Good Morning BullBuzzers!
"Everyone has a plan until they get punched in the mouth."
⚡TODAY IN 10 SECONDS
The strongest business-activity reading since 2021 pushed the 10-year yield to 5.11%, its highest since 2007, and the S&P 500 fell 0.72%, with energy the only green sector.
Our idea is Tradeweb ($TW), the bond-trading platform that gets paid when yields swing, and the 9:30 test is whether the 10-year holds 5% after jobless claims.
FOCUS OF THE DAY
Secret #7: Build A Process, Not Predictions
Yesterday we cut our odds of an October Fed hike to 44%, because the 2-year yield broke 4.76% on Tuesday, a trigger we had named in advance. On Wednesday at 9:45, S&P Global's flash PMI showed U.S. business activity growing at its fastest pace in five years, with input costs rising at the steepest rate in four.
The 2-year jumped 14 basis points to 4.85%, and the prediction markets went from about 52% to 68%. Our forecast was wrong within 24 hours. Our process was not. We wrote the trigger down before the data; the data reversed it, and today we raise the call instead of defending it. Nobody forecasts a PMI. What you can do is decide ahead of time what you will do at each level, so the number makes the decision, not your ego.
Find all 10 Secrets to Success at the bottom of today's issue.
📰 HEADLINES
Bond yields hit a 19-year high. S&P Global's flash composite PMI rose to 58.4, the highest since July 2021, and the 10-year yield jumped 15 basis points to 5.11%, its biggest one-day rise since April 2025. The 5-year topped 5% for the first time since 2007, and 72% of U.S. stocks fell.
Brent is back above $100. Crude rose after U.S. and Iranian leaders traded barbs at the UN, and an armed group shut a pipeline from Libya's El Sharara field, about a third of the country's output. Brent trades near $104.88, and United fell 3.90%.
Xi landed as the truce got longer. Treasury Secretary Bessent said the U.S. and China agreed to extend their trade truce to January 10, ahead of today's Trump-Xi meeting in Washington. Reuters says AI rules, Taiwan and the Middle East are on the agenda, with CEOs from Apple, Meta, Amazon and Tesla expected.
🎯 IDEA OF THE DAY
Tradeweb runs electronic marketplaces where banks, asset managers and hedge funds trade Treasuries, mortgages, credit and swaps. It earned $896.7 million on $2.2 billion of revenue over the past year, holds $1.9 billion of net cash, and keeps about 41 cents of every revenue dollar as profit.
Tradeweb does not need yields to go up or down. It needs them to move. When the 10-year swings 15 basis points in a day, funds rebalance and more bonds change hands. August U.S. government bond volume was already up 28.9% from a year ago. The stock fell 4.5% Tuesday with other financials, and the September volume report lands in early October.
If rates calm down quickly, volumes cool, and the July earnings miss showed this stock can gap lower.
🔔 HEADING INTO THE OPEN
Bird's-Eye: Futures are lower, SPY -0.58% and QQQ -0.99%, and New York Fed President Williams said another hike this year is reasonable. The market is not pricing a recession. It is pricing more expensive money, so treat tech rallies as trades, not trends, until the 10-year drops back under 5%.
Ground Level: The summit is today, but its best news is already out: the truce is extended and Polymarket prices a tariff deal by October 31 at 89.5%. That leaves more room to disappoint than surprise. The one upside nobody is pricing is rare earths, which Kalshi puts at 15%.
Under the Hood: Utilities (-1.92%) and real estate (-1.55%) were the worst sectors, and small caps fell 1.84%, more than twice the S&P. Anything that behaves like a bond, or borrows at floating rates, loses when Treasuries pay 5.11%, so underweight $XLU, $XLRE and $IWM until yields stop rising.
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For education only — not financial advice. BullBuzz™ by TRDR Media shares opinion and analysis, not recommendations to buy, sell, or hold any security. TRDR Media is not a registered investment adviser and does not manage or solicit funds. Trading and investing carry a substantial risk of loss and aren't suitable for everyone. Any prices, levels, or data may be delayed or estimated, and past results or prior calls don't guarantee future performance. You alone are responsible for your decisions. Consult a licensed financial advisor before trading.