September 15th Market Overview

Happy Tuesday

Stocks eased off while money quietly moved out of bonds. The 10-year yield is still hanging high, at a level we have not seen since 2007. Oil above $105 after the Saudi pipeline stayed shut.

The Fed makes its call tomorrow… bond market has been voting all week and its not waiting for ‘ol Warsh’s permission. We will get a rate hike announcement tomorrow, a hike that ill take place before end of year.

Let’s dig in...

Today's Big Picture

1. Nobody agrees on when Saudi oil comes back

Energy Secretary Chris Wright says the East-West pipeline restarts in days. Andy Lipow looked at satellite photos of the damaged pumping station and said months. The line moves up to 7 million barrels a day, and the Saudis have already canceled some September deliveries to European buyers. West Texas crude settled at $105.83, its best close since May.

2. Yields at 2007 levels leave less room for error

The 10-year touched 5.04 before easing back. Barclays says 5 is the line where rates stop being background noise and start pulling stock valuations down with them. Wells Fargo strategist Ohsung Kwon trimmed his year-end S&P 500 target to 7,700 on Monday. Expensive oil is what keeps the pressure on.

3. Crypto's rulebook waits for the next Congress

The Clarity Act got 49 Senate votes and needed 60 to advance. It would have settled which agency regulates what in digital assets, the question the industry has been asking for years. Coinbase closed near $172 and bitcoin slipped under $76,000. The bill can come back, though probably not before November.

Market Overview

Index Performance

Stock Spotlight

GE Aerospace $GE ( ▼ 3.04% )  
extended a weeklong slide as jet fuel costs weigh on its spare parts business. Melius analyst Scott Mikus cut it to hold Monday, pointing out that airlines are retiring old engines instead of paying to maintain them.

Dave & Buster's $PLAY ( ▼ 18.48% )  
closed near $6.87 after an unexpected 27-cent quarterly loss on $544.1 million in revenue. CEO Darin Harper is promising cost cuts and a return to same-store sales growth.

CrowdStrike $CRWD ( ▲ 3.02% )  
climbed to around $242 as this week's AI safety talk pushed money toward cybersecurity. It was the best performer in the S&P 500 on Monday.

Big Name Updates

Bank of America $BAC ( ▲ 0.25% )  
got a defense from Morgan Stanley after Monday's drop. Analyst Manan Gosalia kept his $67 target and said the selloff was far bigger than the cut he actually made to earnings.

Wells Fargo $WFC ( ▲ 0.83% )  
CFO Mike Santomassimo said consumer spending has barely moved and credit quality still looks good. Brian Moynihan backed that up, calling out cruise bookings and restaurants.

Qualcomm $QCOM ( ▲ 4.2% )  
led the bounce in AI hardware names after Monday's selling.

Other Notable Company News

Halliburton $HAL ( ▲ 1.87% )  
finished higher with crude, along with the rest of the oil services group.

Blue Chips
MarketBeat lists “7 Blue-Chip Stocks to Add To Your Forever Portfolio”

NRG Energy $NRG ( ▼ 2.31% )  
hit a 52-week low as bond yields compete with utility dividends for the same income buyer.

Etsy $ETSY ( ▼ 0.01% )  
got an Oppenheimer upgrade to outperform on improvements to its platform.

Eli Lilly $LLY ( ▼ 0.15% )  
drew a Berenberg upgrade based on its growth and the breadth of its drug pipeline.

Axon Enterprise $AXON ( ▼ 9.5% )  
launched a $1 billion zero-coupon convertible.

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Sector Watch

Bond market

The 10-year reached 5.04% and the 30-year touched 5.39% before both eased back. Dow Jones Market Data says the last eight times the 10-year closed above 5%, it fell back under within two months, averaging 12 trading days up there. Fund managers told Bank of America that a disorderly rise in yields is now the biggest tail risk to markets, replacing the AI bubble.

Policy watch

Fed

The decision and the economic projections land at 2 p.m. ET Wednesday, with Warsh speaking half an hour later. More than eight in ten respondents to CNBC's Fed survey now expect a hike, up from under half a month ago. A majority see at least two over the next year.

Fiscal and trade

Treasury Secretary Scott Bessent spent close to three hours in front of the House Financial Services Committee.

• On the $5,000 payments Trump has floated for after the midterms: the president's intent is very real, and there are ways to do it without hitting the deficit.

• On his Treasury buyback plan: it worked, because yields might be higher without it.

• On AI regulation: no liability exemption for the labs, and more open source models built in the US.

International

China's August retail sales grew slower than expected and urban fixed-asset investment kept shrinking through the first eight months. Industrial output beat. The statistics bureau flagged strong supply against weak demand at home.

What to Watch

The Fed decision and the projections

The decision and economic projections land Wednesday at 2 p.m. ET, with Kevin Warsh speaking at 2:30. The projections matter more than the quarter point. Watch how many additional moves officials pencil in for next year.

A Saudi damage assessment

Riyadh still has not published one. A real number ends the days-versus-months argument and takes some noise out of crude.

Thanks for reading - you are now the more informed 🙂

- John

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