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.
I've been thinking that if they're truly serious they'd come up with something that would open the Strait of Hormuz, at least for the next few weeks... But wait, the latest data say that Mid-East oil transit is nearly back to pre-war levels... Well, if so, how come we're not seeing any relief in the price per barrel, and, more importantly, in the price at the pump?
The answer according to most headlines is that it's no longer -- at least not for the moment -- about oil itself, as much as it is the lack of global refining capacity... I, frankly, think that it's more about the very high risk premium embedded in every barrel that sneaks its way through, given that there's been little progress on the negotiation front and that the US has just committed more military assets to the region -- a state of affairs that has pushed the cost of shipping the stuff to previously unimaginable heights, which of course hugely bleeds through to the price as well.
So (in terms of near-term expectations) buckle up, the next few days/weeks will no doubt see their share of twists and turns in news flow as well as in market action.
But for the patient long-term investor (and portfolio manager), it's of course the structural/durable setups that matter most.
Stay tuned...
Here's the summary of the latest PWA Index scoring, followed by your weekly macro wrap:
Hiring Stalls, Spending Doesn't*
Week of September 28, 2026
A week ago the economy delivered nearly every piece of good news it could. This week delivered one important piece of bad news: employers added only 29,000 jobs in September, far fewer than expected, and the prior two months were revised lower. The rest of the picture held up. Layoffs stayed near their lowest levels in years, and households spent at the fastest pace of the year. The bond market's reaction was the more unusual part. Expectations for another Fed rate increase in October fell sharply, yet long-term interest rates still rose to their highest levels since 2002.
The week in brief
- Hiring slowed sharply. Employers added 29,000 jobs in September against forecasts near 85,000, and July and August were revised down by a combined 60,000. Unemployment rose to 4.2% from 4.1%.
- Layoffs did not rise. Weekly unemployment claims, job-cut announcements and reported layoffs all sit at or near multi-year lows.
- Household spending rose 0.6% after inflation in August, the strongest month this year. Households drew down savings to do it: the saving rate fell to 4.1%.
- Inflation came in below forecasts, but mostly because the government revised its earlier figures. On a like-for-like basis, the Fed's preferred inflation gauge was unchanged at 3.4%, or 3.0% excluding food and energy.
- The odds of an October rate increase fell from about 70% to about 20%. A December increase remains almost fully priced.
- The 10-year Treasury yield rose about 12 basis points to 5.28%, and the 30-year to 5.61%, both the highest since 2002.
- Oil was roughly flat. Talks to reopen the Strait of Hormuz went backwards, while a coordinated release of emergency reserves by major economies pushed prices down on Friday. Diesel prices fell from their record.
- Equity breadth remained weak. Most stocks lagged the (tech-influenced) index.
- Our internal conditions gauge rose to +8.96 from +7.46, higher than about 98% of the past four years.
- What matters next: inflation on Wednesday, October 14 and the Federal Reserve decision on Wednesday, October 28.
A job market that stopped hiring, not one that started firing
The September jobs report was weak. The 29,000 jobs added were about a third of what economists expected, and the three-month average is now roughly 50,000.
The detail matters more than the headline. Almost every measure of layoffs is near its best level in years. Weekly unemployment claims are under 200,000. The number of people continuing to collect benefits is the lowest since early 2023. Announced job cuts were the fewest for any September since 2022. What has weakened is hiring. Job openings fell, and companies' announced hiring plans were the lowest for a September since 2011.
The rise in unemployment also partly reflects more people looking for work: the share of adults in the labor force rose. That is not a bad sign in itself.
Put simply, companies are holding on to the workers they have and are slow to add new ones. That kind of job market can last a while. It also tends to leave the economy more sensitive to the next shock, because hiring is already near a standstill when the shock arrives.
Spending ran ahead of income
Household spending was strong in August, up 0.6% after inflation. Income after taxes and inflation was flat. The difference came from savings: the saving rate fell to 4.1%, its lowest level since late 2022. Consumer confidence in a separate survey fell to its lowest reading since 2014.
Strong spending, flat income and gloomy sentiment do not usually last together for long. One of them gives way. We continue to watch whether spending slows to meet income, or income picks up to support spending.
Why long-term rates rose as Fed expectations fell
Normally, a weak jobs report pulls interest rates down across the board. This week the effect was uneven. Short-term rates, which track expectations for the Federal Reserve, were little changed to slightly lower as the odds of an October rate increase dropped. Long-term rates rose anyway. The 10-year and 30-year Treasury yields reached their highest levels since 2002.
The bond market's priced expectation of future inflation barely moved. So the rise did not come from inflation fears. It came from what economists call the term premium: the extra return investors demand for lending to the government for a long time. Government borrowing needs remain large, and the Treasury's program to buy back older long-term bonds drew far more sellers than it could absorb. Investors are asking to be paid more to hold long-term debt. They are not, so far, questioning the Fed's ability to bring inflation down.
That distinction matters for households and businesses. Mortgage rates track long-term yields, not the Fed's short-term rate. The average 30-year mortgage rate rose to 7.28%, its highest since October 2023. Long-term borrowing costs can keep rising even if the Fed pauses, and this week showed it.
Oil: diplomacy stalled, policy stepped in
Talks to reopen the Strait of Hormuz went backwards this week. An Iranian proposal was rejected, and shipping through the strait remains a small fraction of normal. Prices jumped on Thursday after China suspended fuel exports. They fell back on Friday, when major economies agreed to release 100 million barrels of emergency reserves, with diesel first in line. The administration also said it would not pursue a ban on diesel exports.
Diesel fell about 15 cents a gallon from its record. The supply problem in the Gulf is unchanged. What changed this week is that governments are now using reserves to cushion it. Reserves can bridge a disruption; they cannot replace the flows.
What our internal gauge says
Our internal conditions gauge rose to +8.96 from +7.46, higher than about 98% of the past four years.
It rose in the same week as a weak jobs report, and we want to be clear about why. Seven of the 67 measures changed. Three moved down: employment, vehicle sales and a freight measure. Four moved up: consumer spending, two measures of labor-market health that improved in September (broader unemployment and labor force participation), and household debt payments as a share of income. The two labor measures had upgrade thresholds we wrote down in advance, and they were met.
This week we also reviewed every measure in the gauge against its most recent release. Several had not been refreshed as often as they should have been, and three ratings changed as a result. Two moved down and one moved up, so on balance the review lowered the score.
The gauge reads conditions across the whole economy, and those remain firm. Hiring is the clear exception, and it is the one we are watching most closely. A higher score does not mean we read the jobs report as good news.
What we are watching
Monday, October 5 brings the services-sector survey, the largest part of the economy.
Friday, October 9 brings the University of Michigan's early read on October consumer sentiment and inflation expectations.
Wednesday, October 14 brings September consumer and producer inflation. Manufacturers reported a sharp jump in the prices they pay this week.
Wednesday, October 28 is the next Federal Reserve decision, now priced at about 20% for a hike, with December still close to fully priced. The question has shifted from whether the Fed hikes again to when.
Wednesday, November 4 brings the Treasury's quarterly borrowing announcement. After this week, it matters more than usual for long-term rates.
This commentary is provided for informational and educational purposes only and does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation regarding any security, sector, or investment strategy. The views expressed reflect the opinions of Private Wealth Advisors as of the date written and are subject to change without notice. Information has been obtained from sources believed to be reliable, but its accuracy and completeness are not guaranteed. Past performance is not indicative of future results, and all investing involves risk, including the possible loss of principal. Nothing contained herein should be construed as personalized investment, tax, or legal advice.
*The section titled "Hiring Stalls, Spending Doesn't" was drafted with the assistance of artificial intelligence tools under the direction and editorial review of Marty Mazorra, Chief Investment Officer of Private Wealth Advisors. All analysis, conclusions, and final content are his own.
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