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,
Before markets, one ask. I'm opening a set number of year end financial reviews in October, and I'm capping it at ten so each one gets real attention. If you want one, just reply to this email and I'll be in touch. A year end review is the natural time to catch what's drifted, tax moves before December 31, an allocation that's run past where it should be, a policy or beneficiary that hasn't been looked at in years. More on what that actually covers below.
To the market, which reminded everyone this week that the bond story never really left. The four day Nasdaq run ended hard Wednesday, the S&P down 0.8% and the Nasdaq off 1.1%, as Treasury yields surged and traders moved to price another Fed hike. The 10-year jumped to 5.14%, its highest since 2007, the 2-year to its highest since 2023, and the 30-year to a post 2004 peak. Oil turned back up too, Brent near $106. Futures are lower again this morning, the Nasdaq off 1%.
What Sent Yields Higher
The move had three drivers stacking on each other, and they matter more than the single day of selling. First, the economy ran hot. S&P Global's services PMI hit 58.7, nearly a five year high, and manufacturing came in at its strongest in over four years. Strong activity implies the Fed has room to keep tightening, and the Atlanta Fed is now tracking third-quarter GDP at 5.1%. Second, oil rebounded, feeding straight back into inflation expectations. Third, and the one I'd weight most, a $70 billion 5-year Treasury auction drew weak demand and pushed 5-year yields above 5%, a reminder that the supply of bonds hitting this market is enormous and buyers are getting choosier.
Fed officials Williams said it's reasonable to expect another hike by year end, Barr said further adjustments are likely needed, and Collins warned inflation may stay notably above target. Those comments swung the odds of an October hike to better than 75%, up from around 49% a week ago. The market has moved from debating whether last week's hike was one-and-done to pricing the next one.
The 10-year through 5% doesn't break anything the day it arrives, but it changes the hurdle for every asset, and the direction matters more than the level. Yields re-testing and now exceeding 5% is exactly what pulled the rug from a rally that had gotten narrow and stretched. It's also global. Japan's 10-year hit a 30-year high overnight, and UK and German yields pushed to fresh multi year peaks. When the whole developed world reprices long rates at once, it's not a US specific story you can wave away.
Where the Strain Actually Shows Up
It's worth being concrete about who feels higher yields, because this is where a rate move stops being abstract. The consumer drives nearly 70% of the economy and carries about $19 trillion in debt, and this is where it bites. The 30-year mortgage is now around 7.26%, up nearly a full point over the past year, which freezes housing as no one with a low fixed rate will move. Credit card and auto rates track the prime rate higher. Savers get a little more on deposits, but as one economist put it, they're going from tiny yields to slightly less tiny yields, which doesn't offset the pain everywhere else.
The part I'd watch is smaller and mid sized businesses, which have less ability to borrow and feel a credit squeeze first. Higher yields work with a lag, showing up in housing, then consumer credit, then business investment, and eventually in the refinancing wall as cheap pandemic era debt comes due at 6% to 8%. None of that breaks on a single day. It builds and the tension in the data is that strong growth and hot PMIs argue for more hikes, while the transmission of those hikes lands hardest on the parts of the economy that were already the most strained. That's the box the Fed is in.
Some of the yield move reflects genuine strength rather than distress, with growth tracking above 5% and business activity booming. A 5% yield driven by a strong economy is a very different thing from one driven by a loss of confidence, and credit spreads remain contained, which is my clearest tell that this is still a valuation adjustment rather than something systemic. UBS captured the stance I'd endorse, staying positioned for further equity upside while building portfolio resilience, since volatility is likely to persist across geopolitics, inflation, debt, and the AI-capex question.
Financial Success Is Boring on Purpose
On a day when the market feels dramatic, I want to make a point about how wealth is actually built, because it runs opposite to everything a session like Wednesday suggests. Financial success is the accumulation of a lot of boring, consistent decisions made over a long time. Someone earning $120,000 and reliably saving $25,000 a year will almost always end up better off than someone earning $220,000 and saving less than $10,000. The market's daily noise has very little to do with which of those two people retires comfortably. The savings rate, the consistency, and the discipline do.
That's the frame for how I think about this work, and it's worth explaining what it actually covers, because a lot of people don't realize the full scope. When people hear wealth management they think investments, and that's part of it, but it's a fraction of the picture. The real work is cash flow planning, so you know what's coming in, going out, and getting saved. It's making sure your insurance actually fits your situation rather than what someone sold you years ago as "an investment". It's reviewing your estate plan so your wishes hold up and your family isn't left untangling things. It's reading your tax returns to find what's being missed. It's coordinating all of those pieces so one decision doesn't quietly undermine another.
My role, put simply, is to quarterback all of that for people who don't have time to run it themselves. The clients I work with tend to have demanding, successful careers, and the issue is rarely that they can't handle their finances. It's that doing it well takes real time and attention, and when you're busy, something gets dropped. A policy doesn't get reviewed, a rollover sits for two years, the tax return has a missed opportunity nobody caught. My job is to make sure none of those balls hit the floor, so the boring, consistent decisions that actually build wealth get made reliably rather than whenever there's a spare weekend. That's what a year end review is for. I'm taking on ten of them this October. If you want one of the spots, reply to this email and we'll set it up.
What I'm Watching
The 10-year above 5%, which is back in the driver's seat and whose direction matters more than any single day. The October hike odds, now past 75%, and whether the Fed speakers keep pushing them. Credit spreads, still my tell for whether rate risk is becoming credit risk, still calm. And oil, which turned back up and remains the variable feeding the yields and the inflation both.
One data point worth remembering when the tape feels scary is that since 1950, buying the S&P at an all time high has actually produced slightly better forward returns than buying on an average day. New highs aren't the danger. Reacting to noise usually is. October may get louder from here. The plan is what carries you through it.
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.