Commodities

Nominal and real yields have risen, creating some of the most attractive opportunities investors have seen in fixed income in several years. A resilient economy, higher oil prices, sticky inflation and growing worry about the deficit have all contributed to higher yields across much of the bond market.

The employment report was extraordinarily strong, with approximately 165,000 jobs created, well above expectations, and upward revisions of 84,000 for the previous two months. Almost all the gains were in the private sector, with manufacturing adding 19,000 jobs.

If you’re considering changing firms in 2027, use the remainder of 2026 to establish readiness and explore a rapidly shifting economic and geopolitical landscape. Before committing, review your restrictions, confirm client-data boundaries, assess account portability, compare the economics, and determine what your next business model requires.

Tuesday’s midterms were one for the history books. Democrats won control of both the House and Senate, and they picked up governorships in Ohio, Texas and Georgia. Kansas elected a Democrat to the Senate for the first time since 1932. Our home state of Texas did so for the first time in 38 years.

Our investment teams weigh what comes next for stocks, bonds, and AI to help you explain what may come next.

Election Day delivered a decisive shift in the political landscape. Democrats regained control of both the House and Senate and captured several key governorships. Affordability concerns, unease about the economy and dissatisfaction with the war in Iran all played a role, consistent with polling heading into the vote.

I try not to write about politics in this letter. I’d rather focus on economics and investments. But this week, politics impacts economics so we need to address it. Let me see if I can express what I think many voters were feeling.

The most important number in October’s inflation reports wasn’t the one that made the headlines. Everyone watched the Consumer Price Index print 3.7%. Far fewer noticed the Producer Price Index for final demand. It jumped 1.3% in a single month, the largest gain since March 2022, and the annual rate hit 6.3%.

A global tech rout continues to remind investors that volatility can strike at any time. That’s especially true in today’s market environment, where stretched megacap technology valuations and broader equity indices have elevated concentration risk.

Domestic demand for gold bars and coins tends to rise modestly under Democratic administrations. However, elections have not historically had a significant impact on gold’s global performance over the long haul.

Franklin Templeton Institute’s Stephen Dover and Larry Hatheway opine on the US stock market’s recent volatility in the wake of the US midterm elections and the path forward for investors.

Traditionally speaking, when one is choosing to lean into a particular sector of the equity market, they’re going to want to lean into the one that’s offering the best performance.

The big story last week? The Federal Reserve paused despite stronger growth and persistent inflation. It was a hawkish pause, with a December hike still the base case, according to Franklin Templeton Fixed Income. Third-quarter gross domestic product showed the US economy's resilience, but also its growing dependence on artificial intelligence investment, and household purchasing power took a hit.

Democrats won control of both the House and Senate in Tuesday’s midterm elections, according to The Associated Press. The results set up a divided government for the final two years of President Donald Trump’s term. This could have repercussions when it comes to healthcare stocks.

Investors are grappling with an evolving set of risks as 2026 draws to a close. The scale of the AI build-out is influencing more sectors and industries. Rising interest rates are reshaping market dynamics as inflation threats linger.

A stock trading at half its former price is not necessarily a bargain. Perhaps its earnings power has halved or its balance sheet can no longer support the business. Maybe its generous dividend is being financed with borrowed money. A low valuation ratio tells us what we are paying relative to one measure of fundamentals. It does not, by itself, tell us what the business is worth or whether those fundamentals will endure.

The 2026 midterms may have changed Washington, but they haven’t changed the macro regime. Tariffs, geopolitics, and deficits remain key forces for investors.

The votes have been cast. While control of the House and Senate has been decided, now we wait for the final tallies (and celebrate the end of the political ads — at least for another 20 months or so). We’re not political strategists, but policy does move markets, so it’s important to pay attention.

Amid a rapidly changing world, where China’s rise as an industrial powerhouse has nations around the globe on alert, we believe that American reindustrialization will be an important driver of investment returns in the decade ahead. 

If history is any indication, when push comes to shove, the Fed will ultimately choose more easy money despite elevated inflation to support the markets and the broader economy.

October reminded investors that markets rarely move in response to a single factor. The US economy continued to expand at a moderate pace, supported by healthy consumer spending and solid business activity, even as markets contended with higher energy prices, renewed inflation concerns and heightened geopolitical tensions.

Following U.S. midterm results, Paul Eitelman, Chief Investment Strategist, Russell Investments, shares the potential implications for markets and the data center rollout. Views are as of 10:00 am Eastern Time on November 4, 2026.

Notwithstanding that the major U.S. equity indexes are sitting on healthy double-digit gains heading into the final two months of 2026, the calm at the index level belies a lot of churn and rotation underneath.

Equity markets are caught between tighter liquidity conditions and increased geopolitical uncertainty on the one hand, and solid economic growth and corporate earnings on the other. We have consequently reduced our exposure to stocks leading into year end.

As investor interest in Anthropic’s upcoming IPO grows, ETFs are finding new ways to offer exposure to private companies through derivatives tied to perpetual futures. Recent regulatory developments could accelerate the use of these instruments across the ETF industry, but they also introduce new risks and complexities.

Fixed income ETFs shattered all-time records in October, amassing an unprecedented $74 billion in monthly net inflows. The milestone marked a record sixth consecutive month with more than $50 billion in allocations. This streak never occurred in the industry prior to this year.

Sometimes the best lessons are the simplest ones, and right now, the market is offering a good old-fashioned lesson on the benefits of diversification. Stay invested, stay diversified, and stick to your financial plan.

We expect the rotation to continue. The earnings bar is high—very high. Any minor misstep has led to punishment, which has led to rotation. Rotation is not a bad thing, and if you are running a diversified equity portfolio, you should be in good shape.

The Federal Reserve meeting last week was largely uneventful. The S&P 500 and the 10-year Treasury yield ending the trading session almost exactly where they stood before the Fed’s announcements. Despite some disagreements within the Fed, there was virtually no forward guidance.

The broad markets experienced volatility in the 3rd quarter with concerns over the impact of energy prices on inflation as well as CapEx spending by hyperscaler companies in the AI space driving technology stocks. The price of WTI Crude oil rallied sharply during the quarter by nearly 30%.

A few years back, I compared two island-nations whose leaders came to power in 1959. At the time, Cuba was by far the wealthier of the two—rich in sugar, tobacco and tourism—while Singapore was a sleepy former colonial outpost with almost no natural resources.

As the days grow shorter and the nights longer, Americans will turn their clocks back, shifting from daylight saving time to standard time. But the clocks won’t be the only thing changing. Americans will also head to the polls, with the potential to reshape Congress in the 2026 midterm elections.

With the one constant being that gold fell again, this time by 6.6%, October’s price action is a mirror image of what happened in markets in September. In September, tech and momentum led the charge higher, with anything value- or rate-related leading the selloff. October was the exact opposite.

The stock market doesn’t wait for GDP. The ratio of consumer discretionary stocks to consumer staples has fallen about 19% from its late-2025 peak, suggesting the so-called “smart money” has been quietly moving out of what people want and into what people need for most of this year.⁵

Credit problems in the AI space are not going to be contained to just the AI space. It is going to have impacts all throughout the economy and global markets. I guarantee you central banks are paying attention as it is affecting what they have to charge for sovereign debt.

Rising U.S. Treasury yields have added fresh strain to the U.S. housing market. The average 30-year mortgage rate, which generally tracks the 10-year U.S. Treasury yield plus a mortgage spread, rose to 7.5% in October 2026, according to Mortgage Bankers Association data, worsening an affordability crunch that remains a top concern among U.S. households.

Large-cap stocks may be better built for 5% Treasury yields than their smaller rivals, according to State Street Investment Management’s quarterly outlook. The 10-year yield climbed 0.81 percentage points last quarter to 5.28%, a near 20-year high.

Infrastructure has long been valued for its defensive characteristics, income potential and ability to protect against inflation. Essential assets such as electricity networks, pipelines, railways, airports and toll roads typically benefit from high barriers to entry and predictable revenues.

Today I want to tell you about the city of Shenzhen. Unless you are in global manufacturing, you may not have heard of this Chinese city of 18 million people. As recently as 1979, the area had only 30,000 residents, living in small fishing villages. Today, it is one of the most modern cities in the world. It is also quite wealthy.

The Fed held rates steady at its October meeting but kept the door open to further tightening, with two dissenting votes and hawkish rhetoric signaling that the pause is a skip, not a stop.

In this episode of the Money Metals Midweek Memo, host Mike Maharrey considers how artificial intelligence could affect trust, cybersecurity, and investors’ access to their money. He also discusses silver’s sharp correction, the long history of gold jewelry, and ways listeners might use precious metals as a physical store of value.

The economy appears to be settling into a new equilibrium. Economic growth has moderated to a sustainable pace. While inflation has picked up over the last few months, there does not seem to be a fundamental shift in the underlying trend.