1. Rates & cost of capital
| Treasury | Close | Day | 5 sessions | Prior |
|---|---|---|---|---|
| 2Y | 4.77% | −2 bp | −11 bp | 4.79% |
| 5Y | 5.03% | 0 bp | −6 bp | 5.03% |
| 10Y | 5.28% | +1 bp | −1 bp | 5.27% |
| 30Y | 5.67% | +3 bp | +3 bp | 5.64% |
| 10Y real (TIPS) | 2.92% | +1 bp | −1 bp | 2.91% |
| 10Y breakeven | 2.36% | 0 bp | — | 2.36% |
| 2s10s | 51 bp | +3 bp | — | 48 bp |
The curve steepened from both ends: lower at two years, higher at thirty. The breakeven was unchanged, so the rise in the 10-year was in the real yield. The 10-year auction cleared at 5.300% against 5.317% when-issued, with indirect bidders taking 80.34% and dealers 2.54% (Investrade) — solid demand at these levels. Over five sessions the 10-year is 1 bp lower, so that component stays at zero; the 2.92% real yield remains above the 2.75% threshold (−2).
2. Fed
Target range 3.75–4.00% (since Sep 17; Sep 16 decision, +25 bp). Minutes of the Sep 15–16 meeting: the hike was unanimous, but participants differed on the rationale — some saw it as containing energy and other price shocks, a more hawkish group as a response to demand-driven inflation (Investrade). According to TheStreet's summary, the Fed anticipates another hike before year-end, with timing (Oct 28 or Dec 9) left open and decisions data-dependent. Market-implied path for the next three meetings: n/a (CME 30-Day Fed Funds settlement is blocked from the cloud, HTTP 403); the component is excluded from the scorecard. Next: Governor Waller on the economic outlook Oct 8 at 4:30 a.m. ET; FOMC decision Oct 28.
3. Valuation & equity risk premium
S&P 500 forward P/E 19.0 (FactSet, Sep 30 prices), below the 5-year average (19.8) and near the 10-year average (19.1); forward earnings yield 5.26%. ERP = EY − 10Y = −0.02 pp (prior −0.01); EY − real 10Y = 2.34 pp (prior 2.35). Nasdaq-100 forward P/E: n/a (no verified source). FactSet publishes its next edition on Oct 9. Equities again yield slightly less than the 10-year — the component stays at −1.
4. Earnings
FactSet (Oct 2): expected S&P 500 earnings growth Q3 2026 +29.5%, Q4 +27.6%, CY2026 +32.4%, CY2027 +15.8%. Four-week NTM EPS revision +1.30% (forward EPS +9.3% since Jun 30 vs +7.9% in the Sep 4 edition). Q3 guidance: 44 negative, 72 positive. With 16 companies reported, 14 beat on EPS and 12 on revenue. LSEG puts expected Q3 growth at 30.6%, led by energy and technology (via Investrade). Nasdaq-100 aggregate revisions: n/a. Revisions remain the main offset on the scorecard (+2); the season proper starts with JPMorgan on Oct 13.
5. Credit
FRED, as of Oct 6: HY OAS 303 bp (−9 on the day, −5 over 5 sessions, +36 over 20); IG OAS 83 bp (−1, −1, +2). FRED publishes with a lag; the Oct 7 value will follow. HY spreads tightened on the record day, but the 20-session widening keeps the component at −1.
6. Commodities & dollar
Oil settlement for Oct 7: not verified against CME/ICE; Investrade reports WTI $88.28 (−$1.16, −1.3%) and Brent $100.20 (−$0.38). For the scorecard, EIA spot via FRED as of Oct 6: Brent $125.44, +18.21% over 20 sessions; WTI $96.24, +2.15%. The FRED Brent series is the dated physical spot price and sits well above the futures reported in the media — different instruments, no substitution. The update from Sep 29 to Oct 6 lowered the 20-session Brent change from +26.97% to +18.21%, still above +15% (−2). DXY: n/a (no verified close; no substitute index). Gold fell 1.11% to a two-month low (Investrade).
7. Macro data
| Release | Actual | Consensus | Prior | Surprise |
|---|---|---|---|---|
| 10-year auction, $39bn | 5.300%, BTC 2.77 | WI 5.317% | n/a | 1.7 bp stop-through |
| Consumer credit (Aug) | n/a | n/a | n/a | n/a |
No verified results for consumer credit, DOE inventories or MBA applications. The auction was the session's data point for rates.
8. Corporate events
AMZN (+1.42%), AAPL (+0.91%) and Alphabet (+0.81%) led the NDX top 10; META (−2.38%) and SPCX (−2.51%) lagged. Refiners (VLO, MPC, PBF, CVI) hit record highs; banks, precious-metal miners, housing and high-dividend sectors lagged; PepsiCo hit a 52-week low ahead of earnings; Moderna and Merck rose on a Tempus collaboration (Investrade). Indices: S&P 500 −0.22%, Nasdaq Composite −0.22%, Dow −0.66% — the S&P 500 and Dow ended five-day winning streaks — Russell 2000 −1.31%.
9. Week ahead (ET)
| Date | Time | Event |
|---|---|---|
| Oct 8 | 4:30 a.m. | Governor Waller: economic outlook (Istanbul) |
| Oct 8 | before open | PepsiCo (PEP) |
| Oct 8 | 8:30 a.m. | Initial jobless claims |
| Oct 8 | 10:00 a.m. | Wholesale inventories (Aug) |
| Oct 8 | 1:00 p.m. | 30-year Treasury auction, $22bn |
| Oct 9 | before open | Delta Air Lines (DAL) |
| Oct 9 | 10:00 a.m. | University of Michigan sentiment and inflation expectations (prelim.); weekly expiration |
| Oct 12 | — | Columbus Day: bond market closed, equities open |
| Oct 13 | before open | JPMorgan Chase (JPM) — bank earnings season begins |
| Oct 14 | 8:30 a.m. | CPI (Sep) |
| Oct 14 | 2:00 p.m. | Beige Book |
| Component | Reading | Score |
|---|---|---|
| ERP (EY − 10Y), pp | −0.02 | −1 |
| 10Y real yield, % | 2.92 | −2 |
| 10Y change over 5 sessions, bp | −1 | 0 |
| NTM EPS revision, 4 weeks | +1.30% | +2 |
| HY OAS over 20 sessions, bp (Oct 6) | +36 | −1 |
| Fed path, next 3 meetings, bp | n/a | — |
| Brent over 20 sessions (Oct 6) | +18.21% | −2 |
| Total | −4 → Moderately Unfavorable |
What Would Change the Regime
- If the 10-year rises more than 5 bp over five sessions, then that component turns −1 and the total falls to −5.
- If the 20-session Brent change falls to between +5% and +15%, then the oil component improves to −1 and the total to −3.
- If the 10-year real yield falls below 2.75%, then that component improves to −1 and the total to −3.
- If HY OAS widens more than 75 bp over 20 sessions, then the credit component falls to −2 and the total to −5.
Sources
- U.S. Treasury — nominal and real yield curves (Oct 7, Oct 6, Sep 30)
- FRED — HY/IG OAS (BAMLH0A0HYM2, BAMLC0A0CM), Brent/WTI (DCOILBRENTEU, DCOILWTICO), fed funds target range
- FactSet Earnings Insight, Oct 2, 2026 and Sep 4, 2026 — P/E, earnings growth, revisions
- Investrade market review, Oct 7 — 10-year auction, FOMC minutes, oil, sectors
- TheStreet, Oct 7 — indices, FOMC minutes summary
- Federal Reserve calendar; Investrade weekly calendar; FinanceCalendar; JPMorgan Chase (via Finviz)
This report describes market conditions and is not investment advice.