Alpha.Sources — Alpha Sources.CV

Market Chartbooks, September 2026 - Equities absorb the rates shock, while commodities broaden beyond oil

September delivered a unusually severe test of the market’s internal structure. The ten-year US Treasury yield rose by 53 basis points, its largest monthly increase since September 2022; the Federal Reserve tightened for the first time since 2023; Brent gained almost 14%; and both the S&P 500 and European equities fell. Yet global equity indices ended the quarter only around 2% below record highs and remained more than 12% higher year-to-date.

The chartbooks largely confirm this resilience, but with an important qualification. The equity regime has not broken; rather, leadership has rotated towards assets capable of tolerating higher nominal growth, higher inflation and scarcer energy. Technology remains a structural leader, but energy, healthcare, materials and selected non-US markets are increasingly important. The weakest signals are concentrated in the rate-sensitive domestic sectors and in countries exposed to deteriorating terms of trade.

Markets and Trading, AIclaus vistesenOctober 2, 2026chartbooks, equities, commodities, inflation, markets

Global Leading Indicators, July/August 2026 - On the precipice

Global leading indicators stabilised over the summer, albeit at a weak level, so far dispelling fears that the downturn which began in Q2 marked the start of an accelerated decline in the headline LEI diffusion index into outright negative territory.

The deterioration in global LEIs since March—coinciding with the shock to global energy markets from the US-Iran war—has unfolded against an increasingly stark divergence across financial markets. Equities remain relatively calm, with the rotational tape continuing, while bond markets are closer to panic as a combination of inflation concerns—shifting the outlook for monetary policy—and fears over persistently large fiscal deficits in developed economies pushes yields higher.

The key question is whether this repricing in global bonds ultimately spills over into equities, tightening financial conditions through lower equity prices and, by extension, delivering a further hit to leading indicators. For now, that transmission is not happening. One explanation is that equity markets view rising yields as a natural counterpart to the AI boom: stronger investment is supporting growth while raising expectations for future productivity gains. Add to this the crowding-out of government bonds by surging private-credit issuance to fund the AI build-out, and the coexistence of rising yields and robust equity markets looks less anomalous, for now.

Market Chartbooks, Sep 5 2026 - The barbell blocks out the noise

These chartbooks capture market themes which presently exist in a vacuum from which the oxygen has been sucked out by fears over the sell-off in bonds, its drivers and implications for monetary policy, and the AI story, which continues to capture the attention of bulls and bears alike. These two themes will continue to dominate the main market narrative as speculation intensifies over whether the data are pulling the Fed towards tightening, perhaps as early as this month, or whether it will ride out the storm with no change in rates. In the AI story, meanwhile, the next big test of the bull market’s strength and resilience will be the much-awaited IPOs of the frontier labs—OpenAI and Anthropic—which require significant and ongoing injections of capital to stay alive, even as they remain the principal conduits through which AI is transmitted to the real economy.

Markets and Trading, AIclaus vistesenSeptember 5, 2026chartbooks, equities, commodities, inflation, markets

Global Leading Indicators, June 2026 - Downturn confirmed

Global leading indicators deteriorated further at the end of Q2, with revisions pointing to a broadening weakness that has been building since March. This could still reflect the residual effects of the disruptions following the US-Iran war, but the signal is clear nonetheless. A more hawkish tilt in global monetary policy, as inflation risks have resurfaced, has likely contributed to the weakness, alongside uncertainty over the resilience of global consumer spending as real income growth comes under renewed pressure, and a fragile outlook for investment outside AI.

The silver lining is that the accelerated downturn in the headline LEI diffusion index masks increasing divergence across countries, with several key economies still remaining in expansion territory, as shown in the first chart below. The bad news for investors, however, is that—as I explain below—the probability of negative equity returns over the subsequent six months has increased markedly following the LEI diffusion index's recent move below zero.

02

Alpha Sources Blog