Daily Take
Attacks on tankers around the Strait of Hormuz hit at least 12 in the week to October 5, Reuters reported, the most in any week since the war began. Fewer ships were crossing early in the week: seven commodity vessels passed through the strait on Tuesday, October 6, the fewest since July 23, according to Kpler data reported by Reuters, and crude crossing the strait fell 27 percent from the previous week's wartime high. On October 10 another tanker was struck in the strait, according to the UK Maritime Trade Operations centre.
That matters for oil, but it shows a disrupted route, not yet a shortfall. Exports from the Gulf of Oman coast and the Red Sea are covering part of the gap, and in September the region's exports topped pre-war levels on 14 days. Fewer barrels through the strait does not by itself mean fewer barrels reaching buyers. Whether the other routes can keep compensating is the next question. Brent's front-month contract settled Friday at 104.72 on ICE, up 4.40 from Monday's settlement. The contract for December 2027 rose 1.26 over the same days. The near end did most of the moving.
Gold and silver rose on Friday while the dollar index barely moved. Chips went the other way: the semiconductor index lost about 4.3 percent over the week while the S&P 500 gained about 1.2 percent.
No market has traded since Friday's close. We retired one of our demand tests unresolved today, because we never put numbers on its terms, and set a replacement that counts qualifying sessions. The S&P 500 met our record-close test on October 6. We recorded the result on October 10; the correction below explains the error.
Correction. Issues from October 7 to October 9 showed our S&P 500 rule as not yet met. It was met on October 6 and we missed it. The rule asked whether the index would retake its August 13 record close of 7,798.99. On October 6 it closed at 7,818.93, about 20 points above. The rule now stands as met on October 6, and later closes on either side of the record do not change that. The October 8 reading of about 3.09 percent for Japan's ten-year yield, published in the October 9 issue, could not be confirmed at its source and is withdrawn; the yield remained above 3 percent.
The scoreboard
Definitions: Glossary
Weekend edition: every market level below is a Friday, October 9 close or settlement unless otherwise noted.
How to read this: each lane is a standing idea about where capital is going. Rule is the condition we set in advance and whether it has been met; Thesis is where the idea stands today. Each lane ends with the next event that tests it. Lanes listed as unchanged carry their last stated reading and state forward.
| Lane | Rule | Rule state | Thesis state | What changed | Next test |
|---|---|---|---|---|---|
| Iran / Hormuz | A durable reopening of the strait | Reuters counted at least 12 tanker attacks in the week to October 5; crossings fell to a two-month low on October 6, and a tanker was struck on October 10. | A re-check of the strait's transit figures, October 15. | ||
| Crude / the front of the curve | Brent's front-month settlement | Brent's front-month contract settled Friday at 104.72 on ICE, up 4.40 from Monday's settlement. | The Petroline pipeline's restart re-check, October 15. | ||
| Global demand / the back of the curve | The far end of the oil curve; China's imports and refinery runs; demand forecasts | OLD FAR-END LEG October 11; NEW FAR-END LEG | Brent's December 2027 contract settled Friday at 83.88, up 1.26 from Monday, while the front month rose 4.40. | OPEC's monthly oil market report, October 13. | |
| Semis / memory and foundry | Micron's quarter; TSMC's September sales | MICRON LEG September 30, scored October 2; TSMC LEG October 8 | The semiconductor index fell about 4.3 percent over the week while the S&P 500 rose about 1.2 percent. | TSMC's third-quarter results, October 15. | |
| US equity internals | The S&P 500 retaking its August 13 record close | October 6, scored October 10 | The S&P 500 closed above its August 13 record on October 6 and ended Friday at 7,811.54, up about 0.6 percent. | September inflation, October 14. | |
| Gold / miners | Confirm: two consecutive official COMEX settlements above 4,400. End: an official COMEX settlement below 4,300 | Confirm: . End: (Friday's settlement not yet verified) | Gold's published Friday close was 4,216.30, up 59.30. | The exchange's official settlement records. | |
| Silver | An official COMEX settlement against our silver line | Silver's published Friday close was 61.05, up 1.98. | The exchange's official settlement records. | ||
| Japan / the yen | The yen's level; Japan's ten-year yield | JGB LEG September 15; YEN LEG | Japan's ten-year bond auction on October 6 drew an average yield of about 3.10 percent. | The finance ministry's monthly intervention figures, end of October. | |
| Defense primes | The stopgap's passage and signature | September 2, scored October 4 | The stopgap funding the government through December 11 passed the House on September 1 and was signed into law on September 2. | The companies' next quarterly reports. | |
| Rates / the Fed | The October rate path | September 27 | The ten-year Treasury yield closed Friday at 5.24 percent. | The Fed's meeting, October 28. |
Markets and economy unchanged: US jobs and demand (September inflation, October 14) · trade and tariffs · uranium · quantum · AI infrastructure · European defense · drones · critical minerals · cybersecurity · renewables · consumer hardware
Geopolitics unchanged: Russia-Ukraine (sanctions deadline October 18) · NATO borders · Red Sea · Taiwan · BRICS
Carried lanes, the detail: US jobs and demand (September payrolls of 29,000 and unemployment of 4.2 percent, as reported; the inflation half of the rule prints October 14) · uranium (Cameco's September 30 row: spot 89.63 and long-term 96.50) · trade and tariffs (no official readout of the September summit's terms; next re-check October 14) · Russia-Ukraine (the sanctions law's deadline is October 18)
The standing regime: a narrowing US-Japan policy gap.
What would change our view
A session with the narrower US-Japan policy-rate gap still in place and the dollar flat enough to isolate the yen, in which the yen still weakens.
Rule stateNOT FIRED
The condition has not been met. This label also covers a test whose required conditions were never present, and the card says which case applies. A test that needs a level to hold for two sessions stays NOT FIRED until the second session closes.
Full entry in the glossaryThesis stateUNCONFIRMED
Does the evidence fit the thesis while another explanation for the same evidence remains open? The card names that explanation.
Full entry in the glossaryRule stateRETIRED UNRESOLVED
A test withdrawn without a resolved outcome. Its history records why it was retired and whether it was replaced.
Full entry in the glossaryThesis stateMIXED
Does today’s evidence point both ways on the same thesis?
Full entry in the glossaryRule stateFIRED
The test’s condition was met on the close it is judged on, and the card gives the date. A fired rule stays fired. If the price later moves back through the level, the rule is still fired. Only an invalidation can change it.
Full entry in the glossaryRule stateUNRESOLVED
The registered end condition remains unscored. This does not mean the confirming rule fired or the thesis was invalidated.
Full entry in the glossaryThesis stateUNDER REVIEW
Has enough evidence built up against the thesis that the thesis itself is in question, not just today’s move?
Full entry in the glossaryRule stateINVALIDATED
The test can no longer be judged as written. Either its instrument, level or basis has been overtaken, or the invalidating event we named in advance has happened. We replace or retire an invalidated test openly, and we never change it quietly.
Full entry in the glossaryThesis stateCARRIED
Is there nothing new on this lane today? If so, the card keeps its last reading and that reading’s date.
Full entry in the glossaryIndependent editorial analysis for information and education. Nothing here is investment advice or a recommendation to buy or sell a security.