Treasury Yields Mostly Higher Ahead of Inflation, Jobs Data — Market Talk

1650 ET - Treasury yields are mixed as oil prices decline and New York Fed Williams indicates a rate hike in October isn't a done deal. The Conference Board Consumer Confidence Index unexpectedly falls, with a rising share of respondents forecasting higher interest rates in the short term. August PCE inflation tomorrow is expected to remain hot, according to a WSJ consensus. September's ADP private-sector employment report is forecast to increase to 68,000 from 38,000. The 30-year Treasury yield reaches a new 24-year high, settling at 5.594%. The 10-year rises 0.015 percentage point to 5.256%, highest since May 2002. The Fed-sensitive two-year tenor falls 0.035 point to 4.887%. ([email protected]; @ptrevisani)1458 ET - OpenAI is adding plug-in extensions to its AI models to help customers distribute their products more. App makers can build directly into ChatGPT and Codex, Chief Executive Sam Altman says during OpenAI's Development Day. Apps can also be discovered through the models, so when a user asks a question, ChatGPT can recognize if a plug-in would be helpful and suggest it. Users can also use the tokens they pay for through a ChatGPT subscription to use other company's programs, so businesses don't have to cover the cost of users' tokens, Altman says. ([email protected])1456 ET - OpenAI is launching an ultra-fast version of its AI models to try to help developers and businesses speed up work. The faster version will be available across API, ChatGPT and Codex, Chief Executive Sam Altman says during OpenAI's Development Day. Ultrafast models will work at eight times the speed of a typical model, with price six times higher. That is an increase from OpenAI's "Fast" version, which gives users twice the speed at twice the price. Ultrafast will also be available for OpenAI's new GPT-6.1 Sol in the near future, Altman says. The launch comes after OpenAI scrapped the release of its new AI model over safety concerns. ([email protected])1340 ET - Another factor driving consumer confidence lower in September was the surge in long-term interest rates in bond yields, says Gregory Daco, EY-Parthenon's chief economist. A confluence of factors, including inflationary concerns and rising oil prices fueled a sell-off in the bond market. Mortgage rates also hit 7% in September. "Whether you look at inflation developments or interest rate developments, they're both constraining consumer spending power and capacity," Daco tells WSJ.([email protected])1250 ET - While analysts say that a positive sentiment around bitcoin is starting to fade, at least in the short-term, data shows that investors are accumulating long-facing options at over $90,000. Other popular targets include strike prices of $95,000 and $100,000, according to data from Deribit. Fund traders are continuing to return to bitcoin ETFs as well, with days of consecutive inflows now up to 8 days - with an inflow of $31 million seen yesterday, according to data from Coinglass. Bitcoin is currently trading lower, down 0.3% to $83,238. Ethereum is flat at $2,682, XRP is up 1.5% $1.52, and solana is down 0.2% to $118.57. ([email protected])1244 ET - Investors are overly fixated on Netflix's slowing viewing trends in the U.S. and missing other positives for the company, Deutsche Bank analysts write in a note, updating the stock to buy. They note that the biggest domestic declines this year coincided with the Winter Olympics and World Cup, while international viewing data suggest consistent growth with a substantial runway. The company also has room to leverage its position as a platform — optionality the analysts see as not priced in - and should, on net, benefit from AI adoption. Though the U.S. softness is real, the analysts write, "we believe the current valuation largely reflects these domestic risks while insufficiently differentiating Netflix's mature US business from its less- developed, higher growth international opportunity." Shares gain 2%. ([email protected])1237 ET - Xanadu Quantum Technologies offers a high-upside, pure-play investment in photonic quantum computing, says RBC's Paul Treiber, who initiates coverage with a speculative risk rating and a $16 price target. The analyst says that near-term stock upside will be driven by technical milestones, government funding, and strategic partnerships rather than immediate sales until its quantum data center goes online in 2029/2030. The risk exists because "Xanadu and most quantum computing peers have nominal near-term revenue, which makes benchmarking valuation difficult." However, Treiber says that Xanadu offers a "unique exposure to photonics-based quantum computing" as the company and sector ramp up to "quantum monetization" in 2030. Shares are up 2% to C$4.87 but down 55% year-to-date. ([email protected])1223 ET - AutoCanada making moves to reorganize its business, most recently by setting up a committee to consider what to do with its collision repair unit. The Canadian automotive retail group is now mulling a potential sale of one of its core business units as part of a broader strategic review for the segment it says isn't fully reflected in its shares. The company only a day prior said it would focus more on its core dealership and collision operations after saying it would discontinue its digital auto-retailing initiatives, which are its online consumer-to-consumer finance and insurance business and its Kijiji-based instant cash offer business. In the same week, AutoCanada's large minority investor, Rob Steele, expanded his stake in the company and bringing his ownership to 10.4%. ([email protected])1215 ET - Demand for Carnival's cruises is strong and broad-based, CEO Josh Weinstein says on a call with analysts. After experiencing a disruption in bookings earlier this year, trends rebounded meaningfully over the past three months, he says: "With 2026 largely on the books, our attention is turning to 2027 and beyond." For 2027, Carnival is already halfway booked, with both occupancy and pricing at record levels, according to Weinstein. "2028 is also off to an excellent start at higher occupancy and even higher prices year-over-year, and our booking curve is further out than it has ever been at this point in the year," he adds. ([email protected])1213 ET - Carnival CEO Josh Weinstein says strong demand and operational improvements have fully offset higher fuel costs. "Yes, fuel can be a volatile input cost, with a track record of prices going up and down," Weinstein says on a call with analysts. "But amidst that noise, let's not lose sight of our underlying operational improvement." The cruise operator is generating more demand, with strong booking trends and pricing power. At the same time, the company has netted more than $150 million in operational improvements since its last quarterly readout in June, Weinstein says. Taken together, Carnival has fully offset the impact of higher fuel prices that are currently expected, according to Weinstein. Carnival jumps 12%. ([email protected])1210 ET - With no end in sight for the bonds selloff, investors are left searching for relatively safe spots in the yield curve. SanJac Alpha's Andrew Wells says the seven-to-10-year section could be that spot. "For now, we view duration with skepticism," he says. Upcoming data will drive markets, but the yields are biased upwards, as market's sentiment is "Asymmetrically hawkish in only one direction," Wells says in an email. A hot PCE print tomorrow will give "more tightening ammunition," while a soft one will be discounted as "August data that isn't accounting for September oil," he says. The 30-year yield hits 5.612%, a 24-year high. ([email protected]; @ptrevisani)1204 ET - Fair Isaac is dealing with two key negative developments, Deutsche Bank says in a note. Analyst Faiza Alwy says FHFA director Bill Pulte indicated that competitor VantageScore's 20 point discount to FICO has been removed and both scores will now be treated the same by the GSEs. "This would likely in and of itself result in higher number of mortgages that will see favorable pricing with VS4 vs. FICO Classic," Alwy says. Additionally, Rocket Mortgage said it will become the first mortgage lender to use VantageScore 4.0 as its preferred credit scoring model for all eligible loans, and during 4Q will default to VS4 for mortgages delivered to the federal housing agencies, VA home loans and any other eligible mortgages, according to Alwy. Fair Isaac tumbles 27%. ([email protected])