In this September 10, 2026 morning briefing, Kenny Polcari delivers a rapid-fire market update covering recent Treasury bond auctions, rising oil prices, upcoming Producer Price Index (PPI) data, and expectations for the Federal Reserve’s next FOMC meeting. He explains the 10‑year and 30‑year yield movements, Treasury’s increased buyback program, and the implications for liquidity and long‑term price discovery. Polcari links the oil price surge to broader inflation pressures and outlines how the data could affect equities, noting the recent declines in the Dow, S&P, Nasdaq, and Russell, and highlighting sector‑specific performance. He previews the August PPI release, the forthcoming CPI, and the Fed’s likely rate hike, while offering risk‑management advice for investors. The briefing also covers Apple’s new iPhone 18 Pro and the first foldable iPhone Duo, detailing pricing, the new A20 Pro chip, and the market’s reaction. Gold price movements and European ECB rate‑hike speculation are mentioned. Polcari adds a personal touch with a weather note, a detailed spaghetti aglio e olio recipe, and a promotional call‑to‑action for complimentary portfolio reviews via slaystone.com.
Chapters
Well, good morning. It's me, Kenny Polcari, your host of the party. And today is Thursday, September 10th, 2026. And here are the things you need to know to get your day started. Well, yesterday's bond auction went well. We're going to discuss that in a moment. Today we're going to deal with the 30-year bond auction. Oil, well, that continues to surge, and today we're trading better than $97 a barrel. PPI comes out at 8:30 this morning. The FOMC meeting announcement is next Wednesday. And what do we have in debt tonight? We're going to You have the spaghetti all'olio, right? Which is spaghetti with garlic and oil. It's a simple but delicious dish. Dish. Okay, well, good morning. The temperature continues to rise, and that means it's getting hot in here. WTI surged, closing at $96 a barrel yesterday, and Brent, well, that punched up into $100 a barrel. Bond yields pushed higher. The 10-year closed with a yield of 4.847, up from Friday's 4.8. And stocks, well, they fell once again. The Dow down 0.8%, the S&P down 0.5%, the NASDAQ down 0.6%, the Russell lost 1.3%. You can think higher yields, right? Because SMIDs are so much more dependent on the cost of money. And guess what? The cost of money went up, so SMIDs typically go down. The trade splits gave up 1.1%. You can think higher oil and diesel. We discussed that at length in yesterday's note. The equal-weighted S&P lost 1%, while the Mag 7, that actually bucked the trend and it rose by 56 points. And you could, you can argue that that makes some sense since it's the worst performing of all the indexes for the year. It's only up 5.6%. It's really struggled all year. And as we discussed yesterday, all eyes were on the bond market to see how well or not the $39 billion 10-year auction was going to go. And remember when I told you the bond market was going to speak at 1 PM? Well, it spoke, and apparently 4.8% yield was not enough. You see, the auction settled at 4.834%, up from Friday's 4.8%. Yes, demand was solid and deals were left holding a smaller than normal share, but don't misunderstand the message. They had to offer a higher yield, which means lower prices, To stimulate that demand. In fact, prior to the auction, the 10-year yielded as much as 4.86% as investors tested the market. And now, right, the Treasury's patting themselves on the back because the yield settled below the high of the day. And that is the story. It's really, it's all about semantics, right? Because who's kidding who? It was lower prices and higher yields that brought the buyers to the table. Think about it like this. You're trying to buy a house, right? It's offered at $1 million. It's overpriced in the neighborhood, right? It's just sitting there, it's not selling. But when the seller decides that they need to get out, they need to make it happen, what do they do? They cut the price. So now the guy cuts the price to $900,000, suddenly there's a bidding frenzy, buyers tripping over each other to buy the house, and ultimately it sells for $950,000 because of the frenzy. The seller gets to say, Oh, the sale price was $50,000 more than the offering price. See how that works? Now, yes, it's true, but it's also $50,000 less than the original price. So which is, which is the more bullish story? And you can argue all day long about how it was overpriced to begin with, but remember, it's all about what the market will bear. 2 years ago, that same house might have sold for $1.2 million because the environment was different. And that is the story of the markets. What is the environment right now is the question we're asking. Today we're going to find out whether they're willing to do it again when the Treasury sells $22 billion of 30-year paper. Now, on Friday, 30-year yields were 5.24%. This morning, the same yield is now 5.3%. That's up 6 basis points in 3 days. So let's see how this ends up today. And remember, 5.33% was the high. On August 18th, 2026. And if that wasn't enough, Scotty Bessen came out and did what? Well, he announced that the Treasury tripled the planned buyback of the 10 to 20-year debt from $2 billion to as much as $6 billion. So what does that tell you? They're clearly trying to prove it— improve liquidity. They're trying to calm the long end of the curve down and prevent an orderly sell-off from becoming a disorderly one. And that's fine because that's part of the Treasury's job. But here's the point: Scotty can influence the plumbing. He cannot dictate the market clearing price. As my friend David Kudlow, CEO and CIO at Main Street Capital, said yesterday on his Twitter feed, and I quote, one can manipulate markets over the short term. However, over the longer term, after, after the shenanigans, markets will seek True price discovery. Exactly, which is why I said yesterday, strap in. Now, you can temporarily improve liquidity and slow any disorderly move, but you can't control what happens at the long end of the curve. He can't control what happens at the long end of the curve for very long. And the oil story only adds to the drama. This morning, WTI is up 1.6%, or $1.50, now trading at $97.60 a barrel. And let's be honest, this isn't about oil anymore. This whole story, it's an inflation story, it's a Fed story, it's a bond market story, and ultimately it becomes the stock market story. Kind of feels like a storm is brewing, doesn't it? And today we're going to get the August PPI, and we discussed that yesterday. It's going to come in hot, hot, and hot. Both month-over-month and year-over-year figures are up over last month. The question now is, will it be even hotter than those expectations? If it is, it's not good. If it isn't, that's better but not great. Tomorrow's all about the CPI, and that's expected to be benign, which, as I said yesterday's note, it's a bit curious, but let's see. And then next week is the FOMC announcement, and as you know, the market's expecting a rate hike. I am not, and I can feel the sweat already rolling down my back. Oh. Boy, wait till next Wednesday. And then there was Apple. Johnny Ternus, the new CEO, came out with a bang. You can say bye-bye to Timmy. He's gone. Yesterday at the Surprise and Shine event at Apple, he unveiled their newest iPhone 18 Pro lineup and finally their first foldable phone, the iPhone Duo. The Duo starts at $2,000, actually $1,999 to be exact, while the 18 Pro starts at $1,199, $100 more than last year's premium model. as rising memory and component costs are getting passed along to the consumer. Under the hood, the new A20 Pro chip is designed to deliver more power, better battery life, and importantly, more on-device AI capability. And that is the story. The foldable phone will get all the headlines, and at $2,000, it's gonna— it better fold my laundry and do my dishes. But for investors, the bigger question is whether Apple can finally turn all of this AI talk into something that consumers will actually use and want and ultimately pay for. Pre-orders start Saturday with the phones hitting shelves around September 18th. Yesterday, Apple closed at $315.24, down $0.89. This morning it's quoted up by $3 at $318.70, $318.90. Gold closed at $4,000— um, gold closed up $46 yesterday at $4,402. This morning it's down $7 at $4,395, and it remains trapped in this 4,340, 4,530 trading range. Let's see how today's PPI and the 30-year bond auction goes because that's going to help determine where it goes next. Remember, the Fed is in blackout mode and the whole group has gone dark. So look for Goldie or Nikki T of the Wall Street Journal to spill the beans if there are any to spill. And by spill the beans, I mean announce an FOMC mood move that is going to be different than what the market expects ahead of Wednesday's formal announcement. That's if somebody leaks, and my guess is if it happens, not going to be Kevvy. US futures are mixed. Dow futures up 102, the S&P's up 8, NASDAQ's down 46, while the Russell's up 3. European markets are lower today. The ECB announcing, uh, a rate hike is on the table, but the bets certainly go both ways. Will they or won't they? Sit tight because we're about to find out. I think it's— I think the bulk of the bet says yes, but let's see. Remember, September is historically one of the most difficult months of the year for stocks, but that does not mean you bail on your portfolio. But you should be comfortable in what you own and are able to ride out the storm that comes, if it comes. Remember, a pullback in high-quality names is a longer-term opportunity. Currently, The S&P is down 2.5% off its high. The NASDAQ's down 3.6% off its high. Now, yes, could we see more pressure if the data doesn't cooperate? Of course. A 10 to 12% pullback, by the way, would not be out of the question. And yes, some sectors are more sensitive and may get hit harder than 10 to 12%, which speaks to knowing what you own and why you own it and where you are on the risk scale and where you are in the life cycle. But for now, the economy remains strong. There is nothing weak about it. Keep in mind that, remember, no matter what, there's always an opportunity. Now, if you'd like to discuss the goals and evaluate the risk in your portfolio or get a second opinion, feel free to give me a call at 561-931-0190. Better yet, go to the website, slaystone.com, and just click on the Connect link and the email will come straight. I'm always happy to provide you with a complimentary portfolio review and overall risk assessment in the portfolio. Okay, so now what are we having dinner tonight? We're gonna have the spaghetti all'olio, right, which is really spaghetti with garlic and oil. It's a simple dish, but it's one of my favorites. It is a classic Italian pasta dish, and it hails from the region of Abruzzo. Abruzzo borders the region of Lazio to the west, the Adriatic to the east, Marche to the north, and Molise to the southeast. east. The capital of Abruzzo is L'Aquila, the city that got hit by the earthquake on April 6th, 2009. The damage was tremendous. Much of the capital city was destroyed. There were over 150 kilometers though of beaches along the east coast of Abruzzo along the Adriatic, and the scenery is spectacular. To the west, you're going to run into the Apennine Mountains, which creates one of the most mountainous regions In all of Italy. The climate, well, it varies from warm and sunny on the coastline to the Alpine climate deep into the mountains, which is a little bit less warm. Now, for this, you're going to need a pound of spaghetti. You're going to need at least 8 to 10 cloves of thinly sliced garlic. You need olive oil, fresh grated Parmigiano-Reggiano cheese. You need chopped Italian parsley and red pepper flakes, optional, but yes, and salt and pepper. You want to begin by bringing a pot of salted water to a rolling boil, and then you're going to add the spaghetti, right? Because it's going to take 10 minutes to bring the water to a boil and then another 8 minutes to boil the spaghetti. While that's happening, in a large cold sauté pan, you're going to add half a cup of olive oil and the sliced garlic. Now turn the heat up to medium-high and sauté the garlic. Here's the trick: you do not want to burn the garlic. You want to toast it. Once the oil is hot and the garlic begins to sizzle, turn the heat to simmer and continue to stir it, allowing the garlic to burn. Once it's toasted, and you'll see it'll have a nutty brownish color, add 1 ladle of the pasta water and turn the heat off. This will stop the, the garlic from continuing to cook. In the meantime, the pasta now should be done. You want it al dente, right? You don't want it mushy. You want a little bit of a bite. You want to strain it. You want to reserve a mug full of water, or you can use your tongs and just move it right in. Put the spaghetti in the sauté pan with the garlic and oil. Toss it. Toss in 2 handfuls. of the grated Parmigiano-Reggiano and the chopped parsley. Toss it, mix it well. You can serve it immediately, offering more fresh grated cheese to your guests, right? If you sense that it's drying, it's getting a little bit too dry, you can feel free to add back a bit more of the pasta water just to keep it moist. You don't want to drown it, you don't want it soupy, you just want it moist. And obviously the red pepper flakes, uh, if you're going to use them, uh, you could add them here. In any event, It's kind of a cloudy day here in Florida this morning. We've already had a little bit of rain early on, and it's, and it's very humid out, so I suspect we're going to get more rain today. But in any event, until tomorrow, take good care.
