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Complacency? · ANGLES.

• 0:01
  SPEAKER_00: Complacency, my weekly market review, October 4th, 2026.
• 0:09
  SPEAKER_00: Over the weekend,
• 0:10
  SPEAKER_00: Trump killed the tentative Hormuz deal,
• 0:13
  SPEAKER_00: which had basically just restated the previous memorandum of understanding
• 0:17
  SPEAKER_00: from earlier in the summit,
• 0:18
  SPEAKER_00: that had sparked a rally in equities the previous week,
• 0:22
  SPEAKER_00: and disappointed global markets reacted by sending interest rates
• 0:26
  SPEAKER_00: and energy prices spiraling higher again, pulling stocks lower in Asia and Europe.
• 0:32
  SPEAKER_00: Despite reported apparent broad investor confidence ,
• 0:37
  SPEAKER_00: Wall Street was on edge and suffered the same fate on Monday as US stock indexes
• 0:43
  SPEAKER_00: and bond prices tumbled.
• 0:46
  SPEAKER_00: Consumer sentiment has plunged to levels not seen in years according
• 0:50
  SPEAKER_00: to data released on Tuesday With persistent deep worry among Americans about
• 0:56
  SPEAKER_00: the current cost of living and the outlook for inflation,
• 0:59
  SPEAKER_00: their job security and general economic conditions.
• 1:04
  SPEAKER_00: The latest job openings and labour turnover survey, JOLTS,
• 1:08
  SPEAKER_00: revealed a worse than expected decline in job openings ahead
• 1:12
  SPEAKER_00: of Friday's employment data.
• 1:15
  SPEAKER_00: Stocks spent the day treading water,
• 1:18
  SPEAKER_00: closing essentially unchanged,
• 1:19
  SPEAKER_00: but interest rates continued to rip higher,
• 1:22
  SPEAKER_00: with the 10-year Treasury rate back at pre-Great Financial Crisis levels.
• 1:28
  SPEAKER_00: Long-dated bonds experienced a nightmare session,
• 1:31
  SPEAKER_00: with the 30-year interest rate soaring to its highest level in almost a quarter of
• 1:35
  SPEAKER_00: a century,
• 1:37
  SPEAKER_00: As bond traders continue to dump on Treasury Secretary Besant
• 1:41
  SPEAKER_00: and his recent pitiful efforts at interest rate manipulation in time for
• 1:45
  SPEAKER_00: the midterms.
• 1:47
  SPEAKER_00: The only major Treasury maturity with a rate below 5% is now the two-year,
• 1:53
  SPEAKER_00: and even that may not last much longer.
• 1:57
  SPEAKER_00: Energy prices eased with persistent rumors of back-channel negotiations between Iran
• 2:03
  SPEAKER_00: and the US maybe getting somewhere in spite of Trump's public intransigence as
• 2:09
  SPEAKER_00: the three-week skirmish moved into its eighth month.
• 2:14
  SPEAKER_00: Wednesday's PCE inflation reading came in cooler than feared at 3.4%,
• 2:20
  SPEAKER_00: which was a relief for markets.
• 2:22
  SPEAKER_00: We also learned that consumer spending rose in August at the fastest pace in over a year.
• 2:28
  SPEAKER_00: Stocks went nowhere on the final day of the month in Q3,
• 2:32
  SPEAKER_00: although Wall Street did interpret the PCE data as reducing the probability of
• 2:37
  SPEAKER_00: a Fed Fund's rate increase at the October meeting.
• 2:41
  SPEAKER_00: Index heavyweight Micron released a sensational earnings report after the close,
• 2:46
  SPEAKER_00: shattering estimates.
• 2:49
  SPEAKER_00: October and Q4 kicked off on Thursday,
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  SPEAKER_00: with traders really wanting to carry the stock market nicely higher after
• 2:56
  SPEAKER_00: the benign PCE numbers and Micron's blowout earnings,
• 3:01
  SPEAKER_00: but were mostly unable to do so in the face of the onslaught of the bond vigilantes
• 3:06
  SPEAKER_00: who are wrecking bond prices
• 3:09
  SPEAKER_00: by relentlessly pushing longer-dated interest rates higher,
• 3:12
  SPEAKER_00: although short-end rates reversed lower on cooling expectations for
• 3:16
  SPEAKER_00: a Fed rate increase.
• 3:20
  SPEAKER_00: The indexes did eventually squeak out small gains for the session with
• 3:24
  SPEAKER_00: a late day charge after bond traders took their foot off the gas,
• 3:28
  SPEAKER_00: but the rabid enthusiasm for equities seems to be stalling.
• 3:33
  SPEAKER_00: Friday was jobs day and the report showed a weakening labor market,
• 3:37
  SPEAKER_00: which didn't add any urgency for the Fed to imminently raise rates.
• 3:43
  SPEAKER_00: Far fewer jobs were created than expected and prior months data was adjusted lower.
• 3:49
  SPEAKER_00: The unemployment rate inched higher to 4.2%.
• 3:53
  SPEAKER_00: Even bond traders need to book profits at some point
• 3:57
  SPEAKER_00: and dip buyers finally crawled out from their hiding places and took advantage of
• 4:02
  SPEAKER_00: the data on Friday to buy bonds and drive down interest rates.
• 4:07
  SPEAKER_00: Stocks responded positively to the sound of the door starting to close on
• 4:11
  SPEAKER_00: the probability of a Fed hike later this month And a dip in energy prices brought
• 4:17
  SPEAKER_00: about by the decision of G7 countries to release 100 million barrels of crude oil
• 4:22
  SPEAKER_00: and diesel from their reserve stockpiles to finish nicely in the green
• 4:27
  SPEAKER_00: for this session.
• 4:29
  SPEAKER_00: For the week,
• 4:30
  SPEAKER_00: the S&P 500 and US small caps finished fractionally lower
• 4:34
  SPEAKER_00: and international stocks fell by more, but the NASDAQ 100 moved higher.
• 4:41
  SPEAKER_00: Some other things I'm thinking about.
• 4:43
  SPEAKER_00: Like a chihuahua yapping at a polar bear, U.S.
• 4:47
  SPEAKER_00: Treasury Secretary and Trump sock puppet Scott Besant boasted to the bond market
• 4:52
  SPEAKER_00: on September 9th,
• 4:54
  SPEAKER_00: I am the House now,
• 4:56
  SPEAKER_00: bet against me if you want,
• 4:58
  SPEAKER_00: in an attempt to engineer a reversal of the tide of rising interest rates in order
• 5:03
  SPEAKER_00: to try and boost the President's plummeting approval ratings and
• 5:07
  SPEAKER_00: the Republicans' chances at the midterms.
• 5:10
  SPEAKER_00: Bond traders rolled up their sleeves,
• 5:12
  SPEAKER_00: took him up on his challenge and have completely kicked his ass,
• 5:16
  SPEAKER_00: as they always do with every politician dumb enough to take them on,
• 5:21
  SPEAKER_00: by taking interest rates much higher since then.
• 5:26
  SPEAKER_00: The average 30-year mortgage rate blew through 7.5% last week and the number
• 5:32
  SPEAKER_00: of applications fell by 6% month on month.
• 5:36
  SPEAKER_00: The housing market is grinding to a halt.
• 5:39
  SPEAKER_00: With homeowners with COVID era and other lower rate mortgages more incentivized
• 5:43
  SPEAKER_00: than ever to stay put,
• 5:45
  SPEAKER_00: which is crushing supply and first time buyers still frozen out
• 5:50
  SPEAKER_00: by both spiking mortgage rates and lofty prices, which is impacting demand.
• 5:57
  SPEAKER_00: Skyrocketing interest rates are not just an issue in the US.
• 6:01
  SPEAKER_00: The world's other major economies are having the same problems.