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| What are this week’s market risks or opportunities? |
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| The bond market has taken over the conversation, but read the move closely before calling it a threat. |
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| The 10-year Treasury touched 4.79% this week, a 19-month high, and a hike at the September 16 meeting is now close to a coin flip. The force underneath is strength. The US economy keeps running hotter than expected, and the repricing of mid-to-long rates, swollen further by heavy Treasury issuance, is largely the market catching up to that reality. |
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| That changes what rising yields mean for the year's most popular trade. Small caps and rates have climbed together all year because both price the same thing, the real economy. |
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| Russell 2000 profits track domestic demand far more than the S&P 500's AI-heavy earnings base, which is why the index is up about 23% in 2026, nine points ahead of the S&P, even as yields ground higher. A growth-led repricing of the curve confirms the rotation rather than threatening it. |
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| What matters from here is which force drives the next leg. If growth keeps leading, the rotation has room to run. If September turns into an inflation and funding-cost story, the math changes fast for the leveraged end of the market, and the froth is real. |
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| Which trades should I consider? |
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| A narrowing rotation favors the names already built for expensive money, businesses with real earnings, little floating-rate debt, and no need to tap the market. That screen is where our ProPicks models have been living all year. |
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| Among the holdings the AI kept through this month's Small-Cap Sprinters rebalance are several of 2026's quietest compounders.
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| Among several other winners. |
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| The strategy holding them has returned roughly three times the Russell 1000's gain over the past year, largely because the model keeps re-testing every position against fundamentals instead of riding the index. |
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| In a hiking cycle, that discipline is the difference between owning the rotation and owning its casualties. |
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| Should I consider this trade? |
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| NVE Corporation (NVEC) is what passing the rate test looks like. |
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| The Minnesota-based chipmaker, held in Small Cap Sprinters since July, runs a business built for exactly this environment. It carries essentially no debt against roughly $22 million in cash, converts nearly 58 cents of every revenue dollar into net income, and pays a $4.00 annual dividend, a yield above 3% funded entirely from operations. |
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| The July quarter showed what that foundation supports. Revenue jumped 81% and net income 79%, driven by new products in robotics and medical devices, and the stock surged 55% in a single session when the numbers landed. It is up about 42% this year and stayed in the portfolio through this month's rebalance. |
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| The case is simple: a company that borrows nothing does not care where the ten-year trades, and one growing 80% while paying a dividend does not depend on multiple expansion to reward shareholders. |
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| At about $100 and 27 times earnings, it is no longer the bargain it was in July. |
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| But in a market about to reprice leverage, self-funding growth is the scarcest asset there is. |
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| Data correct to 02.09.2026 |
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