CommoditiesModerate · rising
Oil is rising sharply
The oil ETF (USO) is +28.9% over the last 63 trading days (about three months).
Market Compass · updated 16 Oct 2026 after close
Where the market is heading.
Interest rates, inflation expectations, oil, the dollar and sector momentum, turned into one picture of which sectors have the wind behind them, which are fading, and when conditions call for caution.
Economic regime
Reflation
Since Apr 2026Confidence: Low (mixed signals)
Inflation risingInflation falling
Stagflation riskGrowth ↓ · Inflation ↑Energy and defensives have held up best
NowReflationGrowth ↑ · Inflation ↑Cyclicals, energy and financials have led
SlowdownGrowth ↓ · Inflation ↓Defensives and quality have held up best
GoldilocksGrowth ↑ · Inflation ↓Growth and technology have led
← Growth slowingGrowth rising →
Growth and inflation are market-based proxies (cyclical against defensive sectors, credit appetite and 10-year breakeven inflation); official CPI and industrial-production data will replace them when connected. The hints describe past tendencies, not forecasts.
Market conditions
Risk-on
1 of 7 stress signals are on. Few warning lights are flashing.
Risk-onNeutralCautiousDefensive
3-month T-bill yield
4.26%
▲ rising
10-year yield
5.09%
▲ rising
Inflation expectations (10Y breakeven)
2.35%
▲ rising
Oil (USO ETF, 3 months)
+28.9%
▲ up sharply
Yield curve 10Y–2Y
+35 bp
● steady
Credit (HYG vs Treasuries, 3m)
+0.2%
▼ tightening
Volatility (VIX)
20.0
▲ elevated
Breadth (stocks above 200-day)
55%
● healthy
What's moving markets now
Themes detected from price action in oil, rates, the dollar and credit, with the sectors each one has helped or hurt historically.
RatesModerate · rising
Long-term yields are rising
The 10-year Treasury yield moved +0.54 points over the last 63 trading days.
▲ Tailwind: –
Sector outlook
Outlook = regime history + macro sensitivity + momentum + valuation (news pulse not available yet)| Sector | Outlook | In this regime (history) | Momentum (3M vs market) | Valuation | Trend |
|---|---|---|---|---|---|
| Energy | Favourable 87 | +1.1% | −64.4% | Below avg. | Mixed |
| Communication Services | Favourable 76 | +1.3% | −74.7% | Below avg. | Mixed |
| Information Technology | Favourable 75 | +2.0% | −69.3% | Above avg. | Weakening |
| Financials | Favourable 72 | +0.9% | −77.8% | Below avg. | Mixed |
| Consumer Discretionary | Neutral 53 | +0.5% | −77.9% | Below avg. | Mixed |
| Health Care | Neutral 51 | −0.4% | −62.6% | Above avg. | Mixed |
| Materials | Neutral 50 | −1.9% | −73.1% | Average | Mixed |
| Industrials | Neutral 45 | −0.0% | −78.1% | Average | Mixed |
| Consumer Staples | Neutral 41 | −3.3% | −72.5% | Average | Mixed |
| Utilities | Unfavourable 31 | −2.1% | −79.3% | Average | Mixed |
| Real Estate | Unfavourable 20 | −1.5% | −83.9% | Above avg. | Mixed |
"In this regime" = average 3-month return against the equal-weight market in past months that had the same growth/inflation regime, across the stocks we cover today (so it carries survivorship bias). Momentum is the sector's 3-month return minus the S&P 500's.
What if…? Scenario explorer
Pick an event to see how each sector and asset class has historically reacted to similar moves.
Sector reaction (historical sensitivity)
Other assets
Estimated from monthly returns since 2008 with a multi-factor regression (market, oil, 10-year yield, dollar, credit). Large shocks are scaled from small monthly moves, and history does not repeat exactly.
Stocks aligned with today's outlook
From sectors with a favourable outlook, filtered for X-Ray Score ≥ 65 and not overvalued. A starting point for research: open each X-Ray before deciding anything.
MU77
Micron Technology Inc · Information TechnologyFair · fair value $851ADBE77
Adobe Inc. · Information TechnologyUndervalued · fair value $554INTU72
Intuit Inc. · Information TechnologyUndervalued · fair value $505SYF70
Synchrony Financial · FinancialsFair · fair value $98FICO70
Fair Isaac Corp · Information TechnologyFair · fair value $928FSLR67
First Solar, Inc. · Information TechnologyFair · fair value $235What changed since last week
▲Volatility signal turned ON (was off on 9 Oct).
A weekly written brief is not available yet; this list is generated from the data.
Signals on, last 12 months
0 to 7 signals, daily.
How the risk gauge is built: the seven signals
| Signal | Rule | Reading | State | Since |
|---|---|---|---|---|
| Trend | S&P 500 below its 200-day average | 7,659 | off | 8 Apr 2026 |
| Breadth | Fewer than 40% of stocks above their own 200-day average | 55% above | off | 12 Aug 2025 |
| Volatility | VIX above its trailing 1-year 80th percentile | 20.0 | ON | 16 Oct 2026 |
| Credit stress (proxy) | High-yield bonds (HYG) down more than 3% against Treasuries (IEF) over 3 months | +0.2% | off | 12 Aug 2025 |
| Yield curve | 10-year minus 2-year Treasury yield below zero (inverted) | +0.35 pts | off | 13 Oct 2026 |
| Energy shock (proxy) | Oil ETF (USO) up more than 30% over 3 months | +28.9% | off | 9 Oct 2026 |
| Earnings | Aggregate trailing net income of the stocks we cover lower than a year earlier | +35.5% | off | 16 Oct 2026 |
| Leading indicator | OECD leading indicator falling three months in a row | – | not yet | – |
Market Compass describes conditions and historical patterns using public data. It is educational research, not a forecast, a recommendation to buy or sell, or personal financial advice. Markets can behave differently from history.