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Bond yields climb. Stocks drop.

Treasury yields surged after September’s hotter-than-expected CPI and moved still higher after an auction of 30-year bonds drew weak demand. Yields across the maturity spectrum rose by at least 10 basis points at one stage, and the 30-year bonds rose as much as 18 basis points, on pace for their biggest daily increase since the market turmoil of March 2020.

Stocks fell as Treasury yields rose with bets on another Fed hike back to coinflip territory. Swap contracts pushed the odds of another quarter-point Fed hike to about 50% — from closer to 30% Wednesday. The S&P 500 halted a four-day advance. Bank shares underperformed ahead of earnings from JPMorgan, Citigroup, and Wells Fargo, which are set to kick off the quarterly earnings season Friday. The dollar gained the most in five weeks.

Illustration: James Ferguson | Financial Times

Private equity groups face investor scrutiny over tactics for returning capital

Investors are stepping up scrutiny of private equity firms’ use of debt and complex financial engineering to generate returns from companies they own, demanding disclosure about the costs and risks. (Financial Times | Oct 11)

A hot options trade is muting Wall Street's famous fear gauge

For two decades, Amy Wu Silverman has tracked fear and greed across Wall Street by keeping a close eye on the twists and turns in the Cboe Volatility Index. But last year, she spotted something odd: As stocks plunged in the great inflation crisis, the gauge known as the VIX — which reflects how options traders are betting on swings in the S&P 500 — barely budged. In recent weeks, things have got stranger still. (Bloomberg Markets | Oct 10)

US Fed's top bank cop defends effort to hike bank capital

The US Federal Reserve's top regulatory official defended a sweeping proposal to overhaul bank capital rules before the country's largest bank lobby on Monday, arguing the benefits of a bigger cushion outweigh any additional costs banks might face. Fed Vice Chair for Supervision Michael Barr's said that the complex "Basel Endgame" proposal overhauling how banks gauge the amount of capital they must hold against potential losses should have a "limited" impact on banks' lending costs, with much of the focus on other activities, like trading. (Reuters | Oct 9)

The new kings of Wall Street aren't banks

With interest rates at multiyear highs, hedge funds and private equity are taking over lending. High interest rates, driven by the Federal Reserve’s higher-for-longer policy, are shaking up how corporate loans get done. This shift is accelerating a trend more than a decade in the making. (The Wall Street Journal | Oct 8)

Investors’ use of Fed overnight facility halves from peak

Use of a Federal Reserve facility for storing cash has halved from its peak as money market funds plough their excess funds into US government debt instead. (Financial Times | Oct 7)

Photo illustration: Rachel Mendelson | The Wall Street Journal, iStock

No, you aren't getting a bonus. Your company is just testing you.

Companies are getting creative with phishing tests. Employees are getting annoyed. Simulated phishing emails promise bonuses, gift cards, and yes, once-in-a-lifetime concert tickets. The practice has left some employees chuckling, and others wary about the lines companies might cross to test someone’s cybersecurity competence. 

— The Wall Street Journal

Cyber insurance lessens the sting of an attack: legal insight

The average cost of a data breach has risen to an all-time high of $4.45 million globally and $9.48 million in the US. Cyberattacks are growing in frequency and severity as regulatory requirements, particularly for public companies, continue to increase. Fortunately for executives, a robust insurance program can mitigate the fallout from a cyberattack.

— Bloomberg Law

The next big solar storm could fry the grid

One day, you wake up, and the power is out. You try to get information on your phone, and you have no internet access. Gradually you discover millions of people across the US are in the same situation — one that will bring months or years of rebuilding. A gigantic solar storm has hit Earth. The odds are low that in any given year a storm big enough to cause effects this widespread will happen. But it's a near certainty that some form of this catastrophe will happen someday.

— The Wall Street Journal

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FT montage: Charlie Bibby | Unsplash

‘You’re competing with the commute’: how businesses are rethinking their offices

For many, adapting to hybrid work patterns has been a chance to downsize and cut property costs. But it has also laid the ground for a more fundamental rethink of what the modern workplace should be, from issues such as net zero commitments and technology to location and staff wellbeing.

— Financial Times

The best places to drink if you can’t get into the world’s 50 best bars

Let’s say you can’t get to Licorería Limantour in Mexico City or Double Chicken Please in New York — two of the top 50 bars in the world. Don’t worry. The World’s 50 Best Bars has made a second, less vaunted list with other bars in those cities. Despite its name, the organization also ranks the top 51-100 drinking holes in the world, based on votes from 680 experts in the field.

— Bloomberg Pursuits

The remaking of The Wall Street Journal

Emma Tucker, the new editor-in-chief of The Wall Street Journal, gathered the newsroom last month to share a blunt message: The media industry had morphed “beyond recognition” and The Journal needed to adapt, or be left behind. Now Tucker is moving away from some of the organization’s traditions.

— The New York Times