Reference

The ten forces that move markets

Almost every move we explain runs through one or more of these. Each entry says how the force travels, what to watch, and the mistake people make with it.

The Fed's rate path

What the Federal Reserve is expected to do next, and how fast.

How it travels: Markets trade the expected path of rates more than the current rate. When traders bring a hike forward, yields rise, the dollar firms, and assets with no income, such as gold and bitcoin, become more expensive to hold.
What to watch: Fed meeting statements, the dot plot, speeches by voting members, and futures pricing for each meeting.
The common mistake: The decision itself rarely moves markets. The surprise relative to what was priced does.
Recent Cause Files: Gold climbs back over $4,000 as stocks calm, Gold breaks $4,000, and our explanation is failing its test, Bitcoin reverses from a two-week high as Brent tops $111, Gold falls 1.9% in a risk-off session

Inflation

How fast prices are rising, and whether that is speeding up.

How it travels: Inflation sets the Fed's direction. Hot readings raise the odds of more hikes, which pushes yields up and pressures growth stocks. Oil is often the fastest route from a geopolitical event into inflation expectations.
What to watch: CPI and PCE releases, breakeven inflation rates, oil and food prices.
The common mistake: Headline and core inflation can point in different directions. The Fed watches core.
Recent Cause Files: Two votes for a hike keep December live and lift the 10-year above 5%, Brent falls on Iran talks, but oil still sets the Fed’s path, Brent eases for a second day as Iran keeps talking, Brent recovers most of its Tehran talks dip as no deal emerges

Oil supply and geopolitics

Wars, attacks and production decisions that change the oil price.

How it travels: A threat to supply adds a risk premium before any barrel is lost. An actual loss turns the premium into a shortage. Higher oil feeds inflation, which feeds rate expectations, which reaches almost every other asset.
What to watch: Attacks on production and shipping, OPEC+ decisions, inventory reports, and the gap between Brent and WTI.
The common mistake: Premiums fade fast when a feared disruption does not happen. Shortages do not.
Recent Cause Files: Brent falls on Iran talks, but oil still sets the Fed’s path, Brent eases for a second day as Iran keeps talking, Brent recovers most of its Tehran talks dip as no deal emerges, Brent tops $116 on reports of planned strikes on Iran

The AI spending cycle

How much the largest companies spend on chips, data centres and power.

Active in today's edition

How it travels: AI spending is revenue for chipmakers and a cost for the companies doing the buying. Markets reward spending when returns look close and punish it when the bill grows faster than the payoff.
What to watch: Capital spending guidance in earnings reports, chip supplier results, and funding moves such as debt or new share classes.
The common mistake: The same spending number can lift a supplier and sink the buyer on the same day.
Recent Cause Files: Alphabet’s worst day pulls the Nasdaq lower, and Amazon faces the same test, Investors reward Microsoft’s cash flow and punish Alphabet’s borrowing, Anthropic’s listing details carry chipmakers into the earnings test, Anthropic’s compute deal and Meta’s raise extend the AI rally

The US dollar

The strength of the dollar against other major currencies.

How it travels: Most commodities are priced in dollars, so a stronger dollar makes them dearer for everyone else and tends to push their dollar price down. A firm dollar also tightens conditions for borrowers outside the US.
What to watch: The dollar index, rate gaps between the US and other economies, and flows into US assets during stress.
The common mistake: In a real panic the dollar and gold can both rise, because both are havens.
Recent Cause Files: Gold breaks $4,000, and our explanation is failing its test, Gold falls 1.9% in a risk-off session

Treasury yields

The interest rate the US government pays to borrow.

How it travels: The 10-year yield is the base rate for valuing almost everything. When it rises, future profits are worth less today, which hits growth stocks hardest. When it falls during a selloff, that usually means money is hiding in Treasuries.
What to watch: The 10-year and 2-year yields, the gap between them, and Treasury auction results.
The common mistake: Yields can rise for good reasons, such as stronger growth, and bad ones, such as inflation or heavy borrowing. The reason matters.
Recent Cause Files: Treasuries catch a bid while oil climbs

Company earnings

Quarterly results and, more importantly, guidance.

Active in today's edition

How it travels: Indexes are heavy in a handful of very large companies, so a few reports can move the whole market. Guidance and spending plans often matter more than the quarter just reported.
What to watch: Results against expectations, guidance changes, margins and spending plans.
The common mistake: Beating forecasts is not enough if the outlook disappoints.
Recent Cause Files: Alphabet’s worst day pulls the Nasdaq lower, and Amazon faces the same test, Investors reward Microsoft’s cash flow and punish Alphabet’s borrowing, Anthropic’s listing details carry chipmakers into the earnings test, Anthropic’s compute deal and Meta’s raise extend the AI rally

Crypto liquidity and flows

Money moving into and out of crypto through funds, exchanges and leverage.

How it travels: Crypto prices react to fund flows, the amount of leverage in derivatives markets and the supply of stablecoins. When leverage is high, small moves can force large liquidations in either direction.
What to watch: Spot bitcoin fund flows, funding rates, open interest, liquidations and stablecoin supply.
The common mistake: Liquidations amplify a move. They rarely start one.
Recent Cause Files: Bitcoin reverses from a two-week high as Brent tops $111

Risk appetite

How willing investors are to own volatile assets.

How it travels: When fear rises, investors sell what is volatile and buy what is safe. Tech stocks and crypto often fall together while Treasuries rally. The VIX index is the usual gauge.
What to watch: The VIX, credit spreads, and whether stocks and bonds are moving in opposite directions.
The common mistake: Risk appetite describes a move. It is rarely the root cause, so we always look for what changed it.
Recent Cause Files: Anthropic’s listing details carry chipmakers into the earnings test, Anthropic’s compute deal and Meta’s raise extend the AI rally, Anthropic’s S-1 quantifies AI demand and lifts chipmakers, Gold climbs back over $4,000 as stocks calm

China's growth

The pace of the world's second-largest economy.

How it travels: China is the largest buyer of many commodities. Signs of slowing growth weigh on oil and metals. Stimulus does the reverse. Chinese buying is also a large part of global gold demand.
What to watch: Factory surveys, credit data, property figures and stimulus announcements.
The common mistake: Official data can lag reality. Commodity imports are often a faster read.