Rates and Crude Prices Rise

 9/11/2026

Rates and Crude on the Rise

The ten-year Treasury note is on the brink of 5%, the second time since the 2008-09 financial crisis.

Home sales declined 2% in August versus July.

Iran Resumes Missile Programs

Headlines today

This is not how a bull market begins, it is how it ends. In 1982 the markets were finally experiencing an end to a decade plus of inflation and ever higher rates. The absence of double-digit rates at near zero risk began to lure money back to the stock market.  as  Exxon offered  a 10% dividend yield. Markets are now in the reverse situation. Let’s consider the markets one by one.

Stocks

It appears the DOW topped August 5 closing at  54,349. It is rebounding today Friday but this is just part of the decline. More decline is likely before a three stage rally occurs. That should end well below the August 5 high. That is more specific than usual in this column, but my point is that we have every indication of a final high.  Sometimes a ‘proxy’ stock   tells us more than all the other statistics available. Walmart WMT is a proxy stock for the overall economy. It is the largest private employer and the largest retailer. It topped May 19 at 133.88. two days later it gapped down from 130 to 121. After August 19 it gapped down again from 115 to 105. Gaps to the downside occur when there are not enough bids to trade at the same price. Prices have to drop until the existing orders are filled.  Today it trades about 106.  This is against the backdrop of the overall market making a new high in August, something is wrong. Macy’s raised future prospects on strong earnings, the stock gapped down 5%.

Bonds

The two-year Treasury yield soared Thursday from a low of 4.37% to close at 4.59%. On such a short-term note, this is a huge move in one day. Understand this is  a world-wide movement.  The thirty-nine year interest rate cycle peaked in 1981 with double digit rates. It bottomed in March, 2020 with the ten-year Treasury not yielding .5%. It is now, as mentioned near ten times that rate!

Crude Oil

The price of diesel fuel jumped 25% in the last month. It is now $6.06 a gallon. Railroads run on diesel as do heavy duty trucks. Every good arrives at a store via a diesel-powered truck. The result of this raise can only be an increase in higher priced goods, inflation. West Texas crude now trades around $100. As noted, Iran is not backing down.

Politics

Signs of panic in the financial markets have brought real panic in the political markets. Trump (who’s a socialist now Donald?) now matches George McGovern’s 16972 promise of a guaranteed annual wage. The cost is estimated to top one trillion so it will not happen. But it shows just how worried DJT is about the mid-terms. He should be.

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