Liz Ann Sonders Re-poster

The preliminary S&P Global US Composite PMI for October registered a reading of 56, which compares to the prior figure of 55.9 and exceeds the estimated 55.5. The underlying data highlights that employment expanded and demand remained firm, even though selling prices stayed elevated. Overall, these ongoing trends continue to suggest firm GDP growth.

@SPGlobalPMI

The Kansas City Fed Services Index experienced a notable surge in October, climbing to a level of +10. This performance easily surpassed the forecasted estimate of +1 and marks a distinct improvement from the prior reading of 0.

Taking a closer look at the underlying components, revenue showed considerable strength by jumping to +16, which is a solid increase over the previous figure of +6. The employment picture also brightened, shifting into positive territory at +2 following a prior result of -10.

Regarding costs, both input and selling prices remain elevated, although they did cool down slightly compared to their September levels.

The newest episode of the #OnInvesting podcast is officially live. Join @CollinMartinCS and me as we take a comprehensive look at the recent volatility surrounding Treasury yields. During our conversation, we evaluate how persistent inflation might influence upcoming Fed policy decisions. We also explain why bonds continue to serve as a reliable source of income and portfolio diversification, regardless of interest rates remaining at higher levels. Additionally, our discussion goes beyond the headline numbers to explore what is really happening during this earnings season. You can access the full episode through this link:
https://www.schwab.com/learn/story/can-bonds-still-do-their-job

Here is a summary of how various market sectors and indices performed yesterday, alongside their MTD and YTD figures.

A flight to safety is currently unfolding in the financial markets. We are seeing the rolling correlation between the 10y yield and the S&P 500 become considerably less negative. This shift is taking place because the 10y yield is trending lower, and as it declines, it is taking its cues much more from economic growth expectations rather than inflation concerns.

Evaluating the Performance of the Baskets

The information for Tensor10 is presented here in both graphical and tabular formats.

An Overview of Index Drawdowns and the Percentage Outperforming

Graphs illustrating breadth

I am eagerly anticipating my appearance on @BloombergTV today. I will be joining @FerroTV @lisaabramowicz1 and @annmarie for @bsurveillance this morning around 8am ET.

According to recent projections from Mercer, the overall cost of health benefits for each employee is anticipated to climb by 8.2% in the year 2027. If this forecast holds true, it will represent the most significant yearly jump recorded since 2003.

@DataArbor

A noticeable divergence is emerging within the @KansasCityFed Manufacturing Index regarding the costs businesses are absorbing versus the revenue they are bringing in. This October, the component tracking prices paid, which is highlighted in blue, climbed to its highest point since the middle of 2022. At the same time, the orange indicator representing prices received experienced a sharp decline. Ultimately, these opposing movements are creating an increasingly wide gap between the two metrics.

A feeling of hesitation continues to linger among market participants. Over the previous week, the bull-bear spread tracked by @AAIISentiment stayed in the negative range, clearly showing that investors are maintaining a cautious mindset.

During the month of October, the Kansas City Fed Manufacturing Index saw a gentle decline to 55.4 when adapted to the ISM methodology. Even with this slight moderation, the reading remains impressively robust.

For the month of October, the Kansas City Fed Manufacturing Index recorded a decrease, settling at +11. This latest result came in slightly below the estimated +12 and represents a step down from the prior reading of +14.

When reviewing the specific components of the report, new orders took a steep dive, falling to +3 from the previous +24. Both production and shipments also showed moderation, with production easing to +16 from +20, and shipments dropping to +18 from a prior +21.

In contrast, the employment metric saw a minor improvement, edging up to +1 from 0. At the same time, the index for prices paid increased, reaching +70 compared to the prior level of +68.

Here is a look at the most recent unemployment figures. The number of initial jobless claims has decreased to 194k, which comes in lower than the expected 200k as well as the previous mark of 200k, a number that was recently revised upward from 199k. At the same time, continuing claims climbed to 1.728M. This total is higher than the anticipated estimate of 1.71M and the prior count of 1.703M, a figure that had been revised downward from 1.71M. When breaking down the regional data, the most notable claim increases took place in OH with an addition of 3.9k, TN with a rise of 3.5k, and PA going up by 2k. In contrast, the largest reductions were observed in NV with a drop of 444, IL falling by 148, and HI decreasing by 122.

A recent poll conducted by the National Institute on Retirement Security sheds light on the main reasons non-retired Americans struggle to build their nest eggs. The data reveals that 41% of these individuals point to paying off debt as the primary barrier stopping them from increasing their retirement savings. Right on the heels of that figure, 39% of respondents blame high housing costs for their inability to put additional money away for the future.

@DataArbor

At the close of 2Q26, retirement assets in the U.S. accumulated to a total of $51.2 trillion, based on information from ICI. The data highlights that IRAs represented the largest category of these savings, making up $19.1 trillion of the broader market. @DataArbor

Over the past week, mortgage rates experienced a minor decrease, which is illustrated in the top section. Despite this helpful shift, the volume of mortgage applications still dropped by 5.3%, as shown at the bottom. This recent reduction officially marks the seventh consecutive weekly decline in application numbers.

Based on projections from the @USDA Economic Research Service, U.S. net farm income is anticipated to experience a downturn in 2026 due to steadily climbing operational expenses.

@DataArbor