Transcript

Quickly Evaporating. · ANGLES.

0:01
SPEAKER_00: Quickly evaporating, my weekly market review, September 20th, 2026.
0:09
SPEAKER_00: After spending his weekend advocating for the breakup of the United Kingdom
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SPEAKER_00: and watching golf,
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SPEAKER_00: Trump resumed his relentless pressure on the Federal Reserve to slash interest rates
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SPEAKER_00: to begin a week in which the central bank was widely expected to have to raise them
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SPEAKER_00: for the first time since 2023 to fight inflation,
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SPEAKER_00: putting him on a collision course with his own hand-picked Fed chairmen.
0:34
SPEAKER_00: An Iranian-backed attack shut down a 7-million-barrel-a-day Saudi pipeline
0:39
SPEAKER_00: on Sunday night,
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SPEAKER_00: reducing Saudi oil production to its lowest levels in decades and triggering
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SPEAKER_00: yet another big oil price spike.
0:50
SPEAKER_00: Existential AI safety concerns exploded and an openness
0:55
SPEAKER_00: to tighter regulation expressed by the OpenAI and Anthropics CEOs over
0:59
SPEAKER_00: the weekend sent tech hardware and chip stocks into a violent tailspin
1:05
SPEAKER_00: when US markets opened on Monday after pretty dreadful sessions in Asia and Europe.
1:11
SPEAKER_00: The indexes gradually recovered over the course of the day and closed only moderately lower.
1:18
SPEAKER_00: Interest rates resumed their climb with the impactful 10-year Treasury rate,
1:23
SPEAKER_00: which is the pivot for all sorts of consumer and business loans from mortgages
1:27
SPEAKER_00: to car loans to business lines of credit.
1:30
SPEAKER_00: Breaking through 5% to its highest level since 2007, right before the great financial crisis.
1:39
SPEAKER_00: It has now risen by a full percentage point since the outbreak of the Iran war in February.
1:46
SPEAKER_00: Treasury Secretary Besant was lambasted by members of
1:51
SPEAKER_00: the House Financial Services Committee, as well as some protesters, on Tuesday.
1:57
SPEAKER_00: Stocks tumbled to close lower again and interest rates continued to grind higher
2:02
SPEAKER_00: as traders watched him constantly fumble his lines
2:06
SPEAKER_00: and answer pointed questions very evasively, if at all.
2:10
SPEAKER_00: It's clear that the confidence of both Congress and financial markets
2:14
SPEAKER_00: in his stewardship of the U.S. economy is quickly evaporating.
2:20
SPEAKER_00: Retail sales data held up much better than expected on Wednesday,
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SPEAKER_00: as Americans continue to soothe their deep economic pessimism by spending money.
2:32
SPEAKER_00: Wall Street had priced in a 93% probability of
2:37
SPEAKER_00: a quarter-point Fed funds rate increase to 3.875% going into
2:42
SPEAKER_00: the FOMC interest rate setting announcement.
2:45
SPEAKER_00: And lo, it came to pass and was a unanimous decision with no dissent on the committee.
2:52
SPEAKER_00: The quarterly dot plot projections were also released and showed that almost all of
2:57
SPEAKER_00: the committee members are penciling in another increase at one of
3:01
SPEAKER_00: the two remaining meetings this year, with maybe more to come in 2027.
3:06
SPEAKER_00: And they see further upside risk to inflation in the coming months,
3:11
SPEAKER_00: with no achievement of the Fed's 2% target for years.
3:17
SPEAKER_00: Attention swiftly turned to the tone of Fed Chairman Walsh's press conference.
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SPEAKER_00: He gave clipped,
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SPEAKER_00: pithy answers and dodged any questions about any contact from Trump,
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SPEAKER_00: and the fact that the Fed is now in apparent policy conflict with Besant and
3:33
SPEAKER_00: the US Treasury,
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SPEAKER_00: and most certainly with the President,
3:36
SPEAKER_00: who quickly repeated his ridiculous assertion that interest rates should somehow be
3:40
SPEAKER_00: below 1%,
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SPEAKER_00: and concerningly claimed that he had instructed Walsh how to cast his vote.
3:49
SPEAKER_00: These three powerful institutions normally work together harmoniously in
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SPEAKER_00: a properly functioning economy, but are now completely out of sync.
3:58
SPEAKER_00: The market's takeaway was that the quarter point height could be the first of
4:02
SPEAKER_00: an upcoming series of increases.
4:06
SPEAKER_00: Shorter term interest rates shot higher, rising for a seventh consecutive session.
4:11
SPEAKER_00: Longer term rates stabilized and stocks dumped.
4:15
SPEAKER_00: With uncertainty lingering about how far and for how long Fed rate increases will go.
4:22
SPEAKER_00: And traders shifted their gaze from the Fed meeting to the weeks and months ahead
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SPEAKER_00: and didn't particularly like what they saw.
4:31
SPEAKER_00: Dip buyers finally stepped in on Thursday,
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SPEAKER_00: taking advantage of a pullback in energy prices and interest rates retreated
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SPEAKER_00: from their recent spike.
4:41
SPEAKER_00: Markets seemed to feel a little better about the expected rate hike,
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SPEAKER_00: and stocks bounced back hard,
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SPEAKER_00: quickly erasing all of Wednesday's losses to close solidly higher.
4:53
SPEAKER_00: Friday's session was a quiet one,
4:55
SPEAKER_00: as markets digested the events of the last few days,
4:58
SPEAKER_00: with stocks mostly unchanged, but interest rates moved north again.
5:03
SPEAKER_00: For the week, the NASDAQ 100 US large cap index finished higher.
5:07
SPEAKER_00: The S&P 500 and international stocks were largely flat, with US small caps lower.
5:15
SPEAKER_00: Some other things I'm thinking about.
5:17
SPEAKER_00: The S&P 500 closed right at its technically important
5:21
SPEAKER_00: and closely watched 50-day moving average, but still above its 100-day.
5:28
SPEAKER_00: Employing the enemy of my enemy as my friend principle,
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SPEAKER_00: the European Union invited Canada to become a mostly symbolic associate member in
5:38
SPEAKER_00: a reaction to Trump's toxic hostility towards them both.
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SPEAKER_00: This naturally enraged the US president who threatened very serious new tariffs
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SPEAKER_00: in response to this hostile act.