Market Update Preview
For the past four or five weeks, the drive-home point here has been sideways action: the big early-August run played out most of the move for what was an underpriced market in late July, and we needed time for flows to catch up to a now slightly overpriced level. The thing I kept pointing to was mid-September — specifically the corporate tax drain — as the moment that picture could change. We're almost there. But a genuinely major development in the underlying flows has arrived first, and I'll lead with my hand: September flows are coming in fabulously strong — the strongest September since the COVID spending spree — and it's changed how I'm reading the next couple of months.
I break down exactly where the surge is coming from, line item by line item, and why the sell-off I thought was possible into September/October now looks a lot less likely. I also lay out the catch: this same tailwind has a shelf life, and there's a specific window in 2027 where its reversal could collide with something else to produce a very different kind of setup. The Flow Monitor still says we're thoroughly overpriced, so I walk through what that does and doesn't mean for positioning, plus the one component of the tool that ticked toward the danger zone and why I think it reverses.
And with the Fed decision a day and a half away at roughly 60/40 odds of a hike, I lay out both scenarios I can imagine, why I don't think a hike changes the trajectory either way, and the one thing the Fed could do that would actually matter. Full breakdown below.
(Note: Below is a summary of the Market Update Video for 09/07/2026, click here to watch the video update)
