I'm Dan Sheehan, a wealth advisor / financial planner based in Charlotte, NC. I work with high earners, families, and business owners on the things that actually move the needle over a lifetime: building the plan, managing the portfolio, and getting the tax picture right. Most of my clients came to me knowing they were doing well but suspecting they were leaving something on the table. Usually they were. This newsletter is where I share the thinking behind that work, one topic at a time.
Good morning investors.
I'm writing this morning from New York City, coffee in hand, looking out at the Empire State Building. I always enjoy being here. There's an energy to this city that's hard to find anywhere else, and it's a great place to think about markets.
Stocks edged up Thursday as investors worked through Micron's strong quarter and more signs of sticky inflation, the S&P up 0.2% with the Dow and Nasdaq roughly flat. The real action was in bonds. The 10-year spiked to 5.34%, its highest since 2002, then reversed hard to as low as 5.21% as oil tumbled on reports Europe may release fuel reserves. Futures are higher this morning ahead of the main event: the September jobs report at 8:30.
What the Jobs Number Means for the Fed
Economists expect around 84,000 jobs added in September, down from August's 162,000, with unemployment holding at 4.1%. That would be a slower pace but still solid enough to describe a stable labor market. With the calendar otherwise quiet, the market will read this number closely, and it feeds directly into the Fed's next move.
Here's where I come out, and it's a step forward from where I've been. I think the Fed pauses the hiking cycle in October. More than that, if we start to see oil ease, I think they begin building a case to take back the quarter point hike they delivered in September. I've said I didn't think they should have hiked in the first place, but that's yesterday's news, and I'd rather look at where this goes than relitigate it. The logic is straightforward, the inflation doing the damage comes from energy and supply, which rate hikes can't fix, and if oil rolls over, the strongest argument for tightening weakens with it. Futures already put the odds of an October hold around 72%. A soft but steady jobs number this morning wouldn't change that, and given the Fed has signaled the labor market looks stable, even a strong print alone probably wouldn't force a hike. The path toward a pause, and eventually maybe a reversal, is opening up.
The Bond Market Blinks on Oil
Thursday showed exactly how tied this whole market is to oil right now. The 10-year hit a 24-year high in the morning, then plunged more than a tenth of a point in yield by afternoon, all on reports that Europe is considering releasing diesel and crude reserves to ease the shortage. France reportedly proposed releasing 50 million barrels of diesel and IEA members another 50 million of crude, after the Trump administration pressed European allies to act. Oil fell hard on it, Brent back under $100 and WTI down near $89.
That whipsaw is the clearest evidence yet of a point I have made, where the move at the long end is now driven as much by oil as by anything the Fed does. When crude drops on a supply release headline, yields drop with it, because cheaper energy means lower inflation expectations. It goes the other way too, with oil having settled higher the prior session on news the US is sending a third carrier group and 2,000 Marines to the region, a reminder the conflict can still escalate. The tight link between the two is why I keep saying a genuine resolution in the Middle East would do more to bring yields down than any Fed decision. Thursday was a preview of how fast that could happen if the oil picture actually turns.
Two levels worth holding in mind. BlackRock's Rick Rieder captured why bonds are suddenly interesting, telling the Wall Street Journal his funds are yielding more than 7% at three-year duration, something he'd waited four decades to be able to do. That's the opportunity I keep flagging for retirement portfolios. On the other side, Fundstrat's Hardika Singh put a new danger line on the map, noting valuations have historically started compressing once the 10-year clears 5.5%, the point where investors, companies, and consumers all have to redo their math. We're not there, but it's the level I'd watch above 5%, because a 5.5% risk-free yield is a serious competitor for every dollar that might otherwise go into stocks.
The Robot Timeline Debate
A real disagreement opened up this week over when AI powered robots start displacing workers, and it splits the big names. Anthropic published research arguing it takes decades, something like 40 years, before robots get cheap enough to handle even 10% of physical work. Their point is that capability isn't the holdup, cost is. Nvidia's Jensen Huang and Tesla's Elon Musk see it very differently, with Musk saying Optimus could go on sale as soon as next year and Morgan Stanley sizing the humanoid market above $5 trillion by 2050.
The timelines don't matter much for how I invest, and that's the point. Robots in five years or forty, the road there is the same one: heavy spending on chips, compute, and the physical infrastructure to run it all, which is the layer I keep favoring. The part I'd flag for the people is the labor angle. Amodei has warned that 2030 could bring real white collar job losses, with the expensive office roles the first ones AI can undercut. That's not a market call, but it's a reason to build a financial plan that doesn't quietly assume your income is permanent and to add in a lot of what if scenarios.
Nike Keeps Struggling
Away from the macro, Nike reported and the stock fell hard, down around 10% premarket and now off nearly 45% on the year. Revenue dropped 4% to $11.2 billion, and management guided for a high-single-digit revenue decline in fiscal 2027, with weakness concentrated in Sportswear, Jordan, and Greater China. The one bright spot was gross margin, up 60 basis points to 42.8%, but it's hard to get excited while sales are still moving backward.
Nearly two years into Elliott Hill's tenure as CEO, Nike is still working to repair mistakes around distribution, product, and brand positioning, and the heavy discounting tells you inventory and demand still need work. The company announced a new operating model called "Pace" targeting $2.5 billion in cost savings by 2031, with more layoffs starting in 2027, which is why Citi described it as turning into a cost-cutting story. Nike remains one of the strongest brands in global sport, and that brand equity is real, but this has been a terrible performing stock and the turnaround ahead is significant. Cost cuts can support margins, but they don't fix a demand problem, and the details on when Pace actually moves the needle won't come until 2029.
What I'm Watching
The jobs report at 8:30 as the week's main event and the next real input for the Fed, where a solid but slower number keeps the pause on track. The 10-year, which showed Thursday how fast it can reverse when oil moves, and whether it settles below 5% or pushes toward that 5.5% compression level. And oil, where a European reserve release would relieve the whole chain while the carrier deployment keeps escalation risk live.
Enjoy your weekend.
Best regards,
Dan Sheehan [email protected]
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Market Pulse with Dan Sheehan is a personal market commentary newsletter and is independent from my employer. The content is provided for informational and educational purposes only and reflects my views as of the publication date, which may change without notice. Nothing contained herein should be construed as personalized investment, legal, tax, or financial advice, or as a recommendation to buy or sell any security. Any positions discussed represent my own views and may not be suitable for every reader's objectives, financial situation, or risk tolerance. Information is derived from publicly available sources believed to be reliable, but accuracy and completeness cannot be guaranteed. Readers should conduct their own research and consult their own professional advisers before making financial decisions.