Markets slip ahead of Election Day

Dow dropped 157, advancers over decliners about 3-1 & NAZ gained 40.  The MLP index was up 2+ to the 281s & the REIT index added 3+ to the 421s.  Junk bond funds wavered & Treasuries were purchased which reduced levels sharply from recent high levels (more below).  Oil added 1+ to go over 70 on extended OPEC+ cuts & gold was steady at 2749.

Dow Jones Industrials

The manufacturing sector continued to shed jobs in Oct, bringing its tally of job losses to 78K over the past 3 months.  The Labor Dept's Bureau of Labor Statistics released its jobs report for Oct, which found that the manufacturing sector lost 46K jobs last month, according to the agency's preliminary analysis.  That followed a loss of 6K jobs in Sep, which is also a preliminary figure, as well as a decline of 26K jobs in Aug.  Manufacturing's job losses in Sep included a decline of 44K in the transportation equipment manufacturing industry due to strike activity.  That can be partially attributed to the ongoing strike by roughly 33K unionized machinists at Boeing (BA), a Dow stock.  The Intl Association of Machinists & Aerospace Workers (IAM) began its strike on Sep 13 & has previously rejected BA''s new contract offers amid the impasse, though the company extended a fresh offer to the union late Thurs that's under consideration.  The BA strike has also rippled thru the aerospace giant's supply chain, causing some of its suppliers to temporarily furlough workers while the labor disruption impacts operations.  The sector's best job creation month in the past 12 months was a gain of 25K jobs in Nov 2023, which was followed by an increase of 12K jobs the following month in Dec.  In 2024, the manufacturing sector's last monthly jobs gain occurred in Jul, when it grew by 6K jobs.  Its largest monthly gain this year was in Apr when 7K jobs were added.  The National Association of Manufacturers (NAM) has called for the next administration & Congress to restore tax incentives for capital investments in expanding or upgrading facilities & equipment, as well as easing regulations that can be costly to implement.

Manufacturing sector sheds 78K jobs in last three months

Treasury yields were lower as investors braced for a busy week which will see voters head to the polls for the presidential election & the Federal Reserve's next interest rate decision.  The yield on 10-year Treasury was last down by 9 basis points, hovering around 4.272% & the yield on the 2-year Treasury was last down by more than 6 basis points to 4.137%.  1 basis point equals 0.01% & yields & prices move in opposite directions.  Investors are gearing up for the highly anticipated presidential election tomorrow & will also be paying close attention to which party will take control of Congress.  Depending on whether the  House of Representatives & Senate are split, or if they are controlled by the same party coupled with a White House victory, there could be varying implications for the economy & markets.  Investors are also focused on the Fed's interest rate decision at the central bank's policy meeting.  The decision will be followed by comments from Fed Chair Jerome Powell, which could provide hints about the Fed's expectations for the economy & interest rates for the coming months.  On the economic front, factory orders for Sep fell 0.5%, the Census Bureau said, matching expectations

Treasury yields fall as investors brace for U.S. presidential election

Ford (F) reported a 15.2% increase in US new vehicles sales last month compared with subdued levels due to a union strike in Oct 2023.  The year-over-year sales increase was led by a 29.2% improvement in sales of its trucks, which were among the first vehicles impacted by the United Auto Workers' strike during contentious contract negotiations last year.  Ford said its total US market share increased 0.6 percentage points to 12.6% in Oct.  The automaker's sales gain outpaced the industry’s estimated increase of 10% last month compared with a year earlier.  Sales of hybrid vehicles, which Ford has been emphasizing amid a slower-than-expected adoption of electric vehicles, were up 38.5% last month compared to Oct 2023.  Its EV sales were down by 8.3%, while sales of traditional vehicles with internal combustion engines were up 14.1%.  EV sales remain up 38.2% for the year thru Oct compared with the same timeframe in 2023.  The Oct sales decline for EVs comes days after the company confirmed plans to idle production of its all-electric F-150 Lightning from Nov 18 until Jan 6, including previously planned holiday downtime at the end of the year.  US sales thru Oct were up 3.8% to more than 1.7M vehicles sold.  The stock rose 23¢.

Ford’s October sales up 15.2% from subdued levels due to labor strike in 2023

Stocks were little changed, gearing up for a week of potentially huge market-moving events, the presidential election & the Federal Reserve policy decision.  A solid earnings season & interest rate-cut optimism are giving the market reasons to be cheerful ahead of tomorrow's election, a big risk event for markets.  The new president will set the course for the economy in the years that follow.