👀 Today’s Stories at a Glance
🔥 The boom hit bonds: US business grew at its fastest in 5 years, and the 10-year yield closed at 5.11%, the highest since 2007.
🤖 Muse will take a cut: Zuckerberg says Meta will profit from a small fee on transactions, with Walmart, Expedia and Instacart signed up.
🛢️ Brent back above $100: oil jumped 3.9% to $103.08 after Iran’s president ruled out free passage through Hormuz under the blockade.
🇨🇳 A 2-month truce extension: Bessent pushed the trade truce to 10 January as Trump and Xi sit down at the White House on Thursday.
🪙 Bitcoin slid under $84,000: $581 million of positions were wiped out as yields jumped, while US bitcoin funds still took in $347 million.
💸 SoftBank’s record-size junk bond: its $11.1 billion sale beat Numericable’s 2014 deal, with dollar coupons up to 9.75%.
⛽ Wright doubts the diesel ban: Trump’s energy secretary says a diesel export ban “definitely doesn’t work”, a day after Trump backed one.
🇳🇴 Norway raised, Britain warned: Norges Bank lifted rates to 4.50%, and a Bank of England deputy said high energy prices could force tightening.
🍔 McDonald’s paid for its franchisees: shares fell nearly 5% after it pledged $8.5 billion of franchisee support through 2036.
📈 The 10-year broke 5.02%: Chart of the Day covers the 5.14% weekly candle, the 5.02% line and the 4.4% back test.
🧠 One Big Thing
The American economy is running hot, and the bond market is charging for it. Businesses reported their fastest growth in more than 5 years on Wednesday, and their costs rose at the steepest rate in 4 years. The 10-year Treasury yield closed at 5.11%, its highest since 2007. That yield sets the price of mortgages, company loans and government debt around the world, and shares and crypto feel it when it climbs. Traders now put the odds of another Fed rate rise on 28 October at roughly 7 in 10.
⚖️ Fear & Greed
📉 The Number That Matters
7.12%
The average 30-year fixed US mortgage rate hit 7.12% in the week to 18 September, up from 6.97% and the highest since May 2024. It was measured before Wednesday’s jump in bond yields.
⚔️ Winners vs Losers
Winners
No major winners today.
Losers
NEOV 0.00%↑ : -22.71% NeoVolta Inc. sank after reporting a fiscal fourth-quarter loss of 24 cents a share against a 7 cent estimate, as residential installer sales collapsed following federal tax law changes earlier in the year. The quarter also took a 3.9 million dollar bad-debt provision and a 1.1 million dollar inventory write-down.
SFIX 0.00%↑ : -18.09% Stitch Fix, Inc. slid after fiscal fourth-quarter revenue of 324.4 million dollars missed estimates and fiscal 2027 revenue guidance of 1.31 to 1.36 billion dollars came in well below the 1.41 billion consensus. A narrower-than-expected loss of 2 cents a share did little to offset the weak outlook.
MGM 0.00%↑ : -9.14% MGM Resorts International dropped after Barry Diller’s People Inc. withdrew its 48.30 dollar-per-share takeover proposal, which removed the buyout premium from the stock. People Inc. still owns about 27% of the company, so a large holder remains with no deal attached.
ARM 0.00%↑ : -4.25% Arm Holdings plc extended Wednesday’s chip-sector pullback as traders took profits after a 41% one-month rally built on bets that agentic AI, led by Meta’s Muse agent, will lift server CPU demand. Intel is falling in the same move, down 3.39% pre-market after its own 38% monthly run.
📊 Market Snapshot
Cryptocurrencies:
Bitcoin (BTC): $83,303 (▼1.28%)
Ethereum (ETH): $2,640 (▼1.66%)
XRP: $1.46 (▼2.96%)
Equity Indices (Futures):
S&P 500: 7,724 (▼0.63%)
NASDAQ 100: 30,436 (▼1.07%)
FTSE 100: 10,708 (▲0.18%)
Commodities & Bonds:
10-Year US Treasury Yield: 5.14% (▲0.57%)
Oil (WTI): $93 (▲0.84%)
Gold: $4,256 (▼0.73%)
Silver: $63.67 (▼1.20%)
Data as of: UK: 11:10 BST / US: 06:10 EDT / Asia (Tokyo): 19:10 JST
✅ 5 Things to Know
🔥 America’s boom pushed the 10-year to a 2007 high
58.4. That was S&P Global’s flash reading of US business activity for September, up from 56.0 in August and the fastest expansion since July 2021. Services came in at 58.7 and manufacturing at 57.0, a 52-month high. Hiring rose at the fastest pace since June 2022. Input costs jumped at the steepest rate in 4 years. Chief business economist Chris Williamson said the survey points to annualised growth of around 5%, and that piling backlogs mean “companies are developing more pricing power”. S&P Global
Bonds sold off hard. The 10-year Treasury yield closed at 5.11% on Wednesday, up 15 basis points and its highest since 2007. A basis point is a hundredth of a percentage point. The 5-year yield broke above 5% during the day for the first time since 2007. A $70 billion auction of 5-year notes then cleared at 5.03%, the highest auction yield since 2006, and above where the notes traded just before the sale. Buyers wanted extra reward to take them. The S&P 500 fell 0.75% to 7,706.03 and the Nasdaq Composite lost 1.13%. Investing.com
Why does a strong economy hurt? Because the Fed is trying to cool prices, and a boom with rising costs gives it more work to do. On Monday 21 September, Chicago Fed President Austan Goolsbee said he was watching whether demand was outgrowing what the economy can supply. The same survey showed backlogs rising at the sharpest rate since May 2022. Fed Governor Michael Barr said on Wednesday that “further policy adjustments are likely to be needed”. New York Fed President John Williams said in London on Thursday that another rise by year end “seems to me a reasonable way of thinking about it”. Futures pointed lower again on Thursday morning.
Sensei’s Insight: The Fed raised rates on 16 September to cool things down. A week later, businesses reported their fastest growth in 5 years. What I am watching is the PCE inflation reading on 30 September, because it is the next hard number before the 28 October meeting.
🤖 Muse is free, and Meta takes a cut
“We believe that Muse will make you money.” Mark Zuckerberg used Meta Connect on Wednesday evening to explain how Meta plans to earn from its AI agent. Muse stays free “for a huge number of tokens”, and “over time we will profit by taking a small fee from transactions.” He did not say how big the fee will be. Chief AI officer Alexandr Wang added PayPal payments and named Walmart, Best Buy, Gap, Sephora, Wayfair and American Eagle as shopping partners, with Expedia for travel and Instacart for groceries. Sensor Tower counted 560,000 daily users of the app after 11 days. Yahoo Finance
The 23 September issue named the thing to watch as whether Muse could pay for things. Through PayPal, it now can. That turns Meta into a toll collector on each purchase as well as an advertiser. The retailers that signed up are trading some control over the customer for reach. Amazon, which has blocked Muse since 20 September, is still out.
The market has not settled on who wins. Expedia’s shares fell nearly 8% on Wednesday, hours before it was named a Muse partner, and Booking lost about 5%, on the view that agents will bypass the booking sites. Meta itself closed up about 1% at $744 and slipped in early trading on Thursday. 24/7 Wall St
Sensei’s Insight: A small fee on a huge number of purchases is how Visa and Mastercard built their businesses. Meta has not named its fee yet. The number I am watching is the first take rate it discloses, because that decides whether Muse is a feature or a business.
🛢️ One speech put Brent back above $100
Brent crude settled at $103.08 a barrel on Wednesday, up 3.9%, ending a 5-session losing run. On Tuesday it had touched $97.36, its lowest since 8 September. West Texas crude rose 1.8% to $92.16. The trigger was Iran’s President Masoud Pezeshkian at the UN General Assembly. He vowed that Iran would never surrender, and said it would not allow freedom of navigation through the Strait of Hormuz while sanctions and the US blockade remain. Reuters
Supply news pushed the same way. An armed group shut a pipeline from Libya’s Sharara field on 21 September, cutting about 130,000 barrels a day. The price rose even though US crude stocks grew by 3 million barrels in the week to 18 September, when a small fall was expected. On Thursday, Yahya Rahim Safavi, a military adviser to Iran’s Supreme Leader, said the front could expand to “the Indian Ocean and perhaps beyond”. Brent was still above $100 early on Thursday. AFP
The 23 September issue set out Iran’s 3 conditions for reopening Hormuz, each asking Washington to move first. Pezeshkian’s speech restated them. So the talks in New York have not shifted either side’s position, and the barrel went back to pricing the war. Oil also feeds the cost gauges in the business survey that sent the 10-year yield to its highest since 2007 on the same day.
Sensei’s Insight: Tuesday priced a deal and Wednesday priced a speech. What I am watching is the next round of talks, which Trump says is scheduled for the very near future, because the ships will not move until one side changes its terms.
🇨🇳 Trump and Xi start with a short truce
Xi Jinping stepped off his plane at Joint Base Andrews late on Wednesday and said in his arrival statement that China and the US “should be partners, not rivals”. The same day, Treasury Secretary Scott Bessent told Fox News that the Busan trade truce, “scheduled to end on Nov. 10”, is “going to be extended until Jan. 10 to give us more time.” China's commerce ministry pointed to an extension on Thursday but has not confirmed the new date. Trump and Xi hold talks at the White House on Thursday, followed by a state dinner in the East Room. Fox News
Markets read 2 months as short. UBS called the extension “shorter than market expectations”, and China’s CSI 300 index was down 1.3% by lunchtime on Thursday. The record so far explains the caution. China has bought about half of the 25 million tonnes of soybeans a year it committed to, and its rare earth magnet shipments fell 20% in August. CNBC
What could come out of the talks? US Trade Representative Jamieson Greer has said a US-China “Board of Trade” will be announced, and Scott Kennedy of the Center for Strategic and International Studies expects “a small number of deliverables”. AI rules, chip export licences, rare earths, Iran and a $14 billion Taiwan arms sale now on hold are all on the table. Jensen Huang, Tim Cook, Elon Musk, Mark Zuckerberg and Sam Altman are on the dinner guest list.
Sensei’s Insight: A 2-month extension is a deadline, and it now lands on 10 January. What I am watching is whether the Board of Trade comes with numbers attached, like soybean tonnes or chip licences, because a new committee without them is a promise to keep talking.
🪙 Yields reached bitcoin, and the funds kept buying
What does a 2007 high in bond yields do to bitcoin? On Wednesday it pushed the price below $84,000, after a high of $87,283 earlier in the day. Bitcoin traded near $83,900 on Thursday morning, down more than 2% over 24 hours. XRP fell harder, by 5% to 6%, and ether lost 2% to 3%. The steepest drop came right after the US business survey that sent the 10-year yield to its highest since 2007. CoinDesk
Forced selling did the damage. CoinGlass counted about $581 million of crypto positions force-closed by exchanges in 24 hours, $438 million of them bets on higher prices. US spot bitcoin ETFs took in a net $346.9 million on Wednesday while the price fell, after $714.7 million on Tuesday, according to Farside Investors.
Friday brings the quarter’s biggest options date. About $15.9 billion of bitcoin options and $2.1 billion of ether options expire on Deribit at 9am UK on Friday 25 September, which is 4am in New York, according to Deribit chief executive Luuk Strijers. That is 37% of the exchange’s bitcoin options. Calls, which pay out if the price rises, outnumber puts, with a put to call ratio of 0.69. CoinDesk
Sensei’s Insight: The same bond move hit stocks and crypto in the same hour. Bets on a rise were force-closed and fund buyers kept coming in. What I am watching is whether those fund inflows hold through Friday’s expiry, because they were the steady side of Wednesday’s market.
Stories You Might Have Missed
💸 SoftBank sold a record-size junk bond
SoftBank priced $11.1 billion of high-yield bonds on Wednesday. Bloomberg called it the biggest high-yield corporate bond sale ever, ahead of the $10.9 billion Numericable raised in 2014. The dollar notes pay about 8.6% for 3.5 years, 9.25% for 5.5 years and 9.75% for 7.5 years. The euro notes pay about 7.1% and 8%. The dollar notes alone drew more than $30 billion of orders. The money covers SoftBank’s $10 billion OpenAI payment due on 1 October. The 23 September issue named the 8.2% yield on SoftBank’s 2031 bond as the level to compare against, and the new longer notes priced well above it. Free Malaysia Today
⛽ Trump’s energy secretary doubts the diesel ban
“The blunt tool of banning diesel exports definitely doesn’t work.” Energy Secretary Chris Wright said that at an Economist event in New York on Wednesday, a day after President Trump said he backs a ban. Wright said the administration is working with refiners to raise diesel supply “in a simpler, voluntary, cooperative fashion”, with announcements due in the coming days. The Energy Department said Wright is “fully aligned” with the President. AAA’s national diesel average was $6.52 a gallon on Wednesday, just below the record set a day earlier. The gap between diesel and crude prices sits above $100 a barrel, near the record of $106 set on 1 September. Reuters
🇳🇴 Norway raised rates, and a Bank of England deputy warned
Norges Bank raised its policy rate to 4.50% from 4.25% on Thursday morning, which 16 of 28 economists polled by Reuters expected, and said it is “prepared to raise the policy rate further if needed”. Sweden’s Riksbank held at 1.75% and said rates should rise more than it forecast in June, starting this year. The Swiss National Bank held at 0%. In a speech on Thursday, Bank of England Deputy Governor Clare Lombardelli said policy is “increasingly likely to need to tighten if elevated energy prices persist”. She voted with the majority to hold rates at 3.75% on 17 September. Investing.com
🍔 McDonald’s pledged $8.5 billion to its franchisees
McDonald’s shares fell nearly 5% on Wednesday after its investor day. It committed about $8.5 billion of support to franchisees through 2036, around $5 billion of it by 2030, through rent relief and capital support. It also pushed back its goal of 50,000 restaurants worldwide from 2027 to 2028, citing cautious consumer spending and higher construction costs. Rival restaurant shares barely moved, which made the drop a verdict on McDonald’s own plan. 24/7 Wall St