Markets climb after stronger-than-expected Oct services sector data

Dow jumped 315, advancers over decliners about 3-1 & NAZ gained 198.  The MLP index added 3+ to the 283s & the REIT index rose 1 to the 422s.  Junk bond funds were mixed & Treasuries had selling which raised yields (more below).  Oil was up about 1 to the 72s & gold added 5 to 2752.

Dow Jones Industrials

The Intl Association of Machinists & Aerospace Workers Local 751, which represents 33K members in Seattle, said it has accepted a new contract with Boeing (BA), a Dow stock, ending the union's strike after nearly 2 months.  The union said machinists voted by 59% to accept the company's proposal, which includes a 38% pay raise over 4 years that would ultimately increase salaries from $76K to $119K.  The proposal also included ratification & productivity bonuses.  BA did not agree to the reinstatement of a company pension plan, which was highly sought after by union members, but did offer company matching contributions for workers' 401(k) plans.  IAM 751 posted last night that workers can return to work as early as Wed & must return by the beginning of shift on Nov 12.  CEO Kelly Ortberg, who joined the company in Aug, said he is "pleased to reach a ratified agreement" with the machinists.  "While the past few months have been difficult for all of us, we are all part of the same team. We will only move forward by listening and working together. There is much work ahead to return to the excellence that made Boeing an iconic company," Ortberg said.  "This is an important time in our history, and like generations before us, we will face into the moment together, and stronger as one team."  BA was losing more than $1B per month in revenue due to the strike, according to an estimate that was released before Ortberg announced the company would cut 17K jobs (10%) of its global workforce.  BA stock fell 1.22.

Boeing strike ends after labor union accepts contract offer, announces return to work

Treasury yields were modestly higher as investors readied themselves for the presidential election.  The 10-year Treasury yield was up by more than 4 basis points at 4.355% & the yield on the 2-year Treasury was also up more than 5 basis points at 4.232%.  1 basis point is equivalent to 0.01% & yields & prices have an inverted relationship.  Yields ticked higher during the day after the Institute for Supply Management's Oct reading for services came in stronger than expecting.  The services purchasing managers' index came in at 56.0, the highest reading since Jul 2022.  The forecast was expecting a reading of 53.7.  Factory orders fell to 0.5% in Sep, the Census Bureau said.  This met expectations.

Treasury yields rise slightly as traders monitor U.S. election

Restaurant Brands Intl (QSR) reported quarterly earnings & revenue that missed expectations as domestic same-store sales growth for all 4 of its chains fell short of estimates.  EPS was 93¢ adjusted vs 95¢ expected & revenue was $2.29B vs $2.31B expected.  Worldwide same-store sales grew just 0.3% in the qtr.  Burger King, Firehouse Subs & Popeyes all reported same-store sales declines in their home markets.  But so far in the 4th qtr, same-store sales trends have improved.  “October now is, for the whole business, positive, low-single digits of same-store sales, which is an improvement from what we saw in [the third quarter],” CEO Josh Kobza said.  He credited more successful marketing promotions & better consumer sentiment in the US for the improvement in sales.  “If you look at some of the things that really drive finances for our guests, everything from gas prices are down, interest rates are starting to go down, inflation has really started to moderate a fair bit,” Kobza added.  Burger King's same-store sales fell 0.7% during the 3-month period that ended Sep 30.  The forecast had expected the metric to be flat.  The chain is in the middle of a turnaround in the US, but consumers are also spending less at restaurants, reigniting the value wars between Burger King & its rivals.  QSR trimmed its outlook for full-year system-wide sales growth to 5.0-5.5%, down from its prior range of 5.50% to 6.00%.  QST stock dropped 1.63.

Burger King parent Restaurant Brands falls short of Q3 revenue expectations

Stocks traded firmly in the green as Election Day got underway, with investors settling in to see whether Kamala Harris or Donald Trump will shape the economy as the next pres.  Investors are buckling in for market volatility, as the outcome may not become clear for days, or even weeks, if the result is disputed.  Given the huge difference in the candidates' stances on the economy, a long wait for a declared winner could inject more uncertainty for markets.