policy

 

              Bond markets are the canary.

              https://www.washingtonpost.com/opinions/2026/09/24/britains-high-bond-yields-are-warning-america/

 

              A plea to make the dollar great again.

              https://www.realclearmarkets.com/articles/2026/09/25/a_dollar_is_not_a_dollar_a_plea_to_make_dollar_policy_great_again_1208060.html

             

            AI

 

              AI spending is up.

              https://www.apollo.com/wealth/insights-news/insights/daily-spark/ai-adoption-is-spreading-ai-spending-is-concentrating

 

            The Financial System

 

              The commercial real estate losses are moving from paper to reality.

              https://www.zerohedge.com/markets/commercial-real-estate-crash-moving-paper-losses-realized-losses

 

     Investing

 

            Even the richest Americans can’t beat the Market.

            https://www.marketwatch.com/story/stop-trying-to-beat-the-market-even-the-richest-americans-cant-do-it-consistently-4560e275?st=1RucfK

           

The easy money fairy tale.

                        https://quoththeraven.substack.com/p/the-free-money-financial-fairy-tale?r=1ng8jx&utm_campaign=post-expanded-share&utm_medium=web

 

            The latest from BofA.

https://www.zerohedge.com/markets/hartnett-unveils-two-numbers-trigger-risk-deleveraging-cascade?gift=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJuaWQiOiIxMTI2NDA3Iiwic2VuZGVyVWlkIjoiUUhnc3BaZVVFS2E3RHhXM216eFlKbjhaWEFoMiIsImlhdCI6MTc5MDUyMzk5NSwiZXhwIjoxNzkzMTE1OTk1LCJhdWQiOiJ6aC1naWZ0In0.JmASx85GGXW4O2PfFJ-oKWMFu-3XtDkNsFgcfrLu7W4

 

 

    News (but not a Buy recommendation) on Stocks in Our Portfolios

 

 

What I am reading today

 

 

 

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