September 24th Market Overview

Happy Thursday

Alrighty, weekly jobless claims went down and dipped to 197k. That's good news to me, and it's also why interest rates keep climbing.

Yep, a hot economy keeps inflation sticky, but it also keeps businesses growing. Rising rates hurt a lot less when they come from strength.

Let’s dig in...

Today's Big Picture

1. Long-Term Rates Hit Their Highest Since 2007 
   
   The 10-year Treasury yield sits at its highest since July 2007, the 30-year since June 2004. Jefferies' Mohit Kumar thinks most of the move came from traders getting forced out of losing bets. Stocks are holding up fine, even with the 10-year well past the 4.5 level strategists had flagged as trouble.
   

2. Another Fed Voter Warms to More Hikes 
   
   Philadelphia Fed President Anna Paulson votes this year and had been in the hold-steady camp. Now she says underlying inflation isn't budging, so the Fed may need to raise rates a bit more. Traders see about two-in-three odds of an October hike, a bet few were making a month ago.
   

3. Oil Climbs as Iran Takes a Hard Line 
   
   Iran's president told the UN his country won't allow free passage through the Strait of Hormuz under a US blockade. Brent crude pushed past $105, and even contracts for next August closed at their highest since May. Traders are betting high oil sticks around, which keeps the Fed on edge.

Market Overview

Index Performance

Stock Spotlight

Oracle $ORCL ( ▼ 3.28% )  
weighed on tech, and Blue Owl $OWL, the developer of its New Mexico data center, fell too. Oracle says the project is on schedule, but investors didn't love reports that it's lining up legal cover in case of delays.

MGM Resorts $MGM ( ▼ 10.94% )  
fell after Barry Diller's People Inc. $PPLI dropped its $48.30-a-share buyout offer. Diller still holds 66.8 million shares and says he has total confidence in management.

Everpure $P ( ▲ 11.42% )  
, formerly Pure Storage, led the S&P 500 today in its first week in the index. Management said Wednesday that AI demand and business from big cloud companies should speed up growth.

Big Name Updates

Meta $META ( ▲ 4.69% )  
added to a big week after explaining how Muse, its AI agent, will make money. It's free to use, and Meta takes a small cut when Muse buys something for you.

Nvidia $NVDA ( ▼ 0.63% )  
and Apple $AAPL now make up more than one of every seven dollars in the S&P 500. The index has never leaned this hard on just two stocks.

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

Other Notable Company News

Nebius $NBIS ( ▲ 8.3% )  
rose after Bank of America raised its revenue forecasts for 2026 through 2028. BofA likes that Nebius rents some capacity on short contracts at about double what big cloud customers pay.

SoftBank $SFTBY ( ▼ 6.14% )  
rallied in Tokyo after selling $11.1 billion in bonds to cover its final $10 billion OpenAI payment.

Darden Restaurants $DRI ( ▼ 2.65% )  
, which owns Olive Garden, fell after revenue of $3.20 billion came in a hair under estimates.

BlackBerry $BB ( ▲ 2.92% )  
earned 7 cents a share on $163.3 million in revenue. Wall Street expected 4 cents and $142.5 million.

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Sector Watch

Bond Market

The sell-off went global, with Japan's 10-year yield at its highest since August 1996. Back home, the 2-year barely moved, so the pressure stayed on long-term bonds. BlackRock's Rick Rieder called it "not a crisis but an eye-opener," and I think that's the right read. Friday brings durable goods orders and the final University of Michigan consumer survey.

Policy Watch

Fed

Richmond Fed President Tom Barkin explained why he backed last week's hike. He pointed to three things:

• Gas prices look like they'll stay high for a while.

• New tariffs on Canada could keep prices up.

• The AI building boom is squeezing supply chains and raising consumer prices.

His take: if inflation won't come down quickly, "maybe we should do something about it."

Fiscal & Trade

Treasury Secretary Scott Bessent said the US and China extended their trade truce by two months, to Jan. 10. Without it, higher tariffs would have kicked in after Nov. 10.

• The Wall Street Journal reports China may offer bigger US farm purchases at today's meetings.

• Bessent says China has kept its soybean promise but is "a little behind" on about $17 billion in other farm purchases.

• Mexico says its next round of US trade talks is postponed, possibly to October.

International

Switzerland held rates at zero while many of its peers raise theirs. Traders see roughly even odds of a Swiss hike in December.

What to Watch

Costco Earnings Tonight

Costco $COST reports after the bell, and Wall Street wants $6.53 a share on $94.86 billion in revenue. Last quarter it beat on revenue and pointed to record gas volumes. With gas prices this high, I'm watching for a repeat.

Trump and Xi at the White House

Xi's state visit runs through Friday, and top US tech CEOs join the two leaders for dinner tonight. AI, Taiwan, Iran and critical minerals are all on the agenda. Expectations are low, so any real deal is a bonus.

Talk of a Hormuz Deal

Traders are weighing reports of talks on a phased deal to reopen the Strait of Hormuz, even as Houthi attacks continue. Real progress would cool oil fast, and cheaper oil is the quickest way to take pressure off bonds.

Thanks for reading - you are now the more informed 🙂

- John

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