A two-month tariff truce took the headlines yesterday while the five-year Treasury printed 5 percent for the first time since 2007. Good morning and welcome to today's market chronicle. It's Thursday, September 24, 2026.
The trouble started with a good number. S&P Global's flash survey showed private-sector activity at its fastest in more than five years, hiring at its quickest since 2022, and prices rising on both sides of the economy. Stocks fell anyway. The S&P closed down about three quarters of a percent at 7,706, the Nasdaq shed a bit more than a percent, the Dow gave up 352 points. The ten-year jumped some fifteen basis points and touched 5.12, which it has not done since 2007. Fed governor Michael Barr, at a housing conference in Chicago, said "in my base case, further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion." October hike odds went from about 55 percent to above 66. A month ago they were nine.
Meanwhile the President went out to Joint Base Andrews to greet Xi Jinping, the first time in eleven years an American president has done that for anyone, and Scott Bessent announced that the trade truce now expires January 10 rather than November 10. Sixty-one additional days. Equities read this as the resolution of something. The bond market, which reprices every asset on the board including the ones being toasted in the East Room tonight, went where it last was before the financial crisis. The S&P fell less than a percent and sits within shouting distance of its record. One of those two reactions is wrong.
June 2007, the last time this number meant anything: the ten-year went through 5.25 and our Geneva desk spent a week arguing about whether it signified. It did. Not remotely in the way any of us argued, and the loudest voice in the room had a beautiful thesis about Japanese pension demand, right about the direction and wrong about every mechanism underneath it. I bring it up because I catch myself assembling the same sort of argument this week, and the shape feels familiar, which is not the same as its being right.
Ahead: jobless claims before the bell, about 201,000 expected against 196,000 last week, then building permits and new home sales, which at these mortgage rates is less a datapoint than a welfare check. The state dinner will get more coverage than all three.
We closed Tesla (TSLA) yesterday, up about 8 percent over twenty trading days, against a quarter of a percent for the S&P over the same stretch. It closed on time. Twenty trading days is this desk's maximum hold, the position reached it Wednesday without hitting its stop, and the exit was the calendar's decision rather than mine. The thesis was the pace of robotaxi approvals and the pace held. The hold limit gets the credit here.
Gold is flat at $4,289, Brent is $102.42, Bitcoin is near $84,200 after a bad night for leveraged longs, S&P futures are off about four tenths, and the ten-year is holding 5.12. The only calm thing there is the metal, which I do not find reassuring.
The discount rate has gone back nineteen years and almost nobody has rerun the model.
Stay sharp, Salomon