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This Week on Wall Street |
| Week of September 21, 2026 |
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| The meetings that matter most this week are diplomatic. The General Debate of the United Nations General Assembly convenes Tuesday in New York, with the war between the United States and Iran and the regional proxies it has drawn in dominating the agenda. Crude has spent four sessions giving back risk premium on expectations that a path toward de-escalation surfaces during high-level week, with Brent slipping toward $100 after trading above $105 earlier this month. The counterweight arrived over the weekend, when Saudi Arabia issued air-raid alerts for Riyadh for the first time since the spring, along with warnings for Red Sea port hubs. The Strait of Hormuz remains effectively shut either way, so the physical supply constraint does not turn on the tone of the talks. President Trump hosts Xi Jinping in Washington on Thursday, their second meeting this year, with the governance of artificial intelligence expected to sit alongside trade on the agenda. Neither event produces a figure markets can price, and both can set the direction for the week. |
| The question in the rates market is no longer whether policy tightens but how quickly. The Fed lifted its target range a quarter point last week, and the projections released alongside the decision did more work than the decision itself, with nearly every participant now penciling in at least one further increase before year end. The repricing that followed concentrated in short maturities, where the policy signal lives, while the ten-year held right around 5%. The gap between two-year and ten-year yields has narrowed accordingly. What the market does not yet have is evidence on how the economy absorbs a higher cost of money, and this week offers only glancing looks at it. Thursday brings jobless claims, which have stayed low without much hiring behind them. Friday brings the final September read on consumer sentiment, where the preliminary survey showed year-ahead inflation expectations moving higher. Expectations tend to feed into wage and pricing behavior over time, so a confirmation there would read as more than a sentiment wobble. |
| Underneath the rates story sits a market that has barely moved. The extra yield investors require to hold speculative-grade corporate debt rather than Treasuries stood near 2.8 percentage points in mid-September, against a long-run median closer to 4.5. Credit has held near the tight end of its range through an oil shock, a closed shipping chokepoint and the opening of a tightening cycle. Some of that is arithmetic, since all-in borrowing costs have risen with government yields even with the risk premium unchanged. Some of it is demand, with investors still willing to fund below-investment-grade issuers at slim concessions. The reason it matters is transmission. Policy is meant to work partly by making credit dearer and harder to come by, and spreads this narrow suggest that channel is not yet carrying much of the load, a point Fed officials have made in describing financial conditions as loose. Credit has also tended to move ahead of equities, which makes it a useful place to watch for a first sign that higher rates are biting. |
S&P 500 Performance at the Start of a Tightening Cycle |
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| Across the six cycles since 1994, the index was lower one month after the first hike in five of six cases, and still lower three months in. Five of the six were higher at the one-year mark, with 1997 the outlier on the upside and 2022 the only cycle negative a year out. Values are read from the published series and are approximate. |
| Source: LPL Financial, via The Daily Shot |
Economic Releases This Week |
| Monday | None |
| Tuesday | None |
| Wednesday | Manufacturing and Services PMI (Flash) |
| Thursday | Initial Jobless Claims, New Home Sales |
| Friday | Consumer Sentiment (Final) |
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Stories to Start the Week |
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What is Newton? |
| Our Newton model determines the highest probability of future price direction using advanced algorithmic and high-order mathematical techniques on the current market environment. It scores securities over multiple time periods on a 0–20 scale (0 worst, 20 best). Trend and level both matter. A name moving from 18 to 16 still signals a strong level, with slight exhaustion in the trend. ▼ 0–8 declining ▬ 9–13 neutral ▲ 14–20 strong |
| Equities | Trend | This Wk | Last Wk | | Large Cap | ▲ | 14 | 13 | | Emerging Markets | ▬ | 12 | 11 | | Mid Cap | ▬ | 10 | 13 | | Small Cap | ▼ | 8 | 8 | | Foreign Developed | ▼ | 7 | 9 |
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| Fixed Income | Trend | This Wk | Last Wk | | Floating Rate Bond | ▬ | 12 | 8 | | Long-Term Bond | ▬ | 9 | 4 | | High Yield Bond | ▼ | 8 | 5 | | Corporate Bond | ▼ | 7 | 6 | | Short Term Bond | ▼ | 7 | 4 | | Intermediate Term Bond | ▼ | 7 | 4 |
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| Sectors | Trend | This Wk | Last Wk | | Communications | ▲ | 14 | 14 | | Health Care | ▬ | 13 | 5 | | Technology | ▬ | 12 | 11 | | Materials | ▬ | 11 | 7 | | Consumer Cyclical | ▬ | 9 | 10 | | Consumer Defensive | ▼ | 8 | 4 | | Financials | ▼ | 7 | 12 | | Real Estate | ▼ | 7 | 6 | | Industrials | ▼ | 5 | 6 | | Energy | ▼ | 4 | 9 | | Utilities | ▼ | 0 | 6 |
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| Market Segments | Trend | This Wk | Last Wk | | Large Growth | ▲ | 14 | 13 | | Large Value | ▬ | 9 | 9 | | Small Growth | ▼ | 8 | 10 | | Mid-Cap Growth | ▼ | 7 | 9 | | Small Value | ▼ | 6 | 11 | | Mid-Cap Value | ▼ | 6 | 8 |
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Notable Newton Moves This Week: Readings improved at the top of the equity table, with Large Cap and Large Growth both moving into the strong band at 14. Fixed income firmed from low levels across the board, Floating Rate Bond to 12 from 8 and Long-Term Bond to 9 from 4, though four of the six categories remain in the declining band. Health Care was the largest single move anywhere in the model, jumping to 13 from 5, with Materials also up to 11 from 7. The declines were concentrated in rate-sensitive and cyclical reads, Utilities falling to 0 from 6, Financials to 7 from 12 and Energy to 4 from 9, while Small Value slid to 6 from 11. |
Technical trading models are mathematically driven based upon historical data and trends of domestic and foreign market trading activity, including various industry and sector trading statistics within such markets. Technical trading models, through mathematical algorithms, attempt to identify when markets are likely to increase or decrease and identify appropriate entry and exit points. The primary risk of technical trading models is that historical trends and past performance cannot predict future trends and there is no assurance that the mathematical algorithms employed are designed properly, updated with new data, and can accurately predict future market, industry and sector performance.
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