The markets are strong today as we once again show that we will not cower to Terrorist.

As investors continue to assess the potential impacts from a protracted war between Israel and Hamas, the flight to safety has investors flocking to US Treasuries, which is helping to push yields down.  In addition, Fed Vice Chair Jefferson and Dallas Fed President Logan’s comments today have also helped ease worries, as they noted that the recent rise in yields may limit the need for future hikes. The probability for a Fed rate hike in November has come down and the 10 year is trading near 4.62%, off 16 basis points.

All 11 sectors of the S&P 500 are in the green with Materials leading and Energy lagging. Oil prices have retreated as well, and WTI as well as Brent is down close to 1%.  Natural gas however has been rising.

The Nasdaq 100 is above its 50-day moving average for the first time since September, and the S&P 500 is nearing 4,400 as the major indices are at high of the day.  Small caps/Russell is up for 5 consecutive days as well.

The VIX, or fear gauge, is also continuing its retreat and is down almost 6% to 16.65.  Breadth is decidedly positive as is the up volume.  New lows are still an issue on the Nasdaq.

Inflation

US consumer inflation expectations rose 3.7% in September, the highest level in 3 months, and up from 3.6% in August.  

Price growth expectations for food rose 0.3% to 5.6%.  Meanwhile, the cost of a college education declined significantly to 5.8% from 8.2%. This was the biggest one-month decrease since the survey began in 2013.

Other price expectations declines include:

• Gas -0.1% to 4.8%
• Medical care -0.4% to 8.8%
• Rent -0.1% to 9.1%

The median inflation expectations for three-year time frame rose 0.2% to 3%, while the five-year declined by 0.2% to 2.8%.