Good News, Higher Long Yields
Cooler inflation and a softer Fed could not stop the 30-year yield from making a new high, so rate hopes no longer lift stocks, and selling is now concentrating in health care.
The Signal
The Fed's preferred inflation gauge came in cooler than expected, private payrolls beat, and New York Fed President Williams saw no urgency to hike in October, cutting the odds of another hike to roughly a coin flip. Stocks rose by mid-morning, then gave it all back: the S&P 500 closed slightly lower, the Dow fell hard and only the Nasdaq gained. The 30-year Treasury yield still closed at a new high, and Brent climbed back toward $100 on Iran supply risk. Technology was the only part of the market up in September. After the close, Micron reported about $54bn of quarterly revenue, far above estimates, and guided higher; the stock barely moved after hours.
The Noise
The tape still trades as if rate-cut hopes drive stocks, but a dovish surprise that fails to lower long yields says the pressure is supply and term premium, not the Fed. Selling widened for a third straight session, with sellers outnumbering buyers more than three to one, while a few large tech names hold the index up. Tuesday's burst of bullish utility signals, flagged here as one rate bet, gave back about half its move today as the long bond hit its new high.
Multi-Signal Confluence
Autodesk is the cleanest bullish setup outside utilities: a fresh higher low, a turn higher on today's bar, and buying interest rising against a selling tape. Its fiscal Q2 revenue grew 16% to just over $2bn and it raised full-year growth guidance to 15-16%. Caveat: the trend is still down and fair value is only about 2% above the price.
Agilent shows the health care distribution pattern: a new high with hot momentum while money quietly leaves, trading above fair value. Half of the scan's fresh bearish flow warnings are health care names. Its fiscal Q3 revenue rose about 8% and guidance went up, so this is a crowding warning, not a short.
Aon has the deepest discount in the scan, with fair value about 22% above the price. Brokers have struggled since a February AI-disruption scare, yet Aon's spring report showed revenue up about 6% and EPS up 14%. Caveat: it is still in a downtrend with money flowing out, a counter-trend idea only.