Weak jobs lifted shares. They did not lower mortgage rates.

Slowing jobs, unforgiving bonds

**The relief stopped at the stock market.** The US added 29,000 jobs in September, well short of the roughly 90,000 forecast, and unemployment rose to 4.2%. For about an hour markets did what a weak report usually makes them do. The ten-year Treasury yield fell to about 5.17%, gold jumped above $4,250 and the dollar slipped. By the close the bond market had reversed: the ten-year settled at 5.277%, 4 basis points higher on the day, and the five-year rose 5. Gold ended 1.0% lower.

The reversal matters because the usual explanations were missing. Oil fell — WTI lost 1.9% and diesel 3.0% after G7 governments committed as much as 100 million barrels from emergency stocks. The dollar weakened. And the bill yield barely moved, consistent with Bloomberg's report that traders pushed the Fed's next increase later rather than restoring it. What remained was a market asking more to lend for ten years even after a jobs report that, a year ago, would have pulled yields down for days. Euro-area inflation at 3.8% that morning, and a Dallas Fed president still favouring higher rates, supplied the reasons.

Equities kept the relief. The Nasdaq rose 1.2% to within a whisker of its record and semiconductors 2.1%. Homebuilders fell 0.8%. That split is the day's real content. Chip companies are valued on long-dated earnings that a pause by the Fed protects, and their customers are other businesses. A household buying a house borrows at a rate set off the ten-year, which rose; the thirty-year mortgage rate had already jumped to 7.28% in the week to 1 October.

Our analyst-ratings panel had been drawing the same line for a month. Across 40 consumer-facing companies, analysts added 5 Sell ratings in September, and none across the AI names, which gained 9 Buys. Small numbers, but one-directional, and they landed on the companies most exposed to a slowing payslip.

Two calls are marked today. The radar's second risk on 2 October, a US limit on diesel exports, is lowered: the G7 release appears to have ended that threat for now. And our payrolls catalyst said a weak report would test whether long yields could keep falling. It did, and they could not.

*Methodology.* Treasury yields are exchange settlements; the intraday path is from five-minute prices around the 12:30 GMT release. Payroll, unemployment and earnings figures are from the economic calendar. Ratings counts are from our panel, 1 September to 2 October, and include only companies covered on both dates. Diesel is the November contract, Brent December; the diesel margin is diesel times 42 less Brent.

Risk radar

What the desk is hedging.

high impactmedium prob.

A hiring stall turns into falling consumer spending before inflation cools

Payrolls barely grew in September and unemployment rose; analysts added Sell ratings across consumer companies in September; mortgage costs jumped. The scenario is a fourth-quarter fall in real spending while energy keeps headline inflation high, leaving the Fed unable to help. Carried 30 September at medium probability and medium impact, stable, framed then around China; impact raised to high and trend rising on the US data.

high impactmedium prob.

The ten-year breaks higher on a heavy auction week despite weak data

The ten-year settled at 5.277% after a weak payrolls report, having briefly fallen on the release; Wall Street is trying to live with 5% yields as cracks appear. The scenario is a disorderly move through recent highs around the next round of Treasury supply, forcing funds that borrowed against Treasuries to sell. Carried 2 October at medium probability and high impact, stable; rising after yields ignored a soft labour print.

medium impactmedium prob.

Housing turnover freezes and forced sellers set prices

The thirty-year mortgage rate rose to 7.28% from 7.03% in the week to 1 October; homebuilders fell on Friday as the ten-year rose; a third of sellers in one US city cut prices in September. The scenario is a winter in which only owners who must sell transact, so marginal prices fall faster than averages show. Carried 24 September at high probability and high impact, rising; recast as a price risk at medium, still rising.

severe impactmedium prob.

Gulf attacks hit export plants, not just ships

Hormuz tanker departures were 186 on Friday against a 30-day average of 269; Saudi Arabia is reported to be planning an assault on the Houthis to break their hold on the Red Sea. The scenario is strikes on Gulf processing and power plants that cut exports whatever emergency stocks are released. Carried 2 October at medium probability and severe impact, rising; stable today with no new strike reported.

medium impactlow prob.

Europe's diesel squeeze returns once released stocks are used

G7 governments will draw down emergency crude and diesel stocks, and diesel fell 3.0%. The scenario is a winter in which released barrels run down before refining capacity recovers, reviving the squeeze. Carried 2 October as a US export threat at medium probability and high impact, rising; lowered to low and medium, falling, as the release removes the trigger.

On watch this week

US ISM services on 5 October, consensus 55.7: whether its employment component confirms Friday's hiring slowdown.
The Fed's September minutes on 7 October: how many officials wanted to raise rates again.
The ten-year yield against 5.3%: a weekly close above it after a weak jobs report would extend the move.
Consumer companies' third-quarter guidance against the analyst downgrades already in place.

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