Tuesday, 10/20/2026 a.m.

• Markets open higher on broad strength across sectors – U.S. equity markets are higher in early Tuesday trading, with broad participation across most sectors, led by health care and real estate. Bond yields are declining, with the 10-year Treasury yield near 5.08% as markets scale back expectations for a Fed rate hike later this month. Internationally, Asian equities finished mixed, while European stocks are broadly lower. WTI crude is extending its recent gains amid continued disruptions in the Middle East. The U.S. dollar is weakening modestly against most major currencies, consistent with lower Treasury yields.
   
• Hiring slows but remains healthy – U.S. private employers added an average of 18,500 jobs per week for the four weeks ended October 3, down from 26,000 in the previous report, according to ADP. The slowdown follows six consecutive weeks of improving job growth, and the one weaker reading does not establish a sustained deterioration in hiring. With unemployment contained at 4.2% and roughly 7.1 million job openings about equal to the number of unemployed workers, the broader picture suggests that labor demand and supply are generally well aligned. Continued labor growth should help support household incomes and consumer spending, while a modest cooling could help ease wage pressures that contribute to inflation. In our view, the Fed is likely to hold rates steady this month but remains on track for further tightening. The timing of any moves may depend on incoming inflation and employment data over the months ahead.
   
• Housing starts weaken, while permits hold steady – Privately owned housing starts fell in September to a seasonally adjusted annual rate of 1.22 million, below estimates of 1.31 million. Building permits, a forward-looking indicator of residential construction, held steady at an annualized pace of about 1.4 million, modestly above forecasts for 1.39 million. Elevated mortgage rates, with the average 30-year fixed rate near 7.4%, continue to constrain housing demand. Although residential construction activity has weakened, continued strength in data-center and other nonresidential construction has provided an offset, helping support overall investment and economic growth. The relative resilience of permits also suggests that builders have not abandoned future projects, although actual construction may remain subdued.

Brian Therien, CFA;
Investment Strategy

^{Source for all data: FactSet}