Journal ·
Monday, 28 September 2026
Regime Risk-offMarket regime
High-yield credit spreads widened 25bps week over week in the 25 September FRED reading, indicating higher required compensation for credit risk despite calm equity volatility. The accompanying rise in real Treasury yields supports an inference of tighter financing conditions; these are weekly changes in the data, not same-day moves.
Key numbers
| Metric | Level | Read |
|---|---|---|
| Regime | Risk-off | Close-of-day read |
| VIX | 16.07 | Calm |
| Breadth above 50-day EMA | 29.5% (289/978) | Deteriorating |
| SPY close / 200-EMA | 765.49 / 722.55 | +5.9% above trend |
| 10Y Treasury | 5.17% | 25 September; week over week +16bps |
| 2Y Treasury | 4.81% | 25 September; week over week +5bps |
| 10Y–2Y spread | 0.36% | 25 September; week over week +11bps |
| 10Y breakeven inflation | 2.34% | 25 September; week over week +1bps |
| Real 10Y rate | 2.83% | 25 September; week over week +15bps |
| HY credit spread | 2.93% | 25 September; week over week +25bps |
| Fed funds | 3.63% | 1 August |
| Initial jobless claims | 197K | 19 September; week over week -1K |
| Unemployment rate | 4.1% | 1 August |
| Nonfarm payrolls | 159.1M | 1 August; change not reported |
| Housing starts | 1,275K | 1 August; change not reported |
Regime assessment
Inference: SPY’s positive long-term trend lacks broad participation, supporting a defensive market characterization rather than a claim of broad equity strength. The payroll and housing figures are levels without changes; they cannot establish acceleration or contraction.
What would change the call
The defensive interpretation would be invalidated by breadth turning upward above 29.5%, alongside HY spreads narrowing below 2.93% and real yields falling below 2.83%, while SPY remains above its 200-EMA. No single measure would satisfy that joint test.
What to watch
Upcoming claims, payroll and housing-starts releases provide checks on labor and construction activity. Release dates are not yet scheduled; payroll and housing changes are needed before judging their direction.
Status
Risk-off — tenth consecutive read in the journal; prior level 25 September 2026, also risk-off.