EB Daily Market Report - Brief Update - Thursday, October 8, 2026

The big news today is that money is rotating back towards interest-rate-sensitive areas, which hasn't happened much of late. It's too early to tell if this is something of a longer-term variety, but key areas like transports ($TRAN, +1.50%), regional banks (KRE, +1.08%), and homebuilders (XHB, +0.68%) are performing much better today, potentially marking bottoms, as discussed below.

The XHB, in particular, is trying to reverse off price support established back in May:

A beaten-up sector, real estate (XLRE), is also reversing with a slight positive divergence forming:

If the XLRE finishes strongly and closes above 41.18, the reversing piercing candle would actually become a bullish engulfing candle, which I personally look at as a more powerful reversing candle off of a strong downtrend. Given the slight positive divergence, the XLRE could rebound back to 43.00 to challenge its 50-day SMA.

Next week is going to be BIG. First, earnings season kicks off on Tuesday as JP Morgan (JPM) and other large money center banks report results. Then, on Wednesday, the September CPI will be released, followed by the September PPI on Thursday.

Those inflation reports will have a big impact on the treasury market - think 10-year treasury yield ($TNX). Today, the TNX is down 5 basis points to 5.23% and you can see how that has positively impacted areas like regional banks and homebuilders. The inflation reports will be the next highly impactful economic reports for us to watch.

Happy trading!

Tom