September 25th Market Overview

Happy Friday

All three major indexes finished the week higher. Pulled that off with the 10-year Treasury yield sitting near its highest level since 2007.

This market really keeps taking punches and getting back up, we haven’t gone anywhere since June. Through war and and new fed guidance I’ll take it into the weekend. As always will share my thoughts on this tomorrow to all premium members.

Let’s dig in...

Today's Big Picture

1. Oil Is Steering the Bond Market 
   
   The 10-year yield touched 5.23 this morning, then backed off as US-Iran talks on reopening the Strait of Hormuz reportedly moved forward. US crude fell to about $92 a barrel, and yields followed it down. WSJ columnist James Mackintosh says yields are tracking oil more closely than ever. Right now, a Hormuz headline is a rate headline.

2. Gas Prices Are Wearing on Consumers 
   
   University of Michigan consumer sentiment fell to 48.1 in September, a four-month low. Gas above $4 a gallon for more than two months, plus tariff worries, is weighing on people. Year-ahead inflation expectations hit their highest since June, and the Fed watches that number closely. Traders now see about a two-in-three chance of an October rate hike.

3. Trump and Xi Buy Two More Months
   
   Xi's three-day visit was mostly ceremony, but the trade truce now runs to Jan. 10. That keeps US tariffs lower and China's rare earth export limits on hold. Many expected six months, and China experts told CNBC the shorter clock gives the US a bit more leverage. With rates this high, boring is good.

Market Overview

Index Performance (10 year T-bill today)

Stock Spotlight

Akamai $AKAM ( ▲ 1.86% )  
signed a seven-year, $11.6 billion deal to supply Anthropic with computing power, and it could grow to about $20 billion. Shares opened way up but gave back most of that pop by the afternoon.

People Inc $PPLI ( ▲ 0.81% )  
rose after going from buyer to target. MGM Resorts $MGM is weighing a bid for Barry Diller's publisher, per the Wall Street Journal, after People pulled its own offer for MGM.

Genius Sports $GENI ( ▲ 5.99% )  
rallied after JPMorgan started covering it with a bullish rating. The bank likes the sports data company's growth, improving cash flow and valuation.

Scholastic $SCHL ( ▲ 0.98% )  
fell after posting a wider first-quarter loss of $3.63 a share, versus $2.52 a year ago. Sales slipped to $216.8 million.

Big Name Updates

Meta Platforms $META ( ▲ 0.3% )  
cooled off today after a monster week that brought it within reach of a $2 trillion market value. Its AI agent, Muse, has topped Apple's App Store since last Friday with more than 3.4 million downloads.

Nike $NKE ( ▼ 3.64% )  
got downgraded to underperform at Bank of America, which cut its price target to $30 from $47. The bank pushed its turnaround call out to fiscal 2028, and the stock is already trading at 2014 levels.

Costco $COST ( ▲ 0.62% )  
beat on sales and earnings, with revenue of $95.72 billion. Its CFO called members "very resilient" but said memory chip costs are pushing electronics prices up.

Nvidia $NVDA ( ▲ 1.34% )  
got a cautious note from Seaport, which says limited TSMC capacity and Nvidia's sheer size make big upside surprises hard. Seaport isn't sold on Broadcom $AVGO either.

Microsoft $MSFT ( ▲ 0.92% )  
rolled out its biggest Copilot update yet, folding chat, coding, Office apps and tasks it runs on its own into one product. CEO Satya Nadella says "trust is going to be the biggest issue."

Other Notable Company News

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

Oracle $ORCL ( ▲ 3.06% )  
can't get out of its New Mexico data center lease and owes rent whether or not the site has power, the Wall Street Journal reported.

Alphabet $GOOGL ( ▲ 1.56% )  
is sending a test satellite with AI chips into orbit on a SpaceX rocket, Google's first step toward data centers in space.

Tesla $TSLA ( ▲ 4.65% )  
opened its Semi truck factory in Sparks, Nevada, built to make up to 50,000 trucks a year.

Starbucks $SBUX ( ▼ 0.18% )  
is closing 250 stores in the US and Canada this week.

Wendy's $WEN still has a buy rating at Loop Capital, but its price target fell to $11 from $13 after same-store sales dropped more than expected. Franchisees are hopeful about a new value menu replacing Biggie Bags in October.

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Sector Watch

Bond Market

Bonds caught a break this afternoon, but the 10-year yield is still up a full point this year. The 30-year hit its highest level since 2004 on Thursday.

• The average 30-year mortgage rate is now 7.49, the highest since April 2024.

• The dollar is near its highest level since July. Morgan Stanley admitted "we were wrong" on its weak-dollar call and now expects a stronger dollar into 2027.

Policy Watch

Fiscal & Trade

Diesel hit a record $6.53 a gallon on Tuesday and has hovered around $6.50 since. Trump's advisers are studying a short-term ban on diesel exports, and some candidates in tight midterm races say they'd support one.

• Trade Representative Jamieson Greer said AI chips weren't part of the Trump-Xi talks. Chip export rules stay where they are for now.

International

Iran wants to go back to the June 17 deal: ships move freely through Hormuz, and the US ends its naval blockade. That deal fell apart fast, and it's not clear what's different this time.

• Saudi Arabia is exporting about 6 million barrels of oil a day this month, the most since the Iran war started, per data firm Kpler. It's doing that with its East-West pipeline shut after a drone attack.

• Xi asked the US to "oppose Taiwan independence," per Beijing's readout. Trump hasn't commented on Taiwan around this summit.
  

What to Watch

Monday's US-China Details

Greer says "a lot more details" on the China talks come out Monday. I'm watching for farm purchases, since grain prices slipped today with no farm details yet.

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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