Joining The Party.

A distinct lack of meaningful economic data or earnings reports during the week put financial markets at the mercy of the newsflow surrounding the Iran war, US domestic politics a month away from the midterms and European economic woes, particularly in France, which is beginning to look like Greece circa 2010 with local interest rates having surged from 3.50% in late June to 4.90% today. Stocks meandered higher on Monday with the price of Nvidia reaching a new all-time high and closing in on a valuation of $6 trillion barely a year after first breaking through $4 trillion, which is particularly astonishing when you consider that just six months ago it was floundering at down 11% for the year. Wall Street’s concerns about an October Fed Funds Rate hike continued to recede following the previous week’s cool Jobs Report. The session’s gains were enough for the NASDAQ-100 to score its 23rd all-time record high of 2026. Bond traders took a break from turbo-charging interest rates on Tuesday and stocks reacted positively with the NASDAQ-100 adding weight to its record level and the S&P 500 closing above 7800 for the first time ever and joining the party by reclaiming its own new all-time record high for the 27th time this year. An intensification of Iranian attacks on shipping in the Strait of Hormuz and increased Houthi activity in Saudi Arabia and the Red Sea on Wednesday dramatically reversed the recent steady drift lower in oil prices. Interest rates resumed their climb with the highly impactful 10-Year Treasury rate reaching its highest level in 24 years. The minutes from the Federal Reserve’s last meeting confirmed what we all knew, that the FOMC is strongly leaning towards another quarter-point rate increase on either October 28th or December 9th this year, although the probabilities strongly favor the latter over the former. This all dampened enthusiasm for stocks, especially in the case of the more interest rate-sensitive Small Caps and the indexes retreated from their record levels. The Q3 earnings season kicked off on Thursday with uninspiring results from PepsiCo and then Delta Airlines, but things properly ramp up this week with the big banks reporting. Stocks continued to be vulnerable to gravity from the newsflow, particularly a revitalized surge in energy prices resulting from increased Middle East tensions and infuriatingly contradictory messaging around when or even whether the US will resume its bombing campaign in Iran. A Financial Times report cast doubt over OpenAI’s revenue claims, sending tremors through the Big Tech/AI ecosystem. This rattled the stock indexes which sank further. A number of speeches from Fed officials heavily implied to markets that an interest rate hike later this month is off the table (see INTEREST RATE EXPECTATIONS below) although we do have some inflation data coming out between now and then and this, along with a pause in the rise in oil prices and a welcome drop in long term interest rates, led to a stock rebound on Friday with the indexes closing the session nicely higher. For the week, the S&P 500 and NASDAQ-100 large cap indexes closed higher but US small caps and international stocks finished lower. Some other things I’m thinking about .. * Q4 of midterm election years are historically very lucrative for stock investors with far higher levels of expected return than in other years. Since the 1950s, the S&P 500 has averaged a bounce-back of 31.8% from its low point in a midterm year. Every single midterm election since 1946 has been followed by positive one-year returns in stock prices. * The early-year pace-setters, US Small Cap and international stocks, continue to seriously lag US Large Cap performance over recent weeks and months (see LAST WEEK BY THE NUMBERS below) with rejuvenated Mega Cap Tech driving this most recent rally; notably Nvidia, Microsoft and Apple. * These three stocks now collectively comprise over 21% of the weighting of the S&P 500 index, the highest representation by any three stocks in history. With this kind of heavy concentration, it only takes a handful of winners to generate outperformance of the index itself versus the average stock inside the index. Equally, a downturn in performance in just a tiny handful of stocks could send the overall indexes tumbling. Anglia Advisors clients are now able to access customized model portfolios in managed investment accounts which exclusively use ETFs, many of which carry no management fee - contact me for more details. If you are not yet a financial planning or investment management client of Anglia Advisors and would like to explore becoming one, please feel free to reach out to arrange a complimentary no-obligation discovery call with me. ARTICLE OF THE WEEK: Treasury Secretary Scott Bessent continues live in his own little fantasy world, making ridiculously happy-clappy claims and predictions in recent weeks and months (which have all proved to be dead wrong) purely to try and bolster Trump’s collapsing approval ratings and shattering his credibility with financial markets. That is not a good thing. .. AND I QUOTE: “Tell people how the bicycle is ridden, not necessarily how the bicycle’s been built.” Jennifer D. Morgan, author of “Hearts, Minds And Wallets” and founder/CEO of Connective Communication. LAST WEEK BY THE NUMBERS: * SPY is a US Large Cap ETF that tracks the S&P 500 index, made up of 500 stocks from a universe of the largest US companies. * Up by 1.2% last week * Up by 2.7% over the past month * Up by 3.9% over the last three months * Up by 14.2% so far this year * QQQ is a US Large Cap ETF that tracks the NASDAQ-100 index, made up of the largest 100 non-financial companies listed on the tech-heavy NASDAQ exchange. * Up by 0.2% last week * Up by 6.0% over the last month * Up by 5.6% over the last three months * Up by 22.3% so far this year * IWM is a US Small Cap ETF that tracks the Russell 2000 index, made up of the bottom two-thirds in terms of company size of a universe of 3,000 of the largest US stocks. * Down by 0.9% last week * Down by 3.0% over the last month * Down by 5.0% over the last three months * Up by 13.3% so far this year * VXUS is an International Non-US ETF that tracks the MSCI ACWI Ex-US index, made up of over 8,500 of the largest names from a universe of stocks issued by companies from around the world excluding the United States, in both developed and emerging markets. * Down by 0.7% last week * Down by 1.7% over the past month * Up by 1.2% over the last three months * Up by 12.4% so far this year * BRENT CRUDE OIL .. $104.54 (up by 1.9% last week) * GOLD .. $4,220 (up by 1.2% last week) * BITCOIN .. $ 82,645 (down by 2.6% last week) Data courtesy of finviz.com as of Friday’s close. S&P 500 INDEX: WALL STREET ANALYSTS’ 2026 YEAR-END PRICE TARGETS: Average: 7,970 .. 2.0% above Friday’s close of 7,812 (last week: 3.2% above) Data courtesy of LSEG Datastream. AVERAGE 30-YEAR FIXED MORTGAGE RATE: 7.48% Data courtesy of Mortgage News Daily which calculates a daily average 30-year fixed mortgage rate from several different sources including surveys from Mortgage News, Freddie Mac, the Mortgage Bankers Association and the Federal Housing Finance Agency. INTEREST RATES: * FED FUNDS RATE * 3.875% (3.875% a week ago) * PRIME RATE ** 7.00% (7.00% a week ago) * 3 MONTH TREASURY 4.25% (4.19% a week ago) * 2 YEAR TREASURY 4.80% (4.83% a week ago) * 5 YEAR TREASURY 5.02% (5.06% a week ago) * 10 YEAR TREASURY *** 5.24% (5.28% a week ago) * 30 YEAR TREASURY 5.60% (5.63% a week ago) Data courtesy of the Federal Reserve and the Department of the Treasury as of Friday’s market close. * Decided upon by the Federal Reserve Open Market Committee at periodic meetings 8x a year. Used as a basis for overnight interbank loans and for determining high yield savings interest rates. ** Wall Street Journal Prime Rate as of Friday’s close. Moving in lockstep with the Fed Funds interest rate, this measure is used as a basis for determining certain consumer loan interest rates such as credit cards, auto loans, personal loans, home equity loans/lines of credit and securities-based lending. *** Used as a basis for determining mortgages. INTEREST RATE EXPECTATIONS: Where will the Fed Funds interest rate be after the next rate-setting meeting on October 28th? * 0.25% higher than now .. 17% probability (22% a week ago) * Unchanged from now .. 83% probability (78% a week ago) * 0.25% lower than now .. 0% probability (0% a week ago) What is the most commonly-expected number of 0.25% Fed Funds interest rate changes over the next twelve months? * 3 increases, 34% probability (a week ago: 3 increases, 32% probability) Data courtesy of the CME FedWatch Tool and is derived from futures market pricing as of Friday’s market close based on the current Fed Funds interest rate of 3.875%. FEAR & GREED INDEX: “Be fearful when others are greedy and be greedy when others are fearful.” Warren Buffett. Data courtesy of CNN Business as of Friday’s market close. The Fear & Greed Index from CNN Business can be used as an attempt to gauge whether or not stocks are fairly priced and to determine the mood of the market. It is a compilation of seven of the most important indicators that measure different aspects of stock market behavior. They are: market momentum, stock price strength, stock price breadth, put and call option ratio, junk bond demand, market volatility and safe haven demand. Extreme Fear readings can lead to potential opportunities as investors may have driven prices “too low” from a possibly excessive risk-off negative sentiment. Extreme Greed readings can be associated with possibly too-frothy prices and a sense of “FOMO” with investors chasing rallies in an excessively risk-on environment . This overcrowded positioning leaves the market potentially vulnerable to a sharp downward reversal. WWW.ANGLIAADVISORS.COM | [email protected] | CALL OR TEXT: (646) 286 0290 | FOLLOW ANGLIA ADVISORS ON INSTAGRAM This material represents a highly opinionated, speculative assessment of the financial market environment based on assumptions and prevailing information and data at a specific point in time and is always subject to change at any time. Although the content is believed to be correct at the time of publication, no warranty of its accuracy or completeness is ever given. It is never to be interpreted as an attempt to forecast any future events, nor does it offer any kind of guarantee whatsoever of future results, circumstances or outcomes. The material contained herein is not necessarily complete and is also wholly insufficient to be relied upon as research or investment advice or as a sole basis for any financial determinations, including investment decisions or making any kind of consumer choices, without further consultation with Anglia Advisors or other qualified Registered Investment Advisor. The user assumes the entire risk of any decisions made or actions taken based in whole or in part on any of the information provided in this or any other content published by Anglia Advisors. Under no circumstances is any such content ever intended to constitute tax, legal or medical advice and should never be taken as such. Neither the information contained nor any opinion expressed herein constitutes a solicitation for the purchase of any security or asset class. No formal client advice may be rendered by Anglia Advisors unless and until a properly-executed client engagement agreement is in place. Posts may contain links or references to third party websites or may post data or graphics from them for the convenience and interest of readers. While Anglia Advisors might have reason to believe in the quality of the content provided on these sites, the firm has no control over, and is not in any way responsible for, the accuracy of such content nor for the security or privacy protocols that external sites may or may not employ. By making use of such links, the user assumes, in its entirety, any kind of risk associated with accessing them or making use of any information provided therein. Those associated with Anglia Advisors, including clients with managed or advised investments, may maintain positions in securities and/or asset classes mentioned in this post. Anglia Advisors has updated its Privacy Policy. You can view the latest version here. If you enjoyed this post, why not share it with someone? This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit simonbrady.substack.com