Treasury Buyback and Bond Market
The Treasury Department is buying back up to $6 billion of longer-term government debt, targeting 10-year and 20-year notes in an operation three times the normal size. The goal: improve liquidity and support the long end of the Treasury market after a sharp rise in longer-term yields.
The market did the opposite of what the Treasury wanted. The 10-year yield climbed to around 4.84%, its highest level since 2023. The 30-year yield moved above 5.3%. Oil topped $100 a barrel, adding to inflation worries. The buyback announcement has so far failed to calm the bond market. Yields kept rising as investors stayed focused on inflation, oil prices, and the government's large borrowing needs.
The open question: can larger Treasury buybacks actually push down long-term borrowing costs, or will fiscal and inflation concerns keep pushing yields higher?
Apple's Product Launch
Apple (AAPL) unveiled its biggest iPhone upgrade in years and entered the foldable market with the new iPhone Duo, which has both an internal and external display in a passport-size design.
Apple (AAPL) also introduced the iPhone 18 Pro and Pro Max, powered by its new 2nm A20 Pro chip. Both phones got a $100 price increase, taking the Pro to just under $1,200 and the Pro Max to about $1,300. Apple (AAPL) is promoting improved AI through Siri AI and Apple Intelligence, offering personal context.
The company also showed the Apple Watch Series 12 and Ultra 4, with more advanced health tracking and AI features, including a 15-second conversation rewind and summaries. Starting prices stayed at $399 and $799.
Apple (AAPL) expanded its AI push with new AirPods, the fifth version, featuring 50% better noise cancellation, real-time translation, and Siri AI. They start at $129.
Ahead of Tomorrow
More earnings are coming. Macy's (M) reports in the morning. Oracle (ORCL), Adobe (ADBE), and RH (RH) report in the afternoon. These give a read on the consumer in apparel and home spending, plus software and the AI buildout from Adobe (ADBE) and Oracle (ORCL). For Oracle (ORCL), debt and capex concerns persist, so free cash flow will be in focus as the AI story grows louder.
On data: weekly jobless claims, existing home sales, and the first inflation reading of the week in the PPI, ahead of Friday's CPI report. CPI could be a major market catalyst if it comes in anything but in line.
