Market Indicators

One of the hallmarks for the U.S. economy over the last few years has been its resiliency. This calendar year has been no exception as the war in the Middle East led many a market prognosticator to pencil in the potential for a recession stemming from the effects of the Middle East war.

In a week marked by continued concerns about rising interest rates, the bond market found some relief after two large Treasury auctions of 10- and 30-year securities were well received by investors. The week’s most significant development came Thursday, when questions emerged about OpenAI’s revenue. Reports suggested revenue was running at a $50 billion annual pace, well below the $70 billion investors had expected.

Every time I clean out my wardrobe, I find items I have not worn in years but cannot quite bring myself to give away. Maybe they will come back into fashion. Maybe they’ll fit again one day. Or maybe getting rid of them simply feels harder than buying them did.

Sound and stable money promotes long-term economic growth. And “independent” central banks are more likely to deliver it. For most of the 1800s, the US was on the gold standard, which meant policy was insulated from political interference. But once the Federal Reserve was created in 1913, it became susceptible to political pressures.

Global equity markets finished the third quarter only modestly higher, but the path beneath the surface was anything but calm. The AI and momentum trade that powered markets in the first half unwound sharply in July, leadership broadened through August as capital returned to areas that had been left behind, and the market narrowed again in September.

Bank lending rarely commands the attention that payrolls, inflation or consumer spending do. But it helps determine how much momentum the economy can sustain. The Role of C&I Loans: Commercial and industrial (C&I) loans, the workhorse of corporate finance, pay for everything from working capital to machinery and software.

With the 10-year Treasury yield at its highest level since 2002, buying bonds at 5% is the first real alternative that stock investors have had in nearly two decades.

Our Senior Portfolio Manager and Head of Global Sustainable Investing, Kris Nelson, sees markets balancing several competing forces this week, from renewed oil-price volatility to softer labor data and increasingly demanding expectations around AI earnings.

Taylor Topousis and Christian Galipeau discuss high-conviction insights that go beyond media headlines.

Earlier last week, a supertanker loading crude in the Gulf of Oman was fixed at $1.01 million a day for a voyage to Asia, with another deal reportedly agreed at $1.16 million.

By generation, Gen Z and Millennials now make up 88% of online betting activity. Gen X trails at 9%. Boomers barely register. As recently as this spring, Millennials were the bigger group. Then Gen Z passed them, and Bank of America called it a “turning point.”

For insurance investors, bond yields play a defining role in long-term planning, with the effects of their levels and movements rippling across balance sheets. Liabilities may move inversely to asset values, and today’s investment decisions have implications far into the future. That makes bond yields critical variables for prudent insurance investors. There are also insights in the “why” behind higher rates.

The S&P 500 hit a new record high in 3Q as strong earnings offset headwinds from oil returning to $100/bbl, the Fed hiking rates, and the 10-year Treasury crossing 5%.

Headlines are popping up left and right about how high the 10-year Treasury yield has risen. While investors make decisions about what is the “right” longer-term cost of government debt, many journalists focus on single-factor ways of viewing it.

In 1954, golfer Tommy Bolt won the inaugural Rubber City Open at Firestone Country Club in Akron. Four years later, he returned to Akron as the reigning US Open champion, where in the third round he was paired with an 18-year-old amateur making his tour debut.

The U.S. economy is handing investors a muddled picture. Housing is stuck, hiring is lopsided, and households feel worse than the jobs data suggest. Add a string of geopolitical shocks and a Federal Reserve (Fed) under new leadership still establishing its reaction function, and the signals markets rely on are harder to read. Investors will have to adjust to this market, where clarity is scarce.

ClearBridge Investments: With the economy still resilient, a gradual Federal Reserve hiking cycle could help broaden market leadership beyond the Magnificent Seven.

Stocks chopped this summer as high hopes for AI product and infrastructure development were offset by rising inflation and an increasingly hawkish Federal Reserve.

Yet gold and silver have been falling as traders seek refuge in the dollar and demand higher interest rates on U.S. government debt.

The U.S. economy remained resilient in Q3, with 2.2% real GDP growth, 4.1% unemployment, and inflation easing to 3.4%. Rising interest rates reflect persistent inflation concerns. The AI boom continues despite growing skepticism, while tariff uncertainty persists. The Iran war remains unresolved, supporting higher oil-price risks. Muhlenkamp added oil, software, and animal-health investments at attractive valuations.

After a nine-month rally in equity markets and a recent spike in bond yields, some investors may see fit to reduce their exposure to stocks. On the surface at least, bonds appear to offer better value than equities. The gap between stocks' earnings yields, the inverse of the price-to-earnings ratio, and bond yields is narrower than it has been in two decades.

AI's labor-market impact remains limited but uneven, as productivity and profits outpace hiring and import-heavy investment dampens U.S. job growth.

As globalization recedes, governments and businesses have stronger incentives to invest in building more resilient societies and supply chains. That imperative has coincided with the emergence of artificial intelligence, creating a powerful interaction between technological innovation and economic security.

Market participants have been conditioned to expect clear Forward Guidance from Fed Chairs and Ben Bernanke, Janet Yellen, and Jay Powell provided it continuously, especially after the Financial Crisis. Chairman Warsh has made it clear that Forward Guidance will be less under his leadership, but he has offered a very important qualifier that many have yet to grasp.

Inflation progress remains uneven: The latest Personal Consumption Expenditures Price Index showed some improvement after revisions, but several measures suggest price pressures remain sticky and above the Federal Reserve’s target

Only one month ago the big story about the US economy was how strong it was. The August jobs report, which arrived in early September, showed that payrolls were up 162,000 for the month. Meanwhile, at one point the Atlanta Fed’s “GDP Now” model was estimating real GDP would grow more than 5% at an annual rate in the third quarter.

Seven months into the U.S.–Iran conflict, few historical analogues have held. The trajectory of oil prices has been consistent with previous geopolitical shocks, but the market response elsewhere has looked strikingly different. U.S. Treasury yields have moved notably higher, for example, while credit spreads have remained remarkably resilient.

This year has marked another remarkable chapter for the global economy and financial markets. Investors have navigated no shortage of challenges, from geopolitical conflicts and trade tensions to elevated energy prices and shifting interest rate expectations. Yet despite these headwinds, the economy continues to expand, corporate earnings remain resilient and markets have steadily climbed the proverbial wall of worry.

The latest employment report was softer on the headline numbers, but I thought the underlying details were quite constructive. Payroll growth came in below expectations and the prior two months were revised downward, yet labor-force participation increased and the workweek stabilized rather than declining as expected.

We understand that you can’t forecast the sequence of returns, but we CAN build a plan that survives a bad one. As Howard Marks puts it, you can’t predict, but you can prepare. These are the rules of engagement once you’ve crossed from saving into spending.

If you only looked at the price of gold in September, you’d be forgiven for believing the bull market had run out of steam. The yellow metal fell 6.3% during the month, and some in the financial press were quick to say it had failed as a safe haven.

Today’s employment report reinforced a trend that has been evident across several labor market indicators: conditions in the goods-producing sector continue to improve after several difficult years, while hiring across the much larger service sector continues to soften.

Societal angst about AI continues to grow. Whether it’s concern about misalignment or potentially misdirected investment, the AI-may-be-bad narrative is gaining traction. In stark contrast, the AI trade in financial markets was alive and well in September of 2026.

Vigilante movies have always been popular with audiences. From Clint Eastwood (Dirty Harry) to Halle Berry (Catwoman) to Denzel Washington (The Equalizer), characters that take justice into their own hands when systems fail are seen as heroes.

Our real gross domestic product (GDP) forecast for 2026 is 2.5% (based on our Global Investment Management Survey) versus the Federal Reserve’s (Fed's) forecast of 2.2% and the Wall Street consensus of around 2%.

Executives enter the earnings season with a bit of a swagger. They won't say it out loud, of course, but consider all the headwinds CEOs of companies big and small have faced in the last few years. First, it was imminent recession fears; then it was looming tariffs (followed by the shock of April 2025).

September’s fixed income sell-off marked a watershed moment for muni bond markets, delivering the steepest drawdown since the 2008 Great Financial Crisis. As benchmark yields spiked, prices across muni ETFs fell in tandem, and the volatility has not let up. This week, both 10-year and 30-year Treasury yields climbed to their highest levels since 2002.

The bond market took center stage through September with inflation, oil supply chains and the Federal Reserve performing as an ensemble.

Neither a borrower nor a lender be,” wrote William Shakespeare, who was one of history’s greatest authors but obviously ill-versed in economics. Without lending or borrowing, our modern economic society wouldn’t grow very much, AI or not.

Market participants have been conditioned to expect clear Forward Guidance from Fed Chairs. Chairman Warsh has made it clear that Forward Guidance will be less under his leadership, but he has offered a very important qualifier that many have yet to grasp.

Today, we’re going to look at a lot of various data points and analysis, that when taken together give us a much clearer picture of the total world.

The sell-off in U.S. Treasury (UST) yields has continued pretty much in an unabated fashion In fact, multi-year high watermarks are being achieved throughout the fixed coupon maturity curve. The most widely followed development was the UST 10-year yield rising to its highest level since 2007.

Markets await a possible Fed rate hike as Congress weighs Trump's dividend proposal, a limited fall session, and a Senate vote on crypto regulation.

AI could be a transformative force for the Fed’s policy framework. Elevated investment demand – now coupled with positive wealth effects that are necessitating tighter financial conditions – could eventually give way to a positive supply impact from higher productivity growth that could allow for easier financial conditions without inflationary implications.