Quick Note

One more quick commentary before this weekend's macro assessment.

Suffice to say that markets (from bonds to precious metals) are reflecting notable uncertainty... My reference yesterday to the economically-defensives (staples, healthcare, long-term treasuries) rallying against very negative action in virtually all other corners, has flipped on its head... I.e., yesterday's winners are -- along with virtually everything save for the energy-related space and, ironically, tech [flat after yesterday's drubbing] -- today's losers... Gold glimmered a bit at the open, but even it has rolled over (down 1%) as I type.

Of course, any or all of the above, given the present environment, may have reversed by the time you receive this.

So how to think about all this on an October Friday? As I chatted to our team this morning, I am macro-ambiguous in the very short-term... Meaning, there are sufficient macro and market cross-currents -- which I know I don't need to list for you right here -- to make the short-term trader (that's not us, btw) utterly dizzy, I'm certain.

But, like I said yesterday:

"...while we forever assess short-term dynamics (separating signal from noise) as we test our theses (and as we determine whether any tactical and/or additional hedging action makes sense), make no mistake, our strategy will always reflect our longer-term structural view on global macro realities."

Stay tuned…. 

Quick Note

Just a quick note followed by a brief macro update while away from the office this week...

A modest gain in our core allocation on the week is giving way this morning to broad selling in virtually everything growthy, including commodities and our non-US equity exposures... All else the same, the one intuitively-speaking surprise is the 2% drubbing gold is taking as I type.

Here's our tentative view on the action in gold taken from the synopsis below... "Since inception" refers to when we added it to our core allocation:

"GLD is -1.9% on a day when the long end is rallying and the dollar is only +0.16%. Gold is being sold as a funding source, not on its macro drivers. With GLD at +125% since inception, it’s the obvious place to raise cash."

We're noting some interesting breakdown in this year's correlations across certain asset classes -- as, with regard to rates and oil in particular, I pointed out in last weekend's video.

Suffice to say that markets are beginning to -- for the moment -- price the economic threat posed by high energy prices and a newfound fear that the AI-spending train may have already run its course... While the latter is without doubt an ultimate potentially-serious economic and market headwind, we remain skeptical that the day is yet upon us.

That said, the latest action in markets is consistent with typical late-cycle dynamics.

Note -- supporting the economic headwind view -- the following core positions action this morning:

XLP (consumer staples) +2.58%,  XLV (healthcare) +1.37%, TLT (Long-term treasuries, which we have a call option on) +1.27%... Again, the position you might otherwise expect to be doing well this morning is GLD (gold), down 2%... While there are a few other pockets of relative strength in our core mix, suffice to say that there's not enough there to fully offset the drubbing in tech-related, non-US and commodity exposures on the day so far... Of course, while we forever assess short-term dynamics (separating signal from noise) as we test our theses (and as we determine whether any tactical and/or additional hedging action makes sense), make no mistake, our strategy will always reflect our longer-term structural view on global macro realities. 

I'll offer up a more robust analysis of all things macro over the weekend.

Stay tuned...

The Fed 'Potentially' Adding Insult to Injury -- And Your Weekly Macro Update

In this week's video prelude we'll explore last week's inflation numbers, the latest action in oil and its rocky relationship with interest rates, and, among other things, an under-the-surface look at what's really troubling markets of late.

The Problem

My schedule today only allows for a quick pre-market note... So just quickly touching base on this morning's CPI report and my thinking around the whole inflation conversation.

Immediately upon the report coming in hotter than expected stocks went from nicely green to notably red in pre-market action... Tech and financials look to be taking the brunt of the hit so far... Precious metals getting pretty well hammered.

Fed funds futures immediately went from essentially pricing in no rate hike at this month's meeting, to a 50/50 chance... A December hike fully priced in.

In terms of the inflation problem itself, while we think higher (than recent years') inflation is a structural reality going forward, at the moment we see it as a supply problem much more so than a demand problem, which, therein, lies the problem.

I.e., the Fed speeding up the tightening of financial conditions by raising short-term interest rates is taking aim at demand (which, btw, is the only target they have -- as they can't print oil, for example, and they can't reduce trade barriers [read tariffs]).

So, while you'll hear commentary aplenty about how the Fed needs to get more aggressive, watch what happens to inflation expectations, and ultimately the near-term numbers, when a durable Middle East solution is found and if/when trade tensions seriously ease.

The former (in terms of safe passage of oil tankers) being an inevitability over coming months, the latter is less certain.. In either case the precise timing is up in the air.

Stay tuned, I'll have much more for you over the next few days.

Why the Ecoonomy's OK Despite Consumer Surveys & Other Serious Stuff

Definitely a must-watch video for clients!

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

Businesses Steady, Households Strained*

Week of October 5, 2026

Unreal That the S&P Hit an All Time High Yesterday, Literally Unreal (video)

Dear Clients, here's another (this one's short) video we'd like you to be sure and take in.

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Twists and Turns

Per yesterday's video, September was the first truly ugly month for markets since March... But now we enter a period that, even during past mid-term election years, tends to be a very good stretch for asset prices.

Of course this year's setup has more to contend with than simply domestic politicking!

For the moment, save for a yet-unconfirmed attack on an Aramco oil facility, the latest (weekend) news flow has been notably tame, relatively-speaking.

As I've pointed out, the US administration is in the eleventh hour if it intends to pull a few market levers to catch a wealth-effect edge heading into election day.

Scott Bessent taking the treasury bond buyback to its stated upside limit last week, plus Europe's giving the nod to the US's request to unleash a meaningful amount of diesel (in particular) reserves suggests that they've yet to give up on juicing market forces to perhaps sway the on-the-fence voter come early November.