Macrolyzed

This week

written Oct 9, 2026 · updated weekly

High safe yields favor cash, TIPS and after-tax munis; expensive, narrow US stocks, long bonds and rate-sensitive assets stand to lose if rates keep rising.

4 things to know
Safe yields now beat what stocks are priced to return, and after tax, munis edge Treasuries in top brackets.
  • Stocks' real extra return over TIPS is -0.47%: the 2.46% ten-year earnings yield is below the guaranteed 2.9% 10-year real yield (TIPS).
  • Tax-free muni yield (national) of 3.40% matches about 5.4% taxable in the top federal bracket, edging the 5.3% 10-year Treasury; state funds add more.
  • Caveat locking long yields risks price losses if rates rise further; a 30-year bond loses roughly 15% of its price per point of yield rise.
The Fed raised rates into a stalling job market, with an oil shock keeping inflation above its target.
  • Fed's policy rate rose to 3.8% in September, the first hike since 2023, with inflation (PCE, yearly) at 3.7% against a 2% target.
  • Total jobs (nonfarm payrolls) added just 29,000 in September; the quits rate at 1.9% says bargaining power sits with employers.
  • Oil (WTI) at $92 is up 60.2% year-to-date on a supply shock; gasoline at $4.35 a gallon is up 54.9% year-to-date.
Rising long yields are repricing everything rate-sensitive at once: bonds, small stocks, property and mortgages.
  • The 10-year Treasury yield at 5.3%, up 47 basis points (hundredths of a percent) in a month, is its highest since 2002.
  • One month: broad bond fund -2.1%, US small companies -3.6%, real estate funds (REITs) -5.4%, 30-year mortgage rate up 57 basis points to 7.3%.
  • Cash (3-month Treasury yield) pays 4.2% against 3.7% inflation: a real return while waiting, rare over the last twenty years.
Index gains sit in a few large tech companies while most stocks fall, and the calm fear gauge hides it.
  • Tech-heavy stocks (Nasdaq-100) rose 5.9% in a month while US small companies fell 3.6%, mid-size 2.1% and developed-world ex-US 3.3%.
  • An S&P 500 index fund is increasingly a bet on that handful of companies, not the broad economy.
  • Market fear gauge (VIX) at 15.7 is calm, below its 10-year average of 18.7, despite the correction beneath the surface.
Indicator As of Latest 1Y change vs avg History This week
US stock market (S&P 500) Stocks 10/8/26 7,765 ▲ +15.3% +86.0%
A few AI-linked giants carry the indexes while most stocks fall, and valuations leave no cushion over safe bonds.
  • S&P 500 up 2.2% and Nasdaq-100 up 5.9% in a month on AI-related stocks; 83% of S&P members trade over 10% below their 52-week highs.
  • Shiller CAPE (10-year P/E) at 40.6 versus a long-run average near 17; readings above 30 have preceded a decade of below-average returns.
  • Earnings yield on 10-year profits at 2.46% sits below the 2.9% 10-year real yield (TIPS): stocks are priced to return less than safe bonds.
  • Market fear gauge (VIX) at 15.7 is calm; insurance against a swing is cheap by the market's own pricing.
Tech-heavy stocks (Nasdaq-100) Stocks 10/8/26 30,726 ▲ +22.4% +125.4%
Market fear gauge (VIX) Stocks 10/9/26 15.2 ▼ -29.7% -18.4%
US mid-size companies Stocks 10/8/26 $73.0 ▲ +13.6% +58.6%
US small companies Stocks 10/8/26 $137.3 ▲ +17.9% +53.7%
Developed-world stocks (ex-US) Stocks 10/8/26 $69.9 ▲ +18.9% +68.3%
Emerging-market stocks Stocks 10/8/26 $59.1 ▲ +10.9% +49.7%
Shiller CAPE (10-year P/E) Stocks September 2026 40.6 ▲ +5.2% +24.8%
Earnings yield on 10-year profits (CAPE) Stocks September 2026 2.46% ▼ -13 bps -66 bps
Stocks' real extra return over TIPS Stocks September 2026 -0.47% ▼ -126 bps -283 bps
Private equity (listed funds) Stocks 10/8/26 $55.90 ▼ -14.1% +19.9%
Corporate profits growth Stocks Q2-2026 26.6% ▲ +2,745 bps +1,880 bps
Corporate profit margins Stocks Q2-2026 13.1% ▲ +211 bps +226 bps