JD Durkin: Let’s bring in Michael Reinking. He is Senior Market Strategist here at the New York Stock Exchange. Never a doubt that we would do the show.
Michael Reinking: Oh, no. Not at all. Not at all. We always knew we’d be here.
JD Durkin: Thank you for joining me. We made it through Friday. Your takes into this Friday. Happy Friday. On the markets this week, we had some interesting rotation storylines earlier in the week, but ultimately, for a week that was kind of light on economic data, kind of light on earnings, you had some interesting moves this week.
Michael Reinking: Yeah, we had a pretty choppy week, right? The week was bookended by, you know, kind of some optimism around Iran and tech, which had led to rallies on Monday and Friday.
You know, the middle of that week, right, we’d seen some weakness as we were kind of watching Treasury yields move pretty sharply higher following the hot PMI data earlier this week.
Now, the S&P 500 ended the week up a little over 1%. Other major indices, though, kind of ended right around unchanged, slightly lower. And that’s something that we’ve really been seeing since kind of the Jackson Hole speech, you know, at the end of August, right?
So over that time period, we’ve seen Treasury yields move up 50 to 65 basis points across the curve, and the S&P 500 is dead flat. But if you look at the equal-weight version of the index, small- and mid-cap indices, they’re down about 5%.
JD Durkin: What will give you confirmation that the bond vigilante narrative is not going away as we turn the page into next week, given the big move, especially in things like the 10-year Treasury yield, the 30-year Treasury yield? We’re not just talking, like, multi-year highs. We’re talking multi-decade highs we saw the last few days, correct?
Michael Reinking: Yeah. And, you know, one thing that I think I’m kind of paying attention to, to see if we actually have kind of hit this technical and flow kind of clearing point, that as we head into the end of the quarter this next Wednesday, right, you have pension funds.
You’ve had this significant move in, you know, Treasuries lower throughout the quarter. Equities have held up pretty well. And with, you know, kind of pension funds that are pretty well funded, you could potentially start to see, you know, kind of some reallocation from that contingent.
So I’m wondering if you actually start to see kind of some of that move higher in yields come to an end in the next week or two.
JD Durkin: We are 39 days out from the November midterm elections. With the U.N. General Assembly here in New York this week, we had a wildly consequential meeting, at least many had thought, between President Trump and Xi Jinping.
I don’t know what substantive really came out of that meeting, but there’s a lot of kind of geopolitics, domestic politics for investors to kind of digest. What else should they be paying attention to in that arena?
Michael Reinking: Yeah. Much ado about a meeting. A lot of pomp, maybe. We haven’t seen so much substantive yet, though we do have some Panda Watch coming back. Ron Burgundy, right? On Panda Watch once again.
You know, look, we’re going to get a readout on Monday morning. Treasury, USTR, Trade Representative Greer said we’re going to get a readout of, you know, kind of what took place over the last couple of days on Monday.
And we do have kind of two more rounds of meetings between the presidents kind of later this year, right? So, you know, it’s a good thing to see kind of both sides coming to the table, and you’re kind of trying to work through some of the important trade relations.
JD Durkin: When I take a look at the next five trading days next week, Micron earnings jumps out to me. Obviously, the ADP print on Wednesday, but September jobs from BLS on Friday. A few potentially market-moving things. What else is on your radar to pay attention to?
Michael Reinking: Yeah, I mean, look, you know, clearly AI, or now superintelligence, the technology formerly known as AI, you know, is very much at the forefront.
The OpenAI DevDay is on Tuesday, so that’s also going to be something to pay attention to. We have quarter-end on Wednesday. And then, as you pointed out, the big jobs number on Friday is going to be the big catalyst for the week.
JD Durkin: I don’t know that I can rewire my brain to stop calling it AI. I know the president wants to call it superintelligence.
Michael Reinking: We’re trying. We’re working on it.
JD Durkin: I guess it’ll take some time. Michael Reinking, my man, take good care. Enjoy your weekend. Thank you for being with us.
Michael Reinking: Appreciate it.
JD Durkin: We’ll talk to you soon.
