Daily newsletter · Wed 16 Sep 2026
 | Sharespective Wall Street, before morning tea | Daily newsletter Wed 16 Sep 2026 |
 The Bond Market Wins Plus: a lender walked away from its own bank licence and lost a quarter of its value. |
Good morning, and welcome to Wednesday. The last time the US 10-year Treasury yield sat where it sat on Tuesday, the iPhone was three months old. It reached 5.041% in New York, past the peak it made in 2023 and back to July 2007. Shares took it calmly enough. The S&P 500 lost 0.45% and the NASDAQ Composite 0.78%.
Two companies had a much worse day than the index did. Enova International gave up on its plan to buy a bank and lost nearly a quarter of its value. Dave & Buster's lost money in a quarter it used to make money in, and shed almost a fifth. The Federal Reserve decides tonight, so everyone else gets to sit still and wait.
Market snapshot
S&P 500 7,586.04 ▼ 0.45% | | NASDAQ 25,981.57 ▼ 0.78% | | NZX 50 13,484.22 ▼ 0.56% |
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ASX 200 8,672.00 ▼ 0.90% | | Enova US$173.60 ▼ 23.43% | | Dave & Buster's US$6.85 ▼ 19.13% |
| MARKETS |
The 10-year Treasury yield hit a 19-year high the day before the Fed meets
The US 10-year Treasury yield rose about four basis points on Tuesday to 5.041%, its highest since July 2007. A basis point is a hundredth of a percentage point. That took it above the peak it set in 2023, which had held for three years. Shares drifted lower behind it: the S&P 500 closed at 7,586.04, the NASDAQ Composite at 25,981.57 and the Dow at 52,099.29, down 0.61%.
What sets the long end. The Federal Reserve sets the overnight rate, and that is the only rate it sets directly. A 10-year yield is the market's guess at what inflation and government borrowing will look like over a decade, plus a bit extra for the risk of guessing wrong. That bit extra has been growing, and oil is why. WTI crude rose 4.29% on Tuesday to US$105.74 a barrel with the Saudi East-West pipeline still shut, and dearer crude lifts inflation expectations at every maturity at once.
Mortgages, corporate loans and long-dated company borrowing all price off the 10-year, not off the overnight rate. The bond market has therefore already delivered a good deal of the tightening the Fed is about to vote on. Futures had a quarter-point rise to 3.75–4.00% at about 92.5% by Tuesday's close, which would be the first increase since 2023.
What to watch the dot plot published alongside the decision, which shows where each official thinks rates end the year. In June it pointed to one rise in 2026. Futures are now priced for two. |
| FINTECH |
Enova walked away from its own bank licence and lost a quarter of its value
Enova International lends to people and small businesses that banks turn down, and it has spent the past year trying to become a bank itself. On Monday it withdrew its applications from the Office of the Comptroller of the Currency and the Federal Reserve to buy Grasshopper Bancorp, a small digital lender in New York. Tuesday did the rest. The shares closed at US$173.60, down 23.43% from Monday's US$226.72.
What the charter was for. Banks fund their lending with deposits, which are cheap. Everybody else funds it on wholesale markets, which is not cheap and gets less cheap every time the 10-year goes up. Buying Grasshopper would have moved Enova from the second group to the first. Chief executive Steve Cunningham said the company pulled out because there are no clearly articulated standards for a nonbank seeking a charter, and because the process is open to political and advocacy pressure. The National Community Reinvestment Coalition and the Woodstock Institute had both written to the regulators asking them to reject the deal.
Enova left its full-year guidance where it was, at revenue growth of 20% to 25% and adjusted earnings per share growth of 30% to 35%. The money set aside for Grasshopper now goes into buying back its own shares.
The open question what standard a nonbank is actually being held to. Enova spent a year and a full application finding out, and says it still cannot tell you. |
| CONSUMER |
Dave & Buster's swung to a loss and the shares fell almost a fifth
Dave & Buster's runs about 250 arcade-and-restaurant venues across the United States, and reported its second quarter after Monday's close. Revenue was US$544.1 million, down 2.4% on the same quarter last year, and comparable store sales fell 2.9%. The company lost US$12.5 million, or 36 US cents a share, against a profit of US$11.4 million and 32 cents a year earlier. Analysts surveyed by Zacks had pencilled in a profit of 19 cents on US$561.3 million of revenue. The shares closed at US$6.85, down 19.13%, and they have now halved this year.
Why a small fall in sales hurts this much. Adjusted EBITDA, which is trading profit before interest, tax and depreciation, came in at US$98.9 million against US$129.8 million. Revenue fell 2.4%. That measure fell 24%. The venues explain the gap, because rent, staff and a floor full of machines cost about the same whether the room is packed or half empty, so lost takings come almost straight off the profit line.
One number underneath went the other way. Adjusted free cash flow for the first six months was positive US$19.5 million, against negative US$36.5 million a year ago, largely because the company has stopped opening new venues at the old pace. Darin Harper moved up from finance chief to chief executive on 3 August, when Tarun Lal retired, so the repair job is his now.
The tell whether comparable sales stop falling. They have been going backwards for a while, and every plan the company has announced has been built on turning that one number around. |
Newsworthy numbers
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US$1.0bn the convertible notes Axon Enterprise put on the market on Tuesday, due 15 September 2031 and paying no interest at all. Buyers get the right to swap them for shares instead of a coupon. | | 47.8 the University of Michigan's consumer sentiment index for September, down 7.5% on August. It is the second-lowest reading since the survey started in 1952. |
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155% where New Zealand's national hydro storage sat on 7 September against its historical average, up from 128% a month before. The South Island is on 178% and the North Island on 79%. | | A$8.8m what Gina Rinehart's Hancock Prospecting is paying for 13.5% of White Cliff Minerals, a small explorer drilling for copper in the Canadian Arctic. Shareholders vote on the placement on 19 October. |
Worth a read
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01 | Floating mortgage rates increased 25 basis points after OCR hike — Every main bank passed the Reserve Bank's full quarter-point rise through to floating home loans within days, taking ANZ and ASB to 6.29% and Westpac to 6.39%. Deposit rates moved rather less, and ANZ's Online Call account went up five basis points. |
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02 | One Nation pushes for early super access for Australians paying rent or mortgage — The policy would let renters and mortgage-holders divert a quarter of their compulsory super into their pay for three years, worth about $44 a week to someone on $90,500. The fight is over what that costs at 65. |
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03 | From toilets, textiles, and MSG to AI semiconductor chips — Toto makes lavatories and also the ceramic chucks that hold silicon wafers steady. Ajinomoto invented MSG and now has 95% of the market for the insulating film used in nearly every high-performance chip. |
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04 | A 66.5-million-year-old trackway captures adult T. rex at walking pace — Four prints, each about a metre long, across seven metres of North Dakota mudstone, left a few hundred thousand years before the asteroid. The stride puts the animal at roughly 6km/h, which is a brisk human walk. |
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05 | Archaeologists unearth a unique 11,000-year-old statue of a person riding a leopard — A 70cm figure from Karahan Tepe in southern Turkey, a village put up around 9750 BC. Leopards appear all over that site, and until now they were always the ones on top. |
Wrapping up
The Federal Reserve announces at 2pm Wednesday in Washington, which is 6am Thursday in Auckland and 4am in Sydney. Futures put a quarter-point rise to 3.75–4.00% at about 92.5%, and updated projections and the dot plot land with it. August retail sales come out the same morning at 8.30am New York time, the Bank of England follows on Thursday and the Bank of Japan on Friday.
Lennar reports after Wednesday's close, with consensus at earnings of US$1.30 a share, down 35% on a year ago, on revenue near US$8.37 billion. The line to watch is what it is paying in buyer incentives to shift houses while 30-year mortgage rates sit above 7%. FedEx and Darden both report later in the week. Locally, New Zealand's June-quarter current account is out on Wednesday, GDP on Thursday and August trade figures on Friday. Australia is quiet, with the August labour force report not due until 24 September.
The kiwi slipped again on Tuesday and took USD/NZD to 1.7382, a fresh seven-week low. USD/AUD finished at 1.4038.
Back tomorrow, with the Fed's homework marked.