STRAIGHT FROM THE TRADING FLOOR
by Eric Criscuolo - Market Strategist
Published on 10/15/26 (a/o 2:00 pm)
DOW 52,133 (+511), S&P 500 7,727 (+8), Russell 2000 2,752 (+22), NYSE FANG+ 19,083 (-45), ICE Brent Crude $105.87/barrel (-$0.19), Gold $4,179/oz (+$71), Bitcoin ~82.2k (+519)
MAC Desk Commentary:
Yesterday’s hot CPI print triggered big swings in treasury yields and the AI complex sold off. The S&P 500 fell 1%, breaking a 53-session streak of the index not having at least a 1% drop. That was the longest since 2020. Small caps saw more pressure as the Russell 2000 fell almost 2%. Tech was hit hard as the NYSE Semis index fell 5%. Neoclouds/Data centers were smoked and credit concerns ramped. Anthropic had impressive timing with an Investor Day ahead of a planned IPO. Q3 revenue of ~$16.8B grew 45%, but that growth is a slowdown from Q2’s 143%, fueling the Bear narrative. Healthcare, Consumer Staples and Energy were the only sectors higher on the day. Yields had a wild ride, ripping higher immediately after the CPI data (10y +15bp) before falling all the way back. 10/30y actually finished the day down a few basis points.

S&P futures were trading modestly lower this morning ahead of PPI and Retail Sales data. PPI came in even hotter than CPI, both headline and core. Retail Sales was above expectations on the headline but the control group missed estimates. S&P futures didn’t move a whole lot on the data, trading near the levels we were at for most of the morning. What did move a lot were yields, which continued yesterday's action of declining after hot inflation data.

The S&P 500 opened lower and fell below its 50d ma, down 0.6% at its lows. It has rallied off that level and is now modestly higher. Large/mega cap tech remains under pressure but the rest of the market is holding up well as the equal-weight is up 1% and small caps up only slightly less. Only 2 sectors, Tech and Energy, are substantially lower.
Tech is lagging again with semis (especially capital equipment) and memory/storage stocks under continued pressure, but has come off its lows. AI infrastructure stocks like VRT (-6%), ETN and CAT (-3%) are also lower. Software is rallying on the AI weakness. Energy is joining Tech with a decline of ~1%, with refiners and pipeline stocks the weakest.

Healthcare is leading again today, with broad-based strength including Med Tech. Financials are strong as well, with data and service providers leading (FDS, MCO, SPGI +4%). Alternative asset /credit names are broadly higher as well. Materials are seeing solid gains too, especially home and construction-related stocks gaining along with homebuilders as rates fall.
Yields were lower ahead of the PPI and Retail Sales data. This time, yields skipped the upside feign and basically just continued lower after a brief blip. They are off their lows but 10 and 30ys are still down 10bp. Market expectations for a rate hike in October have fallen back to 27%. The US Dollar Index has followed yields lower.

  • US 2yr -6bps to 4.75%, 5yr -9bps to 4.90%, 10yr -10bps to 5.09%, 30yr -10bps to 5.43%
  • USD index: -$0.54 to $101.80
Looking more into today's day. Headline PPI rose 1.3% m/m (0.5% expected) while Core rose 0.7% (vs 0.3%). Ex-Food, Energy and Trade also accelerated from last month (0.5% vs. 0.3%). On the positive side, Final Demand Goods ex-food and energy rose 0.3%, falling from last month’s 0.4% increase. Final Demand Services jumped, rising 0.8% versus last month’s 0.2%. Trade Services, or seller margins, drove almost half the increase, indicating producers may be passing on higher costs to customers.

The other big piece of data this morning was retail sales. Overall sales rose 0.8% m/m, above estimates but below last month. The control group missed however, and despite the hot CPI print yields fell as demand and growth concerns may finally be pressing long-term yields lower, especially if questions about the sustainability of AI spending continue to grow.

We also got two regional fed reports. Empire Manufacturing came in much higher than expected. New Orders and Shipments growth jumped, while Prices Paid fell and Prices Received was slightly higher. The 6-month outlook wasn't as robust, however- though still positive.
The Philly Fed manufacturing survey missed expectations and moderated from last month, pulling back again from the recent high but still expanding. New Order growth fell while Prices Paid eased and Prices Received rose.  

Asian markets came under considerable pressure overnight as yesterday’s US tech selloff hit Asian shores. South Korea fell over 7% with another circuit breaker triggered. Samsung and SK Hynix fell about 10% each locally. The Nikkei dropped almost 5% with Softbank, Kioxia and Advantest down 10-15%. Major domestic buyers have discussed plans to return to the JGB market, including MUFG and major Japanese asset managers and insurance funds. Losses were less severe in China with Hong Kong and Shanghai down over 1%. TSMC is down 2% in the US after reporting full results after the Taiwanese market closed (the company reports monthly revenue previously). Demand surged and full year revenue growth guidance was raised to 44% from 40% prior. The company is moving “full speed ahead” with capacity expansion, eyeing US expansion beyond Arizona, potentially Texas. India was an outlier as its large IT services sector rallied as tech/AI stumbled. Jio Platforms is expected to make the country’s largest ever IPO next week. Major European indices ended higher with defensive sectors outperforming. UK GPD rose in August and Industrial Production was better than expected. European Industrial Production fell more than expected, however. The European Council is meeting to discuss the China overcapacity issue, among other items so we could see some geopolitical headlines.
Brent crude is flat with hostilities continuing in the Middle East. Ukraine President Zelensky said strikes on Russian refineries would resume, more ships were hit by Iran missiles and the Houthis fired missiles at Yemen's Presidential Palace according to reports. CNN reported the US was considering using the MOAB, largest non-nuclear bomb in the US arsenal- known as the “mother of all bombs”, in Iran if military strikes resume.

Precious metals are higher by 1-2%, recouping some of yesterday’s losses with the Dollar weakening. Ag is mostly lower after this afternoon's NOPA report. Crypto is modestly higher. Bitcoin fell below its 50d ma and broke $80K before rebounding. 
Tomorrow is a monthly options expiration, which could be pushing equities around. Data will include Im/Ex prices, Industrial Production, rig count and the monthly budget statement, along with more bank earnings and TIC flows after the close. Fed Chair Warsh will speak at the IMF meeting later tonight.

Earnings:
  • After-Market: AA, CNS, IBKR, JBHT
  • Pre-Market (Friday): CFG, MTB, RF, TFC, TRV

Economic Data:
US:
  • PPI m.m / y.y: 1.3% / 6.3% vs 0.5% / 5.3% cons, prior 0.5% / 5.6%
  • Core: 0.7% / 5.0% vs 0.3% / 4.4% cons, prior 0.2% / 4.8%
  • Retail Sales m.m: 0.8% vs 0.3% cons, prior 1.3%
  • Control group: 0.1% vs 0.3% cons, prior 1.2%
  • Initial Claims: 199K vs 200K cons, prior 198K
  • Continuing claims: 1710K vs 1710K cons, prior 1714K
  • Empire Manufacturing: 25.5 vs 10.3 cons, prior 7.6
  • Philly Manufacturing: 20.9 vs 28.4 cons, prior 37.8
  • Business Inventories: 0.4% vs 0.4% cons, prior 0.9%
  • EIA Natural Gas inventories: 67Bcf vs 76Bcf cons, prior 85Bcf
  • EIA crude inventories: -8.557M vs -0.3M cons, prior -3.186M
  • 4:30pm Fed Hammack speech
  • 4:30pm Fed Balance Sheet 
Global:
  • Japan Machine orders m.m: 5.2% vs 2.3% cons, prior -3.7%
  • China new loans: CNY1080B vs cons CNY975B, prior CNY60B
  • Australia employment: -39.3K vs 20K cons, prior 39.5K
  • UK GDP: 0.1% vs -0.1% cons, prior 0.4%
  • UK Industrial Production y.y: 1.6% vs 0.7% cons, prior 0.8%
  • EU Industrial Production y.y: -1.1% vs -0.1% cons, prior -0.3%
STRAIGHT FROM THE TRADING FLOOR
by Eric Criscuolo - Market Strategist
Published on 10/15/26 (a/o 9:00 am)
Good morning,
 
Yesterday’s hot CPI print triggered big swings in treasury yields and an AI-sell off. The S&P 500 fell 1.1%, breaking the 53-session streak of the index not having at least a 1% drop. That was the longest since 2020. Small caps saw more pressure as the Russell 2000 fell almost 2%. Tech was hit hard as the NYSE Semis index fell 5%. Neoclouds/Data centers were smoked and credit concerns ramped. Anthropic held an Investor Day ahead of a planned IPO. Q3 revenue of ~$16.8B grew 45%, but that growth is a slowdown from Q2’s 143%, fueling the Bear narrative. Healthcare, Consumer Staples and Energy were the only sectors higher on the day. Yields had a wild ride, ripping higher immediately after the CPI data (10y +15bp) before falling all the way back. 10/30y actually finished the day down a few basis points.
 
S&P futures were trading modestly lower this morning ahead of PPI and Retail Sales data. PPI was even hotter than CPI. Headline rose 1.3% m/m (0.5% expected) while Core rose 0.7% (vs 0.3%). Ex-Food, Energy and Trade also accelerated from last month (0.5% vs. 0.3%). On the positive side, Final Demand Goods ex-food and energy rose 0.3%, falling from last month’s 0.4% increase. Final Demand Services jumped, rising 0.8% versus last month’s 0.2%. Trade Services, or seller margins, drove almost half the increase, indicating producers may be passing on higher costs to customers. The other big piece of data this morning was retail sales. Overall sales rose 0.8% m/m, above estimates but below last month. The control group missed however, and despite the hot CPI print yields fell. The market may be pivoting to pricing in a growth slow down. S&P futures didn’t move a whole lot on the data, trading near the levels we’ve been at for most of the morning.
 

 
It’s notable that Treasury yields, which were a few bp lower pre-data, have continued moving lower despite the hot PPI. The soft sales control group print, potential for further rate hikes and questions around AI raise questions around a general slowdown and put Treasuries at a more attractive position than risk assets. Fed speakers Bowman and Daly downplayed the need for an October hike yesterday. The US Dollar Index continues to track yields lower, down about 0.5%. 
  • US 2yr -7bps to 4.73%, 5yr -12bps to 4.88%, 10yr -13bps to 5.06%, 30yr -13bps to 5.39%
  • USD index: -$0.46 to $101.88
Asian markets came under considerable pressure overnight as yesterday’s tech selloff in the US hit Asian shores. South Korea fell over 7% with another circuit breaker triggered. Samsung and SK Hynix fell about 10% each. The Nikkei dropped almost 5% with Kioxia and Advantest down over 10%. Major domestic buyers have discussed plans to return to the JGB market, including MUFG and major Japanese asset managers and insurance funds. Losses were less severe in China with Hong Kong and Shanghai down over 1%. Taiwan’s TSMC is down 4% in the US pre-market after reporting full results after the local market closed (the company reports monthly revenue previously). Demand surged and full year revenue growth guidance was raised to 44% from 40% prior. The company is moving “full speed ahead” with capacity expansion, eyeing US expansion beyond Arizona, potentially Texas. India was an outlier as its large IT services sector rallied as tech/AI stumbled. Jio Platforms is expected to make the country’s largest ever IPO next week. European equities are mixed, with Germany lower and France, UK positive. UK GPD rose in August and Industrial Production was better than expected. European Industrial Production fell more than expected, however. The European Council is meeting to discuss the China overcapacity issue, among other items so we could see some geopolitical headlines.  
 

 
Brent crude is down 1% despite hostilities continuing in the Middle East and CNN reporting the US was considering using the MOAB, largest non-nuclear bomb in the US arsenal- known as the “mother of all bombs” in Iran.  Precious metals are higher by 1-2%, recouping some of yesterday’s losses. Ag is on either side of unchanged and crypto is lower with Bitcoin and Ether down 2-3%, with Bitcoin testing its 50d ma for support.
 

 
Earnings:
  • After-Market (Wed): EQBK, HOMB  
  • Pre-Market: BNY, CMC, FHN, MAN, MRSH, PLD, PNC, SCHW, USB
  • After-Market: AA, CNS, IBKR, JBHT
Economic Data:
US:
  • PPI m.m / y.y: 1.3% / 6.3% vs 0.5% / 5.3% cons, prior 0.5% / 5.6%
    • Core: 0.7% / 5.0% vs 0.3% / 4.4% cons, prior 0.2% / 4.8%
  • Retail Sales m.m: 0.8% vs 0.3% cons, prior 1.3%
    • Control group: 0.1% vs 0.3% cons, prior 1.2%
  • Continuing claims: 1710K vs 1710K cons, prior 1714K
  • Initial Claims: 199K vs 200K cons, prior 198K
  • Empire Manufacturing: 25.5 vs 10.3 cons, prior 7.6
  • Philly Manufacturing: 20.9 vs 28.4 cons, prior 37.8
  • 10:00am Business Inventories
  • 10:30am EIA Natural Gas inventories
  • 12:00pm EIA crude inventories
  • 12:00pm NOPA Crush
  • 4:30pm Fed Hammack speech
  • 4:30pm Fed Balance Sheet
Global:
  • Japan Machine orders m.m: 5.2% vs 2.3% cons, prior -3.7%
  • China new loans: CNY1080B vs cons CNY975B, prior CNY60B
  • Australia employment: -39.3K vs 20K cons, prior 39.5K
  • UK GDP: 0.1% vs -0.1% cons, prior 0.4%
  • UK Industrial Production y.y: 1.6% vs 0.7% cons, prior 0.8%
  • EU Industrial Production y.y: -1.1% vs -0.1% cons, prior -0.3%

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