Any bears in here?
March 1, 2026 – Weekly comment
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Short note today as the weekend’s US/Israel attack on Iran dominates news and markets.
First, it’s clear that treasuries have regained safe haven status, with yields ending the week at recent lows. A bear market in equities may or may not be the outcome, but it’s prudent to exercise a modicum of caution.
2/20/2026 | 2/27/2026 | chg | |
| UST 2Y | 348.0 | 337.5 | -10.5 |
| UST 5Y | 365.2 | 351.0 | -14.2 |
| UST 10Y | 408.8 | 396.0 | -12.8 |
| UST 30Y | 472.4 | 463.3 | -9.1 |
The 2y ended 25 bps below the current FF midpoint target, currently 3.625% with 2y yield 3.375%, its lowest level since 2022. The 5y ended at 3.51%, the lowest since Sept 2024, just prior to the onset of the easing cycle. Low in Sept 2024 was 3.403%, which is likely an appropriate short-term target. Ten year at 3.96% is equal to the Oct 2025 low. The Sept 2024 low was 3.62%.
On the SOFR strip, the peak contracts are SFRM7 and U7 which settled 9706.0. +13.5 and +14.5 on the week. Largest change: U8, Z8 and H9, all +17 on the week, 9691, 9686 and 9681. It seems clear that some traders had more than an inkling of the weekend bombings, but there’s hesitancy to buy the short end too aggressively, given that actual FF cuts may be postponed.
Using the old Eurodollar futures convention, I consider the first red to be SFRH7. On BBG, that’s SFR6. Below is a table of the first three red prices, which surged on both Liberation Day in early April and in Sept/Oct when the Fed resumed easing:
| 1st red | 2nd red | 3rd red | |
| April 2025 hi (Lib day) | 9726.0 | 9728.0 | 9726.5 |
| Recent highs (Sep/Oct 25) | 9717.0 | 9717.5 | 9719.5 |
| High Settles (Sept/Oct ’25) | 9711.0 | 9713.5 | 9716.0 |
Currently SFRH7 is 9702.5, M7 is 9706.0 and U7 is 9706.0. My guess is that we might test Liberation highs at tonight’s open (Sunday, 01-March 2026).
Before this weekend’s activities, a key event was a research report by Citrini which looked out two to three years into the future to gauge possible ramifications related to the AI revolution.
https://www.citriniresearch.com/p/2028gic
“The sole intent of this piece is modeling a scenario that’s been relatively underexplored.”
It should have been clear all along that a single GPU cluster in North Dakota generating the output previously attributed to 10,000 white-collar workers in midtown Manhattan is more economic pandemic than economic panacea. The velocity of money flatlined. The human-centric consumer economy, 70% of GDP at the time, withered. We probably could have figured this out sooner if we just asked how much money machines spend on discretionary goods. (Hint: it’s zero.)
Some sought to discredit the report. I think criticism falls flat. The paper relates to Ben Hunt’s ‘common knowledge’ issue. Many in the market have suspected and even articulated a view that AI wil be extremely disruptive for white collar employment. Block cutting 40% of its workforce is a case in point. Jamie Dimon saying, “I see a couple of people doing some dumb things; they’re just doing dumb things to create AI or say they’re winning in the markets business” is another.
Citrini’s thought experiment was more specific, and forced a re-pricing, or, at the very least injected more uncertainty as to how individual companies might be impacted. This, at a time when private credit and private equity investments are already sucking wind, while USD stablecoins threaten the banking system.
Here are a few companies mentioned in the report, with net change from last Friday and net change from one month ago, 1/23/26.
AXP -10.7%, -14.6%
COF – 6.1%, -10.0%
MA – 1.7%, -1.4%
Z -1.8%, -34.4%
DASH unch, -14.8%
Second order effects and responses to this weekend will determine market outcomes.
The bearish case for equities is becoming stronger. However, it’s worth noting that the domestic freight industry is ticking up.
https://www.freightwaves.com/news/is-flatbed-signaling-a-manufacturing-renaissance
Freightwaves reports that Flatbed rejection rates just hit 42.5%. signaling tightness…either because of spot rates or capacity. Flatbed has more to do with basic manufacturing rather than consumer goods, and flows are reportedly internal rather than moving inward from ports. I.e. not import driven. Midwest manufacturing resurgence. Industrial production is firming, now at pre-pandemic levels.
Cass transportation is bit different, though the Cass Truckload Linehaul index rose 1.7% in January, with rates +3.2% y/y. Fairly modest gains, but at least a turn.
| 2/20/2026 | 2/27/2026 | chg | ||
| UST 2Y | 348.0 | 337.5 | -10.5 | |
| UST 5Y | 365.2 | 351.0 | -14.2 | |
| UST 10Y | 408.8 | 396.0 | -12.8 | |
| UST 30Y | 472.4 | 463.3 | -9.1 | |
| GERM 2Y | 205.2 | 199.5 | -5.7 | |
| GERM 10Y | 273.7 | 264.2 | -9.5 | |
| JPN 20Y | 292.2 | 292.3 | 0.1 | |
| CHINA 10Y | 178.3 | 180.8 | 2.5 | |
| SOFR H6/H7 | -56.8 | -66.8 | -10.0 | |
| SOFR H7/H8 | 7.0 | 2.5 | -4.5 | |
| SOFR H8/H9 | 20.0 | 19.0 | -1.0 | |
| EUR | 117.84 | 118.12 | 0.28 | |
| CRUDE (CLJ6) | 66.48 | 67.02 | 0.54 | |
| SPX | 6909.51 | 6878.88 | -30.63 | -0.4% |
| VIX | 19.09 | 19.86 | 0.77 | |
| MOVE | 64.27 | 73.38 | 9.11 | |
