Gold slipped under four thousand dollars in the same week crude went through a hundred, which is a strange way for an inflation hedge to behave. Good morning and welcome to today's market chronicle. It's Monday, October 26, 2026.
Friday was ugly in the places that still answer to the real economy. The Dow gave up 652 points, about one and a quarter percent, the S&P closed down roughly half a percent, and the Nasdaq barely moved, which tells you the selling sat in industrials and insurers and anything that buys fuel by the tanker. WTI punched through a hundred on the chance of a US strike on Iran. Second losing week in a row. Overnight Trump said there would be no strike today, crude came off about two percent, and futures ticked up a third. The weekend priced itself on the word "today."
So the week opens with everyone's attention aimed at the hyperscalers. Microsoft (MSFT), Alphabet (GOOGL) and Amazon (AMZN) report, and the questions will all be depreciation schedules and whether the capex is a moat or a hole. Fine. Meanwhile inflation has run above two percent for five straight years and the marginal input is now a barrel priced by whether a drone finds a Saudi refinery. Warsh goes Wednesday, holds, and says nothing, having decided forward guidance was a mistake and the market should earn its own opinions. The ten-year sits a hair under five percent, where it has been for weeks.
I spent Sunday evening rereading my notes from the autumn of 1990, which is what happens when you have been at this long enough to own filing cabinets. Oil doubled on Kuwait, the Fed cut anyway, the recession came regardless. The parallel does not hold. Volcker had already broken inflation's back and expectations stayed put while the barrel went sideways across the ceiling. We have a fifth year of overshoot instead. A colleague in Zurich used to call that the difference between a shock and a habit. He retired. Smart man.
Ahead today: nothing. Durable goods tomorrow, GDP and core PCE Thursday, the Fed in between. Nobody will care about any of it before Wednesday afternoon.
On our own book, no single position earned the paragraph this morning, which is itself the report. The Mosaic Mid-Horizon sleeve lost about three quarters of a percent over the five sessions through Friday, against the SPDR S&P 500 ETF (SPY) on a total return basis, down about four tenths. A third of a point behind, in a week when being diversified away from the index meant owning what crude was punishing.
Levels, as near as I can get them before the bell: gold around $3,990, WTI $101.13, Brent $114.60, Bitcoin near $79,500, S&P futures about 7,681 and the ten-year at 4.97%. Bitcoin is down roughly a fifth from its highs in the most inflationary month of the year, which is quite a performance for a hedge.
A market that cannot decide whether crude is weather or climate will keep trading it as weather, because weather is cheaper to be wrong about.
Have a good one, Salomon