Dear Trader,
The Fed's stuck in a spot nobody wants. S
September brought just 29,000 new jobs, and unemployment crept up to 4.2%. Meanwhile, 10-year and 30-year Treasury yields sit at their highest levels since 2002, and Brent oil's back above $100 a barrel.
A weak jobs report usually gives the Fed room to back off. Oil prices and war borrowing keep inflation pressure on, though, and another rate hike still sits on the table for October.
Andrew Giovinazzi's hosting State of the Market this morning at 10 AM ET, and he's bringing Tim Colby on as his guest. Tim built the Macro Barometer, his sector ETF system that tracks where money rotates as the big economic picture changes. They'll dig into today's stories live.
Grab a coffee and join them. Today's three stories sit below.
This link adds State of the Market to your calendar.
The Daily News Breakdown
SIREN: The US added just 29,000 jobs in September, roughly a third of what economists expected. Unemployment ticked up to 4.2%, and the Labor Department knocked a combined 60,000 jobs off July and August while it had the eraser out.
Paychecks rose 0.1% for the month and 3% over the year, which likely trails inflation. Healthcare did most of the hiring, and even it came in at about half its usual monthly pace.
The Fed's been raising rates to cool inflation. Now it has to decide whether to hike again in October with hiring already running on fumes.
SIGN: Fed Governor Lisa Cook says private credit (loans from investment funds instead of banks) doesn't add much risk to the financial system right now. She also admitted the market's so opaque the Fed had almost no data on it when it started watching, and that it still makes her "sleep with one eye open."
Bank lending commitments to business development companies (the funds behind a lot of these loans) grew from about $10 billion in 2013 to more than $50 billion in 2025. Proposed changes to bank capital rules could push that higher by making these assets cheaper for banks to carry.
I'd feel better about the all-clear if the Fed weren't still working out how tangled up with the banks this money gets.
SNEAKER: Ten-year and 30-year Treasury yields just hit their highest levels since 2002, and Macquarie's Thierry Wizman says the Iran war deserves more of the blame than it gets. Brent's back above $100 a barrel, but Wizman's more worried about the tab.
The Pentagon puts the cost at $43.6 billion and counting, outside researchers think it's a lot higher, and unless Washington raises taxes or cuts elsewhere, all of it gets borrowed. More borrowing means more bonds for sale, and that pushes yields up.
Then the midterms hit on November 3. Trump says he expects the war to wind down after the vote, but he's also floated a big new bombing campaign.