Gold is falling in the middle of a war, which tells you the Fed now frightens people more than the Strait of Hormuz does. Good morning and welcome to today's market chronicle. It's Monday, September 28, 2026.
Friday handed all three indices a winning week, the S&P up about half a percent on the day, the Dow up nearly one, and futures are adding another half this morning. Behind that, the ten year sits above 5.2 percent after backing up more than twenty basis points in three sessions last week, and Treasury's buyback program, sold in the spring as the thing that would keep the long end polite, has been received by the bond market roughly the way a restaurant receives a reservation under a name it does not recognize.
Brent is back above 106 because Trump rejected Iran's offer to reopen Hormuz in exchange for easing the economic blockade. Gold fell anyway, and has been sliding all session, somewhere near 4,200 depending on which screen you trust. That is the part worth sitting with. Gold is the war trade, a war escalated over the weekend, and gold went down, because Kevin Warsh raised rates on the sixteenth, twelve votes to nothing, the first hike in more than three years, and October is now priced around two thirds for another. Warsh said inflation is too high and has been for too long. He is right, and he is treating it as something monetary policy can reach when the proximate cause is a waterway with warships in it.
I walked past the Quai on Saturday, where the physical oil houses keep their Geneva offices, and the lights were on, which proves nothing because they always are. What I keep thinking about is a friend who charters tankers telling me in June that freight was the last honest price in this market, and me disagreeing with him at length over a mediocre lunch. Everything I have read about Hormuz since has been a story about sentiment. Freight is a story about whether the barrel moves.
This week carries the data everyone claims to want. JOLTS and ADP midweek, PCE with a forecast of 0.4 on the month, ISM, and payrolls Friday at a consensus hundred thousand with unemployment drifting to 4.2. Micron (MU) and Nike (NKE) report. Bowman, Cook and Barr speak, and will say the same three things in a different order.
We closed Parker Hannifin (PH) on Friday, down about 3 percent over twenty trading days, against an S&P that did essentially nothing over the same stretch. It never hit its stop. Twenty sessions is this desk's maximum hold, the position reached it, and so it came off on time. The thesis on the aerospace backlog may still be right. It was not right inside twenty days.
As I write, gold is near 4,197 and still moving, Brent 106.89, WTI 94.10, Bitcoin about 84,700, S&P futures 7,804.50, the ten year 5.21 percent. Bitcoin up one percent on a morning like this is either conviction or nobody looking.
The market's position is that a hiking Fed, a closed strait and a five point two ten year are all survivable. It has been right about worse.
See you tomorrow.
Salomon