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Over the last month Market, Quality and Momentum led while Size, Value and Low volatility lagged. 4 of 7 style premia were positive. Risk appetite reads 45/100 (where the high-beta, credit, small-cap and low-volatility premia sit against their own history). The S&P 500 returned +1.6% and the 10-year yield moved +0.44 pp to 5.28%.
From the headlines — Mixed backdrop with high yields and oil volatility. The 10-year Treasury yield sits at 5.27% while oil trades around $97.31 per barrel, underscoring elevated financing costs and commodity pressure. Core PCE inflation is 3.01% and the unemployment rate is 4.20%, keeping the policy outlook uncertain.
Stance: the premia (risk appetite ≥ 60 risk-on, ≤ 40 risk-off) and the AI reading of the headlines; when they disagree the regime is mixed.
Long/short premia of index ETFs over the last month, with the percentile of each against its own history since 2015.
| Factor | 1M | 3M | 1Y | Trend |
|---|---|---|---|---|
| MarketS&P 500 total return | +1.6%P49.0 | +2.6%P36.0 | +16.7%P53.0 | risingsince 2026-04-14 |
| SizeSmall caps minus large caps | −5.8%P3.0 | −8.4%P6.0 | −1.3%P66.0 | fallingsince 2026-09-09 |
| ValueValue minus growth | −4.4%P10.0 | −0.9%P60.0 | +12.8%P95.0 | fallingsince 2026-09-30 |
| MomentumRecent winners minus the market | +1.3%P70.0 | −3.5%P17.0 | +8.7%P85.0 | fallingsince 2026-08-20 |
| Low volatilityLow-volatility stocks minus the market | −0.8%P41.0 | −0.2%P59.0 | −9.8%P26.0 | fallingsince 2026-09-22 |
| QualityHigh-quality stocks minus the market | +1.5%P97.0 | +0.4%P62.0 | −0.5%P51.0 | risingsince 2026-10-08 |
| High betaHigh-beta stocks minus the market | +1.0%P61.0 | −0.6%P45.0 | +19.0%P86.0 | fallingsince 2026-10-08 |
| RatesChange in the 10-year Treasury yield | +0.44 ppP95.0 | +0.71 ppP92.0 | +1.15 ppP90.0 | risingsince 2026-08-20 |
| CreditHigh yield minus investment grade | +0.4%P53.0 | +1.7%P67.0 | +5.0%P71.0 | risingsince 2026-06-29 |
Sectors versus the S&P 500, 1 month. Leading: Technology (+3.7%), Communication Services (−0.4%), Consumer Staples (−0.4%). Lagging: Real Estate (−6.8%), Financials (−6.3%), Utilities (−5.5%). Dispersion 3.2%.
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Latest readings; the projection is the one-step forecast of the Economics Explorer's dynamic factor model.
| Indicator | Latest | 3-month change | Year over year | Trend | Projection |
|---|---|---|---|---|---|
| Effective Federal Funds Rate2026-09-01 | 3.75% | +0.12 pp | −0.47 pp | rising | ▼ 3.552026-11-30 |
| 10Y Treasury Yield2026-10-06 | 5.27% | +0.79 pp | +1.09 pp | rising | ▼ 4.732026-11-30 |
| 10Y minus 2Y Treasury2026-10-07 | +0.51 pp | +0.15 pp | −0.06 pp | rising | ▼ 0.462026-11-30 |
| CPI (All Urban Consumers)2026-08-01 | 3.35% | −0.81 pp | – | rising | ▼ 2.952026-11-30 |
| Core PCE Price Index2026-08-01 | 3.01% | −0.15 pp | – | rising | ▼ 2.472026-11-30 |
| Unemployment Rate2026-09-01 | 4.20% | 0.00 pp | −0.20 pp | stable | → 4.202026-11-30 |
| Nonfarm Payrolls2026-09-01 | +29k | – | – | rising | ▲ 180.862026-11-30 |
| VIX Index2026-10-07 | 15.08 | −1.05 pp | −2.16 pp | falling | ▲ 17.722026-11-30 |
| S&P 500 Index2026-10-07 | 7802 | +4.0% | +16.2% | rising | ▼ 7468.502026-11-30 |
| WTI Crude Oil Spot Price2026-09-01 | $97.31 | +14.7% | +52.1% | rising | ▼ 90.202026-11-30 |
| Trade Weighted US Dollar Index2026-10-02 | 121.38 | +0.6% | +0.8% | rising | ▼ 119.512026-11-30 |
| Moody's Baa Corporate Yield2026-09-01 | 6.47% | +0.47 pp | +0.64 pp | rising | ▼ 6.362026-11-30 |
| Consumer Sentiment (UMich)2026-08-01 | 51.70 | +15.4% | −11.2% | rising | ▼ 45.672026-11-30 |
| Housing Starts2026-08-01 | 1275 | +7.9% | −1.2% | rising | ▲ 1308.352026-11-30 |
AI briefing over 120 headlines from 7 sources.
SpaceX agreed to purchase a nationwide spectrum portfolio as it pushes its Starlink service deeper into the U.S. market. The deal hammered shares of AT&T, Verizon and T‑Mobile.
Telecom equities face downside pressure as the spectrum acquisition could intensify competition; no direct macro link.
U.S. regulators fined American Express $350 million for an insufficient anti‑money‑laundering program and systemic failures that left $13 billion in suspicious transactions unreported.
The fine could weigh on the financial services sector and raise compliance costs for banks and card issuers.
Micron, Nvidia and other AI chip stocks fell after a report that OpenAI’s annualized revenue fell short of expectations, though analysts said the figure reflects reporting differences. OpenAI’s revenue was said to be roughly $50 billion at the end of September, lower than previously signaled.
Weak revenue signals dampen sentiment for AI and semiconductor firms, which are also sensitive to the 10‑year Treasury yield now at 5.27%.
Hurricane Isaias strengthened as the U.S. Gulf Coast prepared for landfall, raising concerns for regional production. Oil prices jumped amid the storm and Iran tanker attacks.
Higher crude prices support energy stocks; WTI crude is $97.31 per barrel, adding inflationary pressure.
US bonds rallied after a 30‑year auction showed solid demand, while Treasury yields have retreated from early highs but remain elevated. Comments from Fed officials and a “bullet bid” on the 10‑year were noted.
Elevated yields at 5.27% keep pressure on equities and favor fixed‑income assets.
Every style exposure of the book against the month's premium, its sector tilts against sector leadership, and an estimate of what those exposures contributed.
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