Market News

The U.S. Treasury has auctioned off $22 million and 30 year bonds at a high yield of 5.308%

• WI level at the time of the auction 5.335%
• Tail -2.7 basis points versus 013 basis points average
• Bid to cover 2.61X versus average of 2.38X
• DIrects (domestic buyers) 18.3% versus 22.1% average
• Indirects (international buyers) 79.5% versus 66.4% average
• Dealers (they get the rest) 2.2% versus 11.5% average.

I don't think I've ever seen a dealer number as low as 2.2%. The big buyer was international at 79.5%. I wonder if the bond buyback influenced the buying interest today. Of course the US yield are near the highs going back to 2007.   Yields have come off a bit.  US stocks are still down but near the highs.  Crude oil is off $102.60 spike high but still…

Crude oil futures continue to search the upside with the October contract currently trading just short of $102 at $101.92. That's up 6.07%. Brent crude oil is also sharply higher by $6.03 or 5.96% at $107.23.

The gain today is the largest since August 10. It is a large gain since August 10.

The fundamental storyline behind the surge in crude oil remains centered on growing supply concerns from the Middle East. It got an added boost with a report from the WSJ that Iran is reportedly producing ballistic missiles again.

Attacks on oil tankers have increased, while the Iran-backed Houthis have seized Yemen’s port of Mocha, putting them closer to the strategically important Bab el-Mandeb shipping route. Combined with continued threats…

The EURUSD moved lower following the stronger-than-expected U.S. PPI data, but the sellers could not extend the decline through the next key target area. The low reached 1.1593, stopping short of the swing level at 1.15849 (see red numbered circles on the chart below) before buyers stepped back in.

The rebound was also supported by the ECB’s decision to raise interest rates by 25 basis points. Subsequently, sources indicated that another rate hike could be considered as soon as October. That potentially more hawkish path helped the euro recover from its post-PPI decline. What did not push the USD lower was lower rates. The 10 year yield is still up 8.5 basis points at 4.922%. The two-year is up 11.2 basis points at 4.539%. Crude oil prices…

• Prior was -4450K
• Gasoline +1269K vs -1373K exp
• Distillates +2087K vs -720K exp

WTI isn't slowing down as crude is now up $5.44 to $101.52. It's trading like genuine shortages are coming.

The S&P and Nasdaq indices are both finding buyers against key support, but the rebounds still have work to do before the technical bias turns more bullish.

For the S&P index, buyers are leaning against the swing area between 7577.92 and 7636.33. This area previously acted as a ceiling and is now being tested as a floor, making it the key risk-defining area. Stay above—and especially move back above 7636.33—and the buyers remain in the game. However, they still need to reclaim the 100-hour moving average at 7681.09 and the 200-hour moving average at 7694.73 to take back more control. A move below the 7577.92 would weaken the technical structure and give sellers more confidence to potentially make a run toward the rising 100 day MA at…

• Prior was 4.06m (unrevised)
• Existing home sales -2.0% vs -1.7% prior

We're into the final gasp of the year for real estate and with rates rising at the moment, there's no help coming. It's going to end as another poor year in the housing market and I don't think there is much optimism for 2027 at the moment.

The price of bitcoin is moving lower with the current price trading down -$1300 or 1.64% at $77012. The move lower comes after buyers ran out of steam near resistance targets. 

Technically, looking at the 4 hour chart above, the Bitcoin buyers had their shot on the move higher off of the end of June low, but the rally stalled at $82,281 last Friday. That high was within the $80,560 to $82,833 swing area but getting above the 38.2% retracement ahead of the 38.2% retracement of the move down from the all-time high reached in October at $83,916. Getting above the 38.2% retracement is a minimum target for buyers if they are to take more control. Instead sellers leaned against that resistance zone/retracement level, where risk could be defined…

Is the oil market sniffing out a TACO?

WTI hit $100 today for the first time since May and remains up $3.44 at $99.49 but oil stocks aren't cheering. Notably, the strength in oil extends out the curve with January crude also up $2. Despite that, the XLE oil company ETF is down 1.1% in a reversal since the open.

Now that could just be your garden variety profit taking but it's an prominent candle on a chart that's been one-way for awhile. Exxon and Chevron are both negative on the day, mirroring in the XLE.

The thinking could be that $100 oil is the red line for Trump and that he sees which way the wind is blowing on the midterms. He launched something of a Hail Mary yesterday with a promise of $5000 checks to Americans but he promised that…

U.S. wholesale inventories increased strongly in July, while sales rebounded following June’s decline. Inventories grew faster than sales during the month, pushing the inventories-to-sales ratio modestly higher.

Wholesale inventories

• July inventories: $958.9 billion

• Month over month: +1.3% versus 1.3% expected

• Year over year: +5.7%

• The monthly increase was unrevised from the advance estimate

The 1.3% rise in inventories was relatively strong. That could indicate wholesalers are rebuilding stocks in anticipation of future demand. However, if inventories continue rising faster than sales, it could also suggest that goods are beginning to accumulate in warehouses.

Wholesale sales

• July sales: $801.3 billion

• Month over month: +0.8% versus -2.9% last…

Headlines:

• Oil prices above $100 continue to lift bond yields as inflation fears grow
• European stocks edge higher as investors brace for ECB decision
• Stock movers today: Meta leads AI optimism while ServiceTitan and Navan show the cost of missing expectations
• Oracle earnings preview: AI spending, cloud growth and a $638 billion backlog in focus
• EUR/USD almost erased Warsh-driven selloff ahead of the ECB decision. What to watch next?
• ECB preview: what is expected, what is priced in and what could surprise
• ECB preview: What major banks and analysts expect from Lagarde and interest rates
• Germany August CPI: Energy shock keeps inflation pressures elevated

Markets:

• Brent crude oil up 1.2% to $102.41
• WTI crude oil up 1.5% to $97.46
• US 10-year yields up 4…

The USD is higher against all the major currencies as North American traders enter for the day. The greenback’s largest gain is against the JPY, rising 0.36%, followed by gains of 0.16% versus the CHF and 0.12% versus the CAD.

The dollar’s move comes as Treasury yields push higher ahead of today’s key U.S. PPI report. That will be followed by the CPI tomorrow, with both reports helping to shape expectations ahead of next week’s Federal Reserve decision.

Meanwhile, the EUR is modestly lower ahead of the ECB rate decision at 8:15 AM ET (see a preview HERE). The central bank is expected to raise its refinancing rate by 25 basis points to 2.65% from 2.40%.

In the Kickstart video, I take a technical look at the EURUSD, USDJPY and GBPUSD,…

Key takeaways for Apple investors

• A new reason to upgrade: The iPhone Duo could appeal to customers who have held onto older phones.
• Revenue share is not extra growth: A foldable accounting for 10% of iPhone revenue would include purchases that replace other iPhone sales.
• AI needs to earn its place: Useful everyday features could support demand, but adoption and availability matter more than demonstrations.
• Watch profitability: Higher selling prices do not automatically mean higher profit margins.

Why could the foldable iPhone matter for Apple stock?

Apple unveiled the iPhone Duo on September 9, starting at $1,999 in the U.S., with availability from October 23. Its larger inner display supports using apps side by side. Apple’s…