Equities at New Record Highs

Can Wall Street keep partying while bond markets burn?
https://www.reuters.com/commentary/reuters-open-interest/can-wall-street-keep-partying-while-bond-markets-burn-2026-10-07/
There is a conundrum at the heart of US financial markets right now, it seems. Bond market fears are reaching fever pitch, catapulting Treasury yields to their highest levels in at least 20 years, yet the Nasdaq and S&P 500 are hitting record peaks. What gives?
 
A Top-Heavy Stocks Rally Is Daring Bond Yields to Break It  
https://www.bloomberg.com/opinion/newsletters/2026-10-06/a-top-heavy-stocks-rally-is-daring-bond-yields-to-break-it

Stocks Reach New High as Investors Look Past Rising Rates
https://www.nytimes.com/2026/10/06/business/stock-market-record.html
The S&P 500 rose 0.6 percent on Tuesday, exceeding its previous peak set in August and taking its gain this year to more than 14 percent.
 
The S&P 500 Hits a New Record High, Powered by Tech—and Not Much Else
https://www.wsj.com/finance/stocks/the-s-p-500-hits-a-new-record-high-powered-by-techand-not-much-else-66e01705
Most U.S. stocks are down, but the market’s AI engine is firing on all cylinders.
 
U.S. Investors Have an ‘Exorbitant Privilege’
https://www.wsj.com/finance/investing/u-s-investors-have-an-exorbitant-privilege-16201ed3
The S&P 500 just hit another record, but it sure doesn’t look like a bull market beneath the surface.

America’s favorite index is misleading investors about the state of the stock market
https://www.marketwatch.com/story/americas-favorite-index-is-misleading-investors-about-the-state-of-the-stock-market-2e91ca95
The market is splitting into two camps: ‘AI’ vs. ‘non-AI’.

 
Is A Stock Market Correction Coming? Most Americans Think So
https://www.fa-mag.com/news/is-a-stock-market-correction-coming--most-americans-think-so-88713.html
 
Stocks Could Face 'Ugly 2027' If Earnings Forecasts Weaken, Strategist Says
https://www.fa-mag.com/news/rising-stocks-with-weakening-eps-revisions-could-sink-s-p--strategist-says-88706.html 

Will Consumers Keep Spending?

The Mighty American Consumer Is Crashing Through Inflation and Driving Growth
https://www.wsj.com/economy/consumers/american-economy-consumer-profile-33903de1
Spending is rising because prices are climbing and Americans are buying more stuff, despite long-running frustrations over inflation. 
 
Related:
https://www.nytimes.com/2026/10/03/business/trump-economy-inflation-midterms.html 

Will the US Government Try to Inflate Away its Debt Burden?

Trump just soft-launched higher inflation as the new solution for rebalancing the $40 trillion U.S. national debt
https://finance.yahoo.com/economy/policy/articles/trump-just-soft-launched-higher-111017831.html

What bond market reveals about Congress and the debt
https://finance.yahoo.com/economy/policy/articles/bond-market-reveals-congress-national-094500766.html

 
Related:
Investors beware: Fiscal dominance and financial repression ahead by Vivekanand Jayakumar, The Hill - 07/13/25
https://thehill.com/opinion/finance/5397963-fed-keeping-rates-low-trump-administration/ 

US Labor Market - Still Stable?

September Hiring Trudged Along but Labor Market Still on Steady Track
https://www.wsj.com/economy/jobs/september-jobs-report-unemployment-6b6d6643
Anemic hiring fell far short of expectations with 29,000 jobs added last month, but the unemployment rate remains near historic lows.

US job growth undershoots expectations in September, but labor market remains stable
https://www.reuters.com/business/us-job-growth-slows-sharply-september-unemployment-rate-rises-42-2026-10-02/
 
A Burst of New Workers in September
https://www.wsj.com/opinion/jobs-report-labor-department-labor-force-37fc91cc
The labor force grew by 485,000, and most of those found work. 

An AI-Dominated Economy?

Will America Spend 9% of Its GDP on AI? The Industry Is Counting on It
https://www.wsj.com/tech/ai/will-america-spend-9-of-its-gdp-on-ai-the-industry-is-counting-on-it-3501bb4f
To justify staggering investment sums, Americans will have to spend as much of their income on this one technology as they do on food.

AI Is Squeezing Out the Rest of the Stock Market
https://www.wsj.com/finance/investing/ai-is-squeezing-out-the-rest-of-the-stock-market-60928dd3
Expect stocks outside tech to struggle, earnings to expand more slowly and concern about credit risk to grow.

Mortgage Rates and the Housing Market

How 7% Mortgages Are Wrecking the Home-Buyer Playbook
https://www.wsj.com/personal-finance/mortgages/rising-mortgage-rates-and-record-prices-leave-home-buyers-out-of-moves-90606a4a
With prices at record highs and inventory locked up, house hunters are left with dwindling financing options.

Related:
https://www.wsj.com/economy/housing/the-stagnant-housing-market-is-about-to-face-a-7-mortgage-55a041d6

Superrich versus the Merely Rich

The Gap Between the Rich and the Very, Very Rich Is Getting Wider
https://www.wsj.com/economy/the-gap-between-the-rich-and-the-very-very-rich-is-getting-wider-5f76ab6c
The 0.1% are worth $28 trillion, or about 15% of the nation’s total wealth. The average wealth for a household in this group is over $200 million. 

The only billionaires making money this year are in tech
https://finance.yahoo.com/technology/articles/only-billionaires-making-money-tech-103000632.html

The Consequences of Bad Economic Policies

The Moves That Backfired on Trump and Drove Interest Rates and Inflation Higher
https://www.wsj.com/economy/trump-economy-inflation-jobs-724e4da8
The president’s own agenda has helped undermine promises to fix the economy and get the deficit under control.
 
Trump’s Tariffs Push Canadian Companies to Look Past American Links
https://www.nytimes.com/2026/09/28/business/trump-tariffs-canada-diversify.html
Shaken by tariffs and threats from the Trump administration, Canadian businesses are seeking markets and suppliers beyond the U.S. 

Measuring Inflation

How the Fed should measure inflation
https://www.economist.com/finance-and-economics/2026/09/24/how-the-fed-should-measure-inflation
Pinning down the underlying rate may be harder than Kevin Warsh thinks. 

A Big (and Risky) Bet on AI

The AI Build-Out Is Becoming the Biggest Economic Bet in U.S. History
https://www.wsj.com/economy/the-ai-build-out-is-becoming-the-biggest-economic-bet-in-u-s-history-c60716dd
Data-center spending is greater than that for canals, railroads and grid combined—creating jobs and stock-market wealth, while boosting inflation and crowding out housing.
 
We're All AI Investors Now, And That's Risky
https://www.fa-mag.com/news/we-re-all-ai-investors-now--and-that-s-risky-88546.html
Like it or not, we are all betting on AI taking over the economy. In the last 40 years, the U.S. has become a nation of stock investors. On the whole, it has made Americans rich. Now the stock market is soaring on the hopes that AI will make everyone more productive—and if that doesn’t work out, we all may learn the definition of a bad tail risk. 

What Happens if the A.I. Bubble Bursts
https://www.nytimes.com/2026/09/26/opinion/ai-bubble-banking-crisis-too-big-to-fail.html

Related:

The AI bubble could be worse than the dot-com bust by Vivekanand Jayakumar, The Hill - 06/16/26
https://thehill.com/opinion/finance/5925202-tech-bubble-ai-driven-growth/

Time to Buy Bonds?

A Perfect Storm Is Raging in the Bond Market
https://www.wsj.com/finance/investing/a-perfect-storm-is-raging-in-the-bond-market-43d9b44b
The benchmark Treasury yield jumped above 5.1%, posting its biggest one-day rise in more than a year.
 
It’s a Good Time to Buy Bonds
https://www.wsj.com/opinion/its-a-good-time-to-buy-bonds-94e1c93e 

The Problem Is Where Interest Rates May Go, Not Where They Are Now
https://www.nytimes.com/2026/09/25/business/interest-rates-economy-markets-inflation-mortgages.html
History shows that the markets and the economy flourished when rates were even higher than today’s. But, our columnist notes, those times didn’t last.

American Millionaires

The Wealthiest—and Stealthiest—Class in America
https://www.newyorker.com/magazine/2026/09/21/the-everywhere-millionaire-owen-zidar-and-eric-zwick-book-review
America’s everywhere millionaires built fortunes from hot dogs, car dealerships, medical practices, and convenience stores. Then they learned how to protect them.
 
The Everywhere Millionaire: Who Is Really Rich in America and How They Got There
https://www.everywheremillionaire.com 

Can US Economy Survive Higher Rates?

See the 10-Year Treasury Yield’s Wild Ride on the Road to 5%
https://www.wsj.com/finance/investing/see-the-10-year-treasury-yields-wild-ride-on-the-road-to-5-22e4bbc2
A pandemic, wars and government deficits have reshaped the bond market since the start of the decade.
 
The Silver Lining in Soaring Interest Rates: The Economy Can Handle Them
https://www.wsj.com/economy/central-banking/the-silver-lining-in-soaring-interest-rates-the-economy-can-handle-them-842e29ff
Economies around the world are showing surprising resilience to higher central bank-interest rates and government bond yields. 

Setting Prices in the Real World

American Businesses Have No Idea How to Set Prices Right Now
https://www.wsj.com/business/american-businesses-have-no-idea-how-to-set-prices-right-now-061274e0
Businesses of all stripes are struggling to predict how long high energy costs will last. 

Inflation and Price Levels

What Years of Inflation Have Done to American Prices
https://www.nytimes.com/interactive/2026/09/11/business/economy/inflation-us-prices-gas-food-tariffs.html
Nearly every category of product costs more than it would have had prepandemic trends continued. And many product prices are still rising faster than they were before. 

Sticky Wage Norms and the Real Wage Cost of Unexpected Inflation
https://www.nber.org/papers/w35624
We use a sample of administrative payroll data covering a large and nationally representative share of U.S. workers to study how wages adjusted during the recent inflation period. Most firms apply a single modal annual nominal wage increase to the majority of their workers, and these firm-level norms changed little during the recent period of unexpected inflation. As a result, nominal wages did not keep pace with prices for a large share of workers who stayed at their firms. Forty-three percent of workers continuously employed at the same firm over the four years spanning 2021–2024 experienced a real wage decline, with a mean loss of roughly nine percent among those who fell behind. Workers could escape sticky wage norms by changing employers — job-changers’ wages rose nearly one-for-one with inflation — but switching was too infrequent to matter for most. Even accounting for job-changers, 37 percent of all workers saw real wages decline over the 4-year period. Indexing firms’ modal raises one-for-one to inflation would have closed roughly 40 percent of the resulting shortfall relative to prepandemic trend. Drawing on cross-country evidence from Belgium, whose wages are automatically indexed to inflation, we show that incomplete wage indexation, rather than inflation itself, helps explain the persistence of depressed consumer sentiment during the 2021–2024 period.

Six Charts That Explain How Americans Really Feel About the Economy
https://www.wsj.com/economy/consumers/six-charts-that-explain-how-americans-really-feel-about-the-economy-2243d7da
Official data shows steady growth and low unemployment, but misses how rising costs have left many Americans behind. 

How Energy Is Driving Inflation—and How It’s Not
https://www.wsj.com/economy/how-energy-is-driving-inflationand-how-its-not-50560f6e
As diesel crosses $6, the risk is building that soaring energy costs will start to hurt far beyond gas pumps.

Backlash Against Big Tech

Big Tech Fooled America Once. The Second Time’s Not Going So Well.
https://www.nytimes.com/2026/09/10/opinion/ai-big-tech-america-politics.html

Treasury versus the Bond Market

Bond Market Rebuffs Treasury’s $6 Billion Plan to Reduce Borrowing Costs
https://www.nytimes.com/2026/09/09/business/economy/treasury-repurchase-bessent.html
 
Related:
https://www.axios.com/2026/09/10/bessent-bonds-buyback-treasury
https://www.theguardian.com/business/2026/sep/10/bond-market-higher-costs 

The Decline in the Labor Share of Income

US workers' share of GDP skids to fresh record low
https://www.reuters.com/business/us-workers-share-gdp-skids-fresh-record-low-2026-08-06/
 
Workers’ share of America’s income is at a record low before the AI boom even begins
https://fortune.com/2026/09/04/ai-productivity-labor-share/
Related: https://finance.yahoo.com/economy/articles/don-t-think-floor-workers-073000433.html
 
The Post‑COVID Decline in the Labor Share
https://libertystreeteconomics.newyorkfed.org/2026/06/the-post-covid-decline-in-the-labor-share/
 
Why Labor’s Share of Wealth Is Shrinking
https://www.nytimes.com/2026/09/07/opinion/labor-capitol-workers-income.html 

The Record Divide Between Corporate Profits and Worker Pay
https://www.wsj.com/finance/stocks/the-record-divide-between-corporate-profits-and-worker-pay-ea4c75bc
Labor’s share of economic output just hit an all-time low, while the profit share neared a record. It helps explain why consumers feel so glum. 

The Big Money in Today’s Economy Is Going to Capital, Not Labor 

https://www.wsj.com/economy/jobs/capital-labor-wealth-economy-2fcf6c2f

Soaring profits and stocks funnel more of GDP toward companies, their top employees and shareholders. AI will intensify this trend.

Can productivity boom lift US workers' record low share of GDP? Unlikely
https://www.reuters.com/markets/us/can-productivity-boom-lift-us-workers-record-low-share-gdp-unlikely-2026-02-11/

‘We deserve more’: US workers’ share of the pie dwindles

https://www.theguardian.com/us-news/article/2024/may/06/workers-income-labor-

 

“Perspectives on the Labor Share,” by Loukas Karabarbounis

https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.38.2.107

As of 2022, the share of US income accruing to labor is at its lowest level since the Great Depression. Updating previous studies with more recent observations, I document the continuing decline of the labor share for the United States, other countries, and various industries. I discuss how changes in technology and product, labor, and capital markets affect the trend of the labor share. I also examine its relationship with other macroeconomic trends, such as rising markups, higher concentration of economic activity, and globalization. I conclude by offering some perspectives on the economic and policy implications of the labor share decline.

Deciphering the Stock Market

Institutional Investors Move Markets. Here’s How to Read Their Signs.
https://www.wsj.com/finance/stocks/investors-move-markets-read-signs-b0f2cc95
Tracking a stock’s price range and volume can offer clues on when to buy a stock that’s about to climb or bail on a stock that’s primed to fall. 

The Stock Market’s Breezy Summer Is Over. Investors Beware.
https://www.wsj.com/finance/stocks/the-stock-markets-breezy-summer-is-over-investors-beware-fb110133
The Fed and inflation are back in focus as investors face down an often bumpy stretch for markets.
 
Why Stocks Are Defying Gravity and What Could Bring Them Down
https://www.nytimes.com/2026/09/08/business/stock-market-interest-rates.html
Investors are focused on strong corporate earnings and A.I., while looking past the war in Iran. But rising interest rates are an increasing risk to the rally.

Oil Prices and the 'Crack Spread'

The ‘Crack Spread’ Is Going to Make Your Life Unpleasant
https://www.nytimes.com/2026/08/19/opinion/gas-prices-crude-oil-diesel.html
Focusing on the price of crude is misleading, a bit like following the price of wheat when it’s bread that you’re actually buying. The gauge to watch is what’s called the crack spread — the difference between the cost of a barrel of crude and the prices of the refined products made from it. If you want to drill down, it’s often referred to as the 3-2-1 spread, which calculates prices when three barrels of crude are refined into two barrels of gasoline and one barrel of diesel, a typical ratio. (Cracking is the process of breaking large hydrocarbon molecules into smaller ones, which is what a refinery does.)