Financial Focus
September 18, 2026 

     GOOD MORNING!     Thursday’s risk-on trade on optimism that the Fed would put the inflation genie back into the bottle eventually was supported by reported short covering.  The yield curve 2 years and longer shifted 7 to 9 basis points lower from Wednesday’s close.  Initial and continuing claims for unemployment benefits moved lower indicating the labor market remains stable.  But the data related to the housing market, housing starts and pending home sales, were gloomy.  Speaking of gloom and doom, the gain in the tech stocks suggest that the AI boom returned.  
     

     The Bank of Japan raised rates overnight, but confusing signals of what’s next is causing the Yen to weaken.  European stocks are lower but US stock index futures are indicating a slightly positive opening.  Treasury yields are little changes but are showing a slight lean higher.  Ahead for the day are August’s industrial production/capacity utilization and Leading Economic Indicators and a couple of Fed speakers.  The markets will digest the data, look for breaking geo-political headlines and then position for the weekend.